NVAX with Nobias technology: Can Novavax Become the Third COVID-19 Vaccine Maker to Soar This Year?
The COVID-19 pandemic has proven to be very profitable for the companies who’ve managed to develop, produce, and manufacture effective vaccines. The healthcare sector has experienced a significant sell-off in recent weeks as Congress continues to discuss healthcare regulation which would involve lowering the prices of prescription drugs. However, even after this recent weakness, we see that during the past year, Pfizer (PFE) shares are up 19.2% and Moderna (MRNA), which is essentially a pure play COVID-19 vaccine stock at this point in time, is up 533.45%.
In a recent article, Adria Cimino, a Nobias 5-star rated analyst, noted that, “Early in the coronavirus vaccine race, Novavax (NVAX) seemed to have secured the third spot behind rivals Moderna (MRNA) and Pfizer (PFE).” She said that Novavax was expected to submit an authorization request for its COVID-19 vaccine in early 2021, but the company “fell behind as materials shortages hurt its manufacturing ramp up. Now, the company expects to file for authorization in the fourth quarter.”
This delay has allowed Pfizer and Moderna to capture massive market share and generate billions of dollars via vaccine sales; however, Novavax appears to have a special card up its sleeve with a new combo-COVID-19/Flu vaccine.
In her report, which was published on September 11th, 2021, Cimino wrote, “This week, Novavax said it began a phase 1/2 clinical trial of a combination flu/coronavirus vaccine candidate. The company is testing the potential product in 640 adults ages 50 through 70.” She continued, saying, “The investigational vaccine will be given in two doses, 56 days apart. Researchers will study safety and immune response. Novavax expects to generate results in the first half of next year.”
Cimino highlighted the fact that both Moderna and Pfizer have mentioned plans to work on combination vaccines as well. The prevailing thought is that the consumer would prefer as few needle pokes as possible, likely meaning strong demand for seasonal vaccines like this, should they be approved. Cimino said, “In a Pfizer earnings call back in May, CEO Albert Bourla said the company is looking into opportunities to combine its coronavirus vaccine with other vaccines. But he didn't offer further details.”
Moderna appears to be further along in this process with Cimino noting that in July, MRNA began early phase trials for a Flu vaccine. “Then, just this week, Moderna announced it's working on a single-dose vaccine combining a COVID-19 booster and a flu booster. That program hasn't yet entered clinical trials,” she continued.
So, while PFE and MRNA won the race to COVID-19 vaccine approval, Cimino believes that Novavax is in a good position to win the combo-vaccine race. She said, “In the race to develop a combined vaccine, Novavax is ahead. But it's not only because the company is the first to launch a clinical trial; it's because the two key products that make up this combined vaccine candidate already have been through extensive testing. Novavax's candidate involves a combination of its coronavirus vaccine and flu vaccine candidates.” She points out that in its phase 3 trials which were performed in Mexico, Novavax’s COVID-19 vaccine “showed efficacy of more than 90% against mild, moderate, and severe disease” and “it "demonstrated" 100% efficacy against moderate and severe disease.”
With regard to NVAX’s Flu vaccine, Cimino wrote, “NanoFlu -- the flu candidate -- met all primary endpoints in a phase 3 clinical trial in the spring of 2020. This means it produced an immune response that wasn't inferior to an already approved flu vaccine. It also beat secondary goals by producing higher immune responses to various flu strains than the approved vaccine. Novavax tested the candidate in adults ages 65 and older.”
Cimino highlights guidance from PFE and MNRA showing that those two companies expect to generate sales of $33 billion and $20 billion, respectively, from COVID-19 vaccines in 2021. It’s unclear as to whether or not this disease will require long-term booster shots, but if it does, that represents a very large opportunity for bio-pharma companies.
Cimino remains bullish on NVAX shares because of the potential of a COVID-19/Flu combo, saying, “This year, Novavax hasn't kept up with either of the big vaccine makers. But Novavax may have a second chance to stand out and lead the way in the long term. This potential product -- the combined vaccine -- could be a game changer.” And, she isn’t the only Nobias 5-star rated analyst who has recently published a bullish report on NVAX shares.
Taylor Carmichael, another 5-star rated author, recently helped to publish a NVAX report at The Motley Fool, which highlighted this company as one of “3 COVID Stocks That Might Double Soon”. Highlighting NVAX’s potential upside, he wrote, “Right now, Moderna enjoys a $169 billion market cap, and BioNTech sports a $79 billion valuation. Meanwhile, Novavax is positively cheap with its $17 billion market cap.”
Carmichael continued saying, “The difference, of course, is that the mRNA biotechs have both of their COVID-19 vaccines on the market now, while Novavax is still waiting for its first Emergency Use Authorization. But when the government agencies start allowing Novavax to distribute its COVID-19 vaccine, the stock will really start to soar.”
Carmichael believes that strong demand for COVID-19 vaccines will persist for the foreseeable future because, “The majority of the world's population still has not been vaccinated.” He says that NVAX will help to meet this unmet medical need, saying, “Novavax will have 2 billion doses of vaccine ready to distribute in 2022. And the biotech has multiple agreements for supplying locations around the world: 100 million doses for the U.S., 150 million doses for Japan, 200 million doses for Europe, and over 1 billion doses for the developing world.”
Mrinalika Roy, a Nobias 4-star rated analyst, co-published a piece on Yahoo Finance recently, which focused on NVAX’s vaccine production capabilities moving forward. She wrote, “Novavax, speaking at a Morgan Stanley healthcare conference, reiterated that it would have about 100 million doses per month by the end of the third quarter this year, and would increase it to 150 million doses in the fourth quarter.”
Nicholas Ward is a Senior Investment Analyst at Wide Moat Research. He has spent the last 8 years writing about the stock market at various publications, including Seeking Alpha, The Street, Forbes Real Estate Investor, Sure Dividend, The Dividend Kings, iREIT, Safe High Yield, and The Intelligent Dividend Investor.
Carmichael points out that the U.S. government recently paid $1.3 billion for 100 million doses of the company’s experimental vaccine. He thinks that similar deals between the governments of Japan and those in Europe “will likely pay a higher dollar amount” and therefore, “It's entirely possible that Novavax's revenue next year will be higher than its market cap today.”
Carmichael highlighted the combo-COVID-19/Flu trial that NVAX recently began in Australia, pointing towards the same upside potential that Cimino based her bullish thesis on. And ultimately, he ended his piece with a bullish conclusion stating, “I'm expecting Novavax shares to spike higher as its vaccine starts receiving authorization around the world in the fourth quarter. Novavax's vaccine candidate will be popular both as a booster shot and as an initial vaccine for the majority of the world who are unvaccinated.”
Overall, the credible analyst community that the Nobias algorithm tracks agrees with this bullish outlook. Right now, 75% of the credible authors that we follow have expressed “Bullish” opinions on NVAX shares. The average price target amongst the credible Wall Street analysts that our algorithm tracks is currently $345.50. Today, NVAX trades for $257.3, meaning that the average price target amongst the highly rated analysts that we track represents upside potential of approximately 45%.
Disclosure: Nicholas Ward is long PFE. Nicholas Ward wrote this article for Nobias at their request with a view of giving investors a balanced perspective based on the writings of Nobias highly rated analysts and bloggers. Nobias has no business relationship with any company whose stock is mentioned in this article and does not have a position in this stock.
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