Novavax will have a big week this week (NVAX). The FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) will meet on Tuesday, June 7, to talk about Novavax’s EUA application to use its Covid-19 vaccine, NVX-CoV2373, as an adult primary vaccine.
Last week, before the meeting, the FDA put out briefing documents that brought up possible problems. These included the risk of myocarditis (inflammation of the heart muscle), especially in young men, one case of Guillain-Barre syndrome, and worries about CMC (chemistry, manufacturing, and controls) preparation.
Investors didn’t like this turn of events, so in the next session they sold 20% of their shares.
Roger Song of Jefferies “agrees with the uncertainties” listed in the document. However, the analyst says investors should keep an eye on a couple of points that will come to the forefront during the VRBPAC meeting and the final FDA decision/label.
One is about the problem of myocarditis. Song said this about his opinion on the matter: “As the overall incidence of myocarditis was very low and the same for both the vaccine and the placebo (0.007 percent and 0.005 percent), and was similar to (if not better than) that of mRNA vaccines, we will be interested to see how the myocarditis will be perceived (pre-marketing vs. post-marketing; natural history among young men; more vigilance due to incidence by mRNA vaccines) and
The other worry is about the problems with the CMC, which are partly to blame for the delay in submitting the EUA. Here, Song will want to know “what the status of the CMC is and how ready it is for the EUA decision after the VRBPAC meeting.”
Overall, though, Song thinks the odds are in favour of Novavax, even though there are some unknowns. He thinks there is a “high chance of final approval with likely similar label language.”
So, what do investors need to do? Song says that the stock is a “Buy,” and his $190 price target is the highest on the Street. The stock is expected to return 300 percent in the next year. (Click here to see Song’s track record.)
Based on the 5 Buys, 2 Holds, and 1 Sells, which make up the consensus, the analysts think this stock is a Moderate Buy. The outlook is much clearer about where the share price is likely to go. The average target price of $131 may not be as high as Song’s goal, but it could still give a return of 176% in one year. (Check out the TipRanks stock forecast for Novavax)
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Disclaimer: The views in this article are only those of the analyst who is being featured. The content is meant to be used only as a source of information. Before you put money into something, you should do your own research.