Covid-19 opportunity still plays for Novavax, says top analyst

Delays in the registration of the Covid-19 vaccine NVX-CoV2373 (NUVAXOVID) have resulted in Novavax (NVAX) has not yet been able to make its offer known to the public. You would think that with other leading players firmly planted in the consciousness of public health and healthcare policymakers, the opportunity might already be over for last year’s outstanding performer.

However, later studies have shown that the vaccine’s data is just as good as the leading approved vaccines. With the EUA filing slated for the third quarter, the vaccine the subject of a rolling review from the EMA and being reviewed by other regulators – notably in the UK and India – the catalysts are piling up.

B.Riley’s Mayank Mamtani has long been banging the drum for Novavax’s potential vaccine, highlighting in its latest approval the recent talk about the “safety and durability of protection” of EUA-approved vaccines.

On the latter, while data showing the “declining” effectiveness of the approved vaccines – whether since the first primary injections or from the emerging variants – remains “limited”, the analyst believes the talk of the “need for boosters” also likely to include the impact on “high-risk population segments,” including the immunocompromised population, the elderly population, and frontline workers.

“Specifically,” notes Mamtani, “there is also a need to reconcile mixed evidence on immune response kinetics between the 6-12 month follow-up data from mRNA vaccines with the 8-month follow-up data from JNJ collected at 15 -7 have been published.”

On the former, Mamtani says the CDC and FDA remain “very diligent” around the safety profile of the approved vaccines in real-world cases. This is evidenced by the label updates with relevant warnings for the JNJ vaccine regarding the risk of Guillain-Barré syndrome (GBS) and young adolescents at risk of heart inflammation from the PFE/MRNA mRNA vaccines.

Mamtani therefore believes that Novavax’s vaccine is well positioned to benefit when it finally hits the market.

As such, the 5-star analyst said: “We believe the potential imminent resolution of NVAX’s challenges around global regulatory filings and manufacturing scale-up activities, which also explains continued volatility, presents an undervalued multi-year, global opportunity set on garnering significant market share in the unvaccinated (short-term) and vaccinated populations worldwide, with the latter particularly benefiting from datasets generated in the COM-COV2 ‘booster’ study and the recently initiated Ph. I/II study for the C-19/influenza combination vaccine product (NCT04961541).”

Overall, Mamtani reiterated a buy recommendation for NVAX stock, backed by a $286 price target. The implications for investors? Top of 53%. (To view Mamtani’s track record, click here)

Now aligning with the rest of the street, where the average price target is a more modest $249.60, yet suggesting a rise of about 19% year on year. Overall, the stock has an average buying consensus rating, based on 4 buys versus 2 held. (View NVAX stock analysis on TipRanks)

For great ideas for stock trading at attractive valuations, visit TipRanks’ Best stocks to buy, a newly launched tool that unites all of TipRanks’ stock insights.

Disclaimer: The opinions expressed in this article are those of the featured analyst only. The content is for informational purposes only. It is very important to do your own analysis before making any investment.