B.Riley has maintained a Buy rating on Novavax (NASDAQ: NASDAQ:NVAX) and increased the price target to $26.00, up from the previous $23.00.
The firm anticipates a significant shift in Novavax's business model, transitioning from an R&D-centric approach to one that potentially includes more value-creating partnerships. This outlook comes ahead of the company's third-quarter earnings report expected in early November.
The analyst highlighted the initiation of a Phase III trial for Novavax's combined COVID-influenza vaccine candidate as a key catalyst for the company. The trial, which began this month, is progressing rapidly with enrollment of 4,000 subjects aged 50 and older in the Southern Hemisphere. The data from this trial could lead to a registration-enabling readout by mid-2025, including up to six months of safety, tolerability, and immunogenicity endpoints.
Novavax's research into adjuvanted vaccine products for the elderly population is seen as a promising area, especially given the success of similar products from competitors. The company's Phase II data already showed non-inferiority to high-dose vaccines from Sanofi (NASDAQ:SNY) and CSL (OTC:CSLLY), making a strong case for the potential of Novavax's candidates. This comparison is particularly relevant as the company aims to demonstrate the competitiveness of its high-efficacy adjuvanted respiratory vaccines against mRNA-based alternatives.
The firm also noted Novavax's efforts to gain market share in the U.S. commercial COVID market as an immediate priority. Early indications of market share gains, attributed to the timely availability of Novavax's updated single-dose, pre-filled vaccine presentations, are seen as encouraging signs for the company's strategy.
In other recent news, Novavax's updated Nuvaxovid COVID-19 vaccine has received Marketing Authorization from the European Commission for individuals aged 12 and older. The vaccine is designed to target the JN.1 variant and its lineages and is also authorized for emergency use in the United States. Furthermore, Jefferies has maintained a Buy rating on Novavax, highlighting the company's strong COVID-19 vaccine sales outlook and potential for growth.
Novavax has appointed Ruxandra Draghia-Akli, MD, PhD, as its new Executive Vice President and Head of Research & Development. The company also reported Q2 2024 revenue of $415 million, largely due to a significant partnership with Sanofi, and anticipates a total revenue of between $700 million and $800 million for the full year 2024.
These are recent developments for Novavax. The company is exploring cost reduction strategies, including renegotiating or exiting Advance Purchase Agreements for vaccine distribution and considering the sale of its Czech Republic manufacturing facility. Novavax's updated COVID-19 vaccine is now available at pharmacies nationwide, providing a protein-based immunization option for individuals aged 12 and older.
InvestingPro Insights
Recent InvestingPro data provides additional context to B.Riley's optimistic outlook on Novavax. Despite a significant 38.17% revenue decline in the last twelve months, Novavax's stock has shown remarkable resilience, with a 197.65% price return over the past six months. This aligns with B.Riley's view of a potential business model shift and the company's efforts to gain market share in the U.S. commercial COVID market.
InvestingPro Tips highlight that Novavax holds more cash than debt on its balance sheet, which could provide financial flexibility as it transitions its business model and invests in new vaccine developments. However, it's worth noting that analysts anticipate a sales decline in the current year, and the company is not expected to be profitable this year.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Novavax, providing a deeper understanding of the company's financial health and market position.
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