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On Thursday, BofA Securities analyst Alec Stranahan adjusted the price target for Novavax (NASDAQ:NVAX) stock, reducing it to $10.00 from the previous $12.00, while maintaining a Neutral rating. The revision follows a significant drop in Novavax shares, which fell by 21.5%, outpacing the 5.6% decline seen in the Nasdaq Biotechnology Index (NBI). According to InvestingPro data, Novavax stock has shown significant volatility, with a beta of 3.14, though it has managed a 58.45% return over the past year despite recent turbulence. This downturn came after comments made by the Secretary of the Department of Health and Human Services, Robert Kennedy Jr., which cast doubt on the company's COVID-19 vaccine, Nuvaxovid, amid delays in the Biologics License Application (BLA) approval process. InvestingPro analysis indicates the company's overall financial health score is "FAIR" at 2.5/5, with revenue of $682.16 million in the last twelve months, though analysts anticipate sales decline in the current year.
Stranahan noted that the most immediate risk for Novavax stems from the potential loss of a $175 million milestone payment from Sanofi (NASDAQ:SNY), which is contingent on the BLA approval. The analyst has chosen to remove this expected payment from the financial model, a payment which had been anticipated within the second quarter of 2025. Additionally, the absence of a formal BLA is perceived to introduce regulatory risks for the company's COVID-19/influenza combination programs, which incorporate components from Nuvaxovid. This includes both Novavax's internal Combination Influenza-COVID (CIC) program and Sanofi's CIC program, the latter of which could result in up to $350 million in development and launch milestones for Novavax.
The report from BofA Securities highlighted that while the data package for Nuvaxovid is considered mature, given the millions of individuals who have already received the vaccine, the firm is looking for further clarity on how the recent developments will impact the vaccine's approval process ahead of the 2025/2026 season. Despite the challenges faced, Stranahan reiterated a Neutral stance on Novavax shares but underscored the necessity to adjust the price objective in light of the updated CIC model and the current uncertainties surrounding the BLA approval timeline. InvestingPro data shows analyst targets ranging from $9 to $25, with the stock currently appearing undervalued based on InvestingPro's Fair Value model. Investors seeking deeper insights can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, which includes detailed analysis of Novavax's financial health, market position, and growth prospects.
In other recent news, Novavax Inc. is awaiting a decision from the U.S. Food and Drug Administration (FDA) regarding the approval of its COVID-19 vaccine. The company's Biologics License Application had an action deadline set for April 1, 2025, but the FDA has postponed its decision, requiring additional data before proceeding. This delay comes amid a broader shakeup at the FDA, with the recent ousting of its top vaccine official, Peter Marks, which has caused volatility in the biotech sector. Furthermore, Health and Human Services Secretary Robert F. Kennedy Jr. indicated a shift in government focus towards vaccines utilizing multiple antigens, potentially impacting Novavax's single antigen approach.
Additionally, a report from the New York Times (NYSE:NYT) revealed that the U.S. plans to cut financial support for Gavi, the Vaccine Alliance, which has implications for vaccine manufacturers like Novavax. This funding cut is expected to reduce efforts to combat global health threats in developing countries, possibly affecting future vaccine demand. Amid these developments, shares of Novavax experienced a decline, reflecting investor concerns over the shifting regulatory and funding landscape. The market reaction to these changes underscores the uncertainty facing Novavax and other companies in the vaccine industry.
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