- Novavax (NVAX) still awaits FDA approval.
- Its vaccine could be attractive to the unvaccinated.
- Revenue projections are compelling.
Now is the time to invest in Novavax (NASDAQ:NVAX) stock. The dark horse vaccine candidate has yet to receive authorization in the U.S. for its vaccine, Nuvaxovid. That, however, looks increasingly likely to change in the near future. Once granted approval by the U.S. Food and Drug Administration, share prices will spike. And they should remain elevated for a time thereafter.
Couple that with the company’s expectations of how FDA authorization will affect the company and it is becoming clear that Novavax shares could rise quickly in the near future. Investing in NVAX stock is questionable given that there are multiple approved vaccines in the U.S. However, it looks to have a latent appeal that others don’t, and that matters.
| NVAX | Novavax | $74.13 |
Nuvaxovid’s Appeal and Technology
Investors might logically wonder why it even matters at this point whether Novavax receives FDA approval. BioNTech (NASDAQ:BNTX) and Pfizer (NYSE:PFE), Johnson & Johnson (NYSE:JNJ) and Moderna (NASDAQ:MRNA) were all granted FDA approval long ago.
And with 77% of the population having received at least one dose there doesn’t look to be as great an opportunity there for Novavax. It is 2022, not 2020, and most of the enthusiasm has worn off for vaccines in a sense. It is worthwhile to consider whether vaccine hesitancy precludes any sort of real opportunity at this time for Novavax. Even if it receives FDA approval, the thinking goes, no one is going to care. Those who don’t want vaccines aren’t going to be any more interested in Nuvaxovid than the other prominent vaccines.
Nuvaxovid is based on decades-old technology used to inoculate babies against hepatitis B. As the Wall Street Journal reported, that could ease the hesitancy of some who were unwilling to receive other vaccines.
That same article also points to the idea that Novavax has been in development for much longer than any of the three currently approved vaccines. That at least suggests that some of the 23% of the U.S. population that are unvaccinated might consider Nuvaxovid more readily: Many who have refused to get vaccinated have raised concerns that the vaccines were developed too quickly and given approval without enough oversight.
For both of those reasons, Novavax could fare well, although it is late in the game so to speak. Indeed, Novavax has hinted that it expects a strong demand which should translate to rapidly rising top-line results.
NVAX Stock Earnings
When Novavax released fourth-quarter and full-year results on Feb. 28 there was reason to be optimistic. The firm gave this guidance: “Novavax expects to achieve full year 2022 total revenue of between $4 billion and $5 billion. Total revenue reflects all sources, including product sales of Nuvaxovid by Novavax, grants revenue, royalties and other revenue.”
If that comes to be, then Novavax will essentially have increased its top-line by a factor of four. The Maryland-based firm reported $1.146 billion in revenues during the 12-month period that ended Dec. 31.
That alone has investors’ interest piqued once again.
Ultimately a few factors are going to be very important to Novavax assuming it does receive FDA approval. One is how much doses will cost. Vaccine prices have varied, and the U.S. has been able to secure supplies at lower costs. That doesn’t bode particularly well for Novavax because it could sell vaccines in other countries at better prices.
But the real issue is what will $4 to $5 billion in revenues do to the bottom line in 2022. Novavax posted a net loss of $1.743 billion on $1.146 billion in revenues in all of 2022.
The company has already absorbed massive R&D expenses to get to this point. So that guidance will lead to a net gain, in theory.
What to Do With NVAX Stock
I believe Novavax will ultimately win FDA approval. That’ll lead to a boost to the share price that should remain high for quite some time. NVAX stock is poised to rise based on analyst projections, and it’s hard to bet against it now that tides are finally changing.
On the date of publication, Alex Sirois 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.
