Novavax (NASDAQ:NVAX) stock has had something of a tough go recently.
A recent story about Novavax trial participants in the U.S. getting frustrated by the company’s ongoing delays to submit its vaccine to the Food and Drug Administration (FDA) must have been a punch to the gut for owners of NVAX stock.
It seems as though Novavax’s vaccine is destined to sit on the shelf until at least 2022.
If you own the stock, it’s best to take the saying, “A watched pot never boils,” to heart. You’re in a waiting game. Pure and simple.
In the intro, the article I linked to talked about Novavax trial participants being unable to travel or do much of anything until the vaccine gets emergency use authorization (EUA) from the FDA. Until then, they’re considered unvaccinated.
“‘Do I leave the trial and go get another vaccine, so I’m not stranded in the middle?’ Carrero, a Novavax Trial Participant, said.
“Carrero says he has a CDC vaccine card that says ‘Trial Participant’ but, he’s still considered unvaccinated when he tries to leave the country or participate in activities that require an FDA-approved vaccine.”
Carrero says Novavax’s vaccine is not recognized in Europe, so even if the FDA gives it an EUA, he likely wouldn’t be able to travel to that continent.
Dr. Matthew Hong of Wake Research is quoted in the article. He was speaking about the reality of trial participants dropping out because the company wasn’t indicating how long it would take before they were considered fully vaccinated.
“‘A few more than we’ve seen with the other trials but, usually, that’s what you find. People are just dropping out,’ Dr. Hong said.”
While the doctor recommends people don’t mix vaccines, here in Canada, where I live, the Canadian government hasn’t had a problem with people mixing one with another. So I got AstraZeneca first and Moderna second. That second one knocked me out for a day, but it was worth it.
The doctor finished by saying we won’t hear anything from the company until October at the earliest.
So, if you’re cruising online news sites hoping to get good news about Novavax getting the EUA green light anytime soon, you might want to remember the saying because nothing you do will change the current circumstances.
Who’s Buying?
InvestorPlace’s Joseph Nograles recently reminded investors that beyond the European Union’s contract to buy 200,000 doses of Novavax’s vaccine, Denmark announced in August that it would buy 280,000 doses at $20.90 a dose, good for approximately $6 million.
Applying the same math to the much bigger EU contract, we’re talking about $4.2 billion. If we value those sales at the same 26x multiple as Moderna (NASDAQ:MRNA), that’s a future market capitalization of $109 billion, 6x its current valuation. Or, conversely, it is currently trading at 4.1x forward sales and an insanely cheap valuation.
Cha-ching!
With lots of variants expected to come down the pipe in the months and years ahead, it’s hard not to get ahead of oneself.
Repeat after me, “A watched pot never boils.”
The Bottom Line on NVAX Stock
In my last article in mid-August, I said it’s a great long-term bet if you can buy NVAX stock for around $200. At the time, four out of six analysts rated it a “Buy.”
Today, seven cover it with the same four “Buys” as well as three “Hold” ratings. In addition, the median target price is $272, providing serious upside. The stock trades today at around $230.
Novavax shareholders need more analysts to start covering its stock. Seven just doesn’t cut it. I mean, Ocugen (NASDAQ:OCGN) has four analysts covering it, and it doesn’t even own the Covid-19 vaccine it’s trying to bring to the U.S. and Canada.
I find it hard to believe that Novavax will be completely shut out of the Covid-19 vaccine game, but you’ve got to be patient. The FDA won’t be bullied into making a snap decision about any vaccines.
If we don’t hear from Novavax by mid-October, then I’d start to worry. Until then, chill.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.
