JPMorgan on Novavax (NVAX): 'Share Gain Likely Short-Lived Given Gap 2025 Commercial Year'

JPMorgan analyst Eric Joseph reiterated an Underweight rating and $7.00 price target on Novavax (NASDAQ: NVAX).

The analyst comments "We caught up with mgmt on the heels of the now approved BLA for Nuvaxovid. Notwithstanding the focused label indication for older and high-risk adults and the incremental post-marketing commitment (PMC) for a phase 4 efficacy study, we view the approval as a solid near-term win for the vaccine and NVAX shares overall. Perhaps most importantly from a financial standpoint are the triggered and near-term potential milestone- related payments from Sanofi ($175M BLA milestone to be received in 3Q, $50M in additional milestones to come in 2H25). Regarding the age/risk-factor limitations on the label, we see the indicated population (65+y.o.s and 12-64yo’s at high risk) as the key commercial target populations and generally in line with our forecasts. While we PMC for an additional phase 4 efficacy study in 50-64yo’s may have initially prompted some doubt over Nuvaxovid’s longer-term regulatory outlook, mgmt stresses the study being a post marketing commitment, not a requirement (i.e., that the study’s outcome won’t be a determinant of sustaining product authorization). Additionally of note, any incremental cost associated with the additional PMCs is expected to net neutral to NVAX’s opex guidance through 2027. Stepping back, however, with Nuvaxovid sales expected to be de minimis in 2025 (commercial partner SNY viewing it as an educational/observational year), it won’t be until 2H26 when Nuvaxovid’s reception within the Covid vaccine market place can be better assessed. Coupled with lack-of-value accretive events from Novavax’s proprietary pipeline over the mid-term horizon, we anticipate shares giving back much of today’s upside reaction (NVAX +23%; NBI +1%) to the approval announcemen."

For an analyst ratings summary and ratings history on Novavax click here. For more ratings news on Novavax click here.

Shares of Novavax closed at $6.73 yesterday.

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