Novavax's Licensing Deal with Sanofi Boosts Q1 Earnings, Analysts Raise Price Target

By Don Francis, Editor
May 14, 2024 9:29 AM UTC
Novavax's Licensing Deal with Sanofi Boosts Q1 Earnings, Analysts Raise Price Target

TD Cowen's Brendan Smith raised their price target on Novavax (NASDAQ: NVAX) by 100% from $5 to $10 on 2024/05/13. The analyst maintained their Hold rating on the stock.

Novavax, a biotechnology company focused on vaccine development, recently reported its Q1 2024 earnings. One of the highlights was the licensing deal with Sanofi, which provided Novavax with $570 million upfront, along with the potential for additional milestone payments and a flu combo vaccine licensing deal.

In Q1 2024, Novavax beat expectations with a loss per share of $1.05, compared to the Thomson Reuters Consensus Estimate of $(1.06). This is a significant improvement from Q1 2023's loss of $(3.41). The company also reported revenue of $93.86 million, up from $80.95 million in the same period last year.

The co-exclusive licensing agreement with Sanofi is a major development for Novavax. This partnership aims to co-commercialize the COVID-19 vaccine, develop novel COVID-19-influenza combination vaccines, and create new vaccines utilizing Novavax's Matrix-MTM adjuvant. Additionally, Novavax announced the removal of a going concern notice, indicating increased confidence in the company's financial stability.

Looking ahead to FY 2024, management provided positive guidance. They expect revenue and Sanofi agreement payments to range from $970 million to $1.17 billion, up from the prior guidance of $800 million to $1 billion. R&D and SG&A expenses are projected to be between $700 million and $750 million, adjusted from the previous range of $700 million to $800 million.

President and CEO John C. Jacobs expressed his enthusiasm for the partnership with Sanofi, stating that it marks the beginning of an exciting new chapter for Novavax. He believes that the combined strength of Novavax and Sanofi will help fulfill the company's mission of developing and improving access to life-saving vaccines.

Since the release of Novavax's Q1 2024 earnings report, the company's stock price has seen significant growth. It is up 47.6% in the period following the report and has risen 61.7% year-over-year, outperforming the S&P 500, which has increased by 26.2%.

Analyzing TD Cowen analyst Brendan Smith's track record, it is important to note that they are ranked in the bottom 28% out of 4,581 Wall Street analysts. Smith specializes in the Healthcare sector and has an average return of -14.9% with a 50% win rate, according to data from WallStreetZen.

Novavax, Inc. is a biotechnology company headquartered in Gaithersburg, Maryland. The company's focus is on the discovery, development, and commercialization of vaccines to prevent serious infectious diseases and address health needs. Some of Novavax's vaccine candidates include NVX-CoV2373, a coronavirus vaccine candidate currently in Phase III trials, NanoFlu, a nanoparticle seasonal quadrivalent influenza vaccine candidate in Phase 3 clinical trial, and ResVax, a respiratory syncytial virus (RSV) fusion (F) protein nanoparticle vaccine candidate. Novavax also has collaborations with Takeda Pharmaceutical Company Limited for the development, manufacturing, and commercialization of NVX-CoV2373, a COVID-19 vaccine candidate.

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