Novavax: The Frustration Is Real, And So Is the Sales Potential


Pharma companies hit gold during this pandemic. While it helped several companies scale and report record revenues, Novavax (NASDAQ:NVAX) is still struggling to make an impact in the market. The vaccine manufacturer suffered several setbacks and NVAX stock disappointed many investors.

Novavax (NVAX) vaccine for prevention of coronavirus, Covid-19, Sars-Cov-2 in doctors hands in rubber blue gloves
Source: Vladimka production /

The stock is down 66% in the past six months and has gone from $250 to $77 today. Novavax has been waiting for a very long time for the FDA approval and it may still take a couple of weeks. But this issue will be resolved in the near term and Novavax will be able to meet the vaccine demand.

There was a time when the stock showed immense potential and this is when investors were betting on it. However, the company could not deliver on time and the stock suffered. It is consistently declining and may continue to do so until its fourth-quarter results Feb. 28. A lot depends on the results and it will decide the fate of the stock.

Let’s dig deeper into why I would still hold NVAX stock.

Green Signals To Watch

Novavax already has approvals in a number of key markets across the world. Recently, the company received authorization for the Covid-19 vaccine from Health Canada. Its vaccine, Nuvaxovoid, helps prevent severe acute respiratory syndrome coronavirus 2 in people 18 and older. It is also the first protein-based vaccine that is authorized for use in Canada. Health Canada signed an advance purchase agreement for 52 million doses of the vaccine with an option for up to another 24 million doses.

According to Reuters, Novavax only delivered a fraction of the vaccine from the 2 billion shots it planned to deliver around the world this year. It has also delayed shipments to several countries including Europe. This means the shipments will take place sometime this year and it will reflect on the bottom line. Novavax recently reported that it has started shipping the first doses of the vaccine to EU member states.

The company also reported successful results from the pivotal phase 3 trial of its Prevent-19. It showed 80% efficacy in adolescents 12 to 18 in the U.S. The results are encouraging and there is going to be a huge demand for vaccines for adolescents as long as there are Covid-19 variants.

A lot of investors believe that the vaccine delays could make it obsolete but I do not share the same opinion. The variant is still present and so is the demand for vaccines. If the pandemic becomes endemic, we will continue to need vaccines for many years to come and Novavax will have a chance to cash in on the opportunity. It also has an opportunity to grab the market with its booster shots.

Despite being late to the party, Novavax could make the most of it.

The Bottom Line On NVAX Stock

Novavax has the approvals, and solid revenue can be made as long as it delivers the vaccines on time. One reason the company is suffering is that it delayed the key regulatory filing for its vaccine. B. Riley analyst Mayank Mamtani lowered the price target of NVAX stock to $265 with a buy rating ahead of the fourth-quarter results.

The company’s results will improve in 2022 as the revenue number will increase from the vaccine sales. This could be the year when the company’s fortunes change. NVAX stock is in the buying range currently.

If you own NVAX stock, hold it and wait for the fourth-quarter results and if you are keen on buying the stock, take a small position. It is unlikely that the stock will rally to new highs anytime soon. It can rally from the current level but a lot depends on the fourth-quarter results. The company certainly has a promising future.

On the date of publication, Vandita Jadeja 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 Publishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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