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Shares of Novavax (NASDAQ:NVAX) are trading at 2-year lows after falling about 30% since the beginning of June.
The move lower comes despite a positive 21-0 expert recommendation vote in favor of Nuvaxovid EUA approval.
Bank of America analyst Alec W. Stranahan has reflected on Novavax stock and recent underperformance. He believes investors are disappointed about Nuvaxovid’s data that showed none of the variants identified in the study are currently considered variants of concern.
“The lack of omicron data (98.8% of US tested strains) leaves an unaddressed question mark that is in our view contributing to NVAX shares weakness (not to mention new omicron strains ba.1, ba.2 etc.). Although management remains confident on Nuvaxovid’s capabilities of addressing severe diseases in variants of concerns, we await omicron study results in 3Q to demonstrate continued effectiveness of Nuvaxovid,” Stranahan told clients in a note.
Overall, Stranahan says “it is less and less likely” that Nuvaxovid will be seen as a “blockbuster treatment” in the US, although there are opportunities globally.
“The majority of the market capture will predominantly be in the form of future boosters, which we consider to be difficult given 1) booster demand could sharply decline if reduced production is shown, 2) little evidence so far to make a case for Nuvaxovid as a superior heterologous option,” he added.
Bank of America rates Novavax stock as Underperform with a $35.00 per share price target.
Novavax stock is down a further 1.5% Wednesday.
