Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 6 Jan, 25 | NVAX | Buy | USD 8.85 | USD 9.65 | USD 10.35 | Same day | 16.9% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Novavax, Inc., a biotechnology company, that promotes improved health by discovering, developing, and commercializing vaccines to protect against serious infectious diseases. It offers vaccine platform that combines a recombinant protein approach, nanoparticle technology, and its patented Matrix-M adjuvant to enhance the immune response. It focuses on urgent health challenges, which is evaluating vaccines for COVID-19, influenza, and COVID-19 influenza combination. The company is commercializing a COVID-19 vaccine, NVX-CoV2373 under the brand names of Nuvaxovid, Covovax, and Novavax COVID-19 Vaccine, adjuvanted for adult and adolescent populations as a primary series and for both homologous and heterologous booster indications. It is also developing R21/Matrix-M adjuvant malaria vaccine. Novavax, Inc. was incorporated in 1987 and is headquartered in Gaithersburg, Maryland.
Cost Reductions: The company achieved a 26% reduction in combined R&D and SG&A expenses in Q3 2024 compared to Q3 2023. This underscores Novavax’s progress in improving operational efficiency and aligning its cost structure with future financial targets.
Cash Reserves Growth: Novavax ended Q3 2024 with $924 million in cash, cash equivalents, and receivables, a significant increase from $584 million as of December 31, 2023. This represents a growth of approximately 58% in liquidity, highlighting improved financial stabili
Decline in Revenue: Total revenue for Q3 2024 was $85 million, a 55% decrease compared to $187 million in Q3 2023. This reflects challenges in maintaining prior levels of revenue, primarily in product sales.
Reduced Product Sales Forecast: Novavax updated its 2024 product sales guidance to $175-$225 million, down from the prior estimate of $275-$375 million. This marks a potential 36% decline in the upper range of expected sales, indicating slower-than-anticipated market performance
Key investment risks for Novavax include reliance on regulatory approvals for its vaccines, particularly the FDA's review of its COVID-19 vaccine, and potential challenges in meeting product sales targets amid shifting market dynamics and competition.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 8.85 | 7.7 | 9.65 | 10.35 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Operational Highlights and Strategic Direction
Novavax, Inc. (Nasdaq: NVAX), a global leader in protein-based vaccines utilizing its Matrix-M™ adjuvant, reported financial and operational results for the third quarter of 2024, ending September 30, 2024. John C. Jacobs, President and CEO, emphasized the company’s focus on driving value through business development, disciplined research, and innovation beyond COVID-19 and influenza, leveraging its proven technology platform for broader public health impact.
Key Priorities: Advancing Partnerships
The company highlighted significant progress with its partnership with Sanofi. Preparations are underway for Sanofi to assume commercial responsibility for the Nuvaxovid™ COVID-19 vaccine in major markets during the 2025-2026 season. Additionally, the Novavax pediatric clinical trial database lock, expected in Q4 2024, is anticipated to trigger a $50 million milestone payment.
Driving Innovation Through R&D and Strategic Collaborations
In November 2024, the U.S. FDA lifted the clinical hold on Novavax's Investigational New Drug (IND) application for its COVID-19-Influenza Combination (CIC) and stand-alone influenza vaccine candidates. Phase 3 immunogenicity clinical trials for these candidates are now being planned. Novavax also signed an agreement to enable the exploration of its Matrix-M™ adjuvant with a leading pharmaceutical company’s pipeline candidates. The company continued advancing its pandemic influenza and respiratory syncytial virus (RSV) pre-clinical programs while appointing Dr. Ruxandra Draghia-Akli as EVP and Head of R&D.
Operational Efficiency and Cost Reductions
Novavax achieved a 26% reduction in combined R&D and SG&A expenses in Q3 2024 compared to the same quarter in 2023. The company remains on track to target full-year R&D and SG&A expenses of $500 million for 2025 and $350 million for 2026, representing an 80% reduction from 2022 levels. A portion of these expenses is expected to be reimbursed under the Sanofi Agreement.
Updated COVID-19 Vaccine Approvals and Market Presence
For the 2024-2025 vaccination season, Novavax received Emergency Use Authorization (EUA) from the U.S. FDA for individuals aged 12 and older. The updated Nuvaxovid™ vaccine, available in pre-filled syringes, is distributed across over 30,000 locations in the U.S. The company also secured global authorizations, including in the European Union, Canada, and Taiwan. A Biologics License Application (BLA) with an action date in April 2025 could trigger a $175 million milestone payment from Sanofi upon approval.
Third Quarter Financial Performance
Novavax reported total revenue of $85 million in Q3 2024, compared to $187 million in Q3 2023. Product sales contributed $38 million, primarily from U.S. market sales, while $46 million came from licensing, royalties, and other revenue, including the Sanofi Agreement and adjuvant sales. Cost of sales decreased to $61 million, reflecting a reduction in inventory-related expenses.
Expense Management and Net Loss
R&D expenses for Q3 2024 were $87 million, down from $106 million in the same period in 2023, primarily due to reduced manufacturing and clinical research costs. SG&A expenses also decreased from $107 million in Q3 2023 to $71 million in Q3 2024, reflecting cost-cutting measures offset by commercialization expenses. The net loss for the quarter stood at $121 million, an improvement from the $131 million loss reported in Q3 2023.
Updated Financial Guidance for 2024
Novavax revised its full-year 2024 financial guidance. The company now expects total revenue of $650-$700 million (down from $700-$800 million) and product sales of $175-$225 million (revised from $275-$375 million). Licensing, royalties, and other revenue are projected at $475 million, up from $425 million. Combined R&D and SG&A expenses remain targeted at $700-$750 million for the year.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on the Novavax, Inc. (NASDAQ: NVAX) at the closing price of USD 8.85, as on January 03, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Healthcare Industry: Biotechnology
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| NVAX Novavax Inc |
-0.295 4.60% | 6.12 | - | 7.92 | 1.59 | 49.52 | 0.79 | -0.534 |
| NVO Novo Nordisk A/S |
-0.8143 1.17% | 68.63 | 41.58 | 31.15 | 2.13 | 32.99 | 2.11 | 4.70 |
| NONOF Novo Nordisk A/S |
0.0025 0.0036% | 68.96 | 41.06 | 31.25 | 2.08 | 33.11 | 2.11 | 4.70 |
| VRTX Vertex Pharmaceuticals Inc |
0.03 0.0062% | 484.85 | 29.67 | 24.33 | 10.38 | 5.83 | 9.33 | 20.00 |
| REGN Regeneron Pharmaceuticals Inc |
-7.26 1.14% | 626.97 | 29.07 | 20.12 | 7.57 | 3.82 | 6.95 | 19.42 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 03, 2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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