It has been an ideal yr for Novavax (NASDAQ: NVAX). The biotech is up by 150% since January. Nevertheless, analysts see much more upside for the vaccine maker. The consensus estimate of $20 a share implies a 65% increase over its current stock price, not too shabby for an organization that, not too way back, appeared to be not too removed from bankruptcy. Can Novavax maintain its momentum? Let’s discover if the biotech can hit the road’s price goal inside the subsequent 12 months.
Multiple catalysts on the horizon
Novavax recently signed a partnership with Sanofi that granted the latter the fitting to market Nuvaxovid, Novavax’s coronavirus vaccine, in most countries worldwide starting in 2025. Until then, it’s business as usual for the mid-cap biotech. Novavax recently filed applications with regulatory authorities within the U.S. and Europe for an updated COVID-19 vaccine for the upcoming 2024-2025 season.
Though this market is not nearly as large because it was two years ago — and it continues to be dominated by Moderna and Pfizer — Novavax will still generate some sales from it, provided its updated candidate earns approval. Elsewhere, Novavax is advancing recent vaccines through the pipeline. It plans to begin phase 3 studies for a mix coronavirus/flu vaccine and a stand-alone flu vaccine within the fourth quarter. Novavax expects data from these studies in mid-2025, lower than a yr from now.
How could these potential catalysts affect Novavax’s shares? The corporate earning approval for its updated COVID-19 flu candidate shouldn’t jolt the stock price much. Novavax is on the brink of cede that business to Sanofi. Though Novavax will still generate royalties from the sale of Nuvaxovid, the market has already factored in much of the effect of the agreement the 2 entities signed. That is why Novavax’s shares have greater than doubled this yr.
Nevertheless, in the event that they are successful, Novavax’s upcoming phase 3 studies could send its stock price soaring. The biotech currently has no other product available in the market. These two might be massively successful and permit it to generate growing revenue in the event that they earn approval, likely in 2026 on the earliest. So, inside a yr, Novavax might be recording royalties from the sale of Nuvaxovid from Sanofi while preparing to send applications to regulatory authorities for 2 potentially lucrative recent vaccines.
If things go in addition to the corporate hopes, its shares will almost actually climb past $20 apiece.
The long-term view
In fact, there are significant risks related to Novavax. It’s not the primary biotech to attempt to develop a greater influenza vaccine, and even a mix flu/COVID-19 vaccine. Competition raises the bar for fulfillment within the biotech industry, as in lots of others. Novavax must do greater than produce positive ends in its upcoming phase 3 trials. It also has to show efficacy for its candidates that’s at the very least somewhat near that of other products which might be further along.
That is not an issue for an organization with loads of products available on the market that generate regular revenue and earnings. But that does not describe Novavax. Moderna’s combination vaccine recently kicked it out of the park in a late-stage study. Pfizer and BioNTech were also on this tail, but their candidate didn’t hit one in every of its two primary endpoints in a late-stage study.
These firms’ shares didn’t drop off a cliff following these mixed phase 3 results, but they’ve much larger lineups and pipelines than Novavax. If Novavax’s vaccine suffers the identical fate, it might be bad news for its stock. By August next yr, more influenza vaccines, including one by Pfizer and one other by Moderna, could produce phase 3 results. In other words, Novavax looks like a dangerous company to take a position in.
It could produce a performance that enables it to match the road’s estimates inside the subsequent 12 months.
Nevertheless it could also lose much of its value by this time next yr. There are way more attractive biotech stocks to take a position in.
Must you invest $1,000 in Novavax right away?
Before you purchase stock in Novavax, consider this:
The Motley Idiot Stock Advisor analyst team just identified what they consider are the 10 best stocks for investors to purchase now… and Novavax wasn’t one in every of them. The ten stocks that made the cut could produce monster returns in the approaching years.
Consider when Nvidia made this list on April 15, 2005… if you happen to invested $1,000 on the time of our advice, you’d have $792,725!*
Stock Advisor provides investors with an easy-to-follow blueprint for fulfillment, including guidance on constructing a portfolio, regular updates from analysts, and two recent stock picks every month. The Stock Advisor service has greater than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of August 22, 2024
Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Idiot has positions in and recommends Pfizer. The Motley Idiot recommends BioNTech Se and Moderna. The Motley Idiot has a disclosure policy.
Wall Street Predicts That This Stock Could Skyrocket by 65%: Time to Buy? was originally published by The Motley Idiot