BNTX - Novavax downgraded at TD Cowen citing COVID uncertainty

2023-04-20 08:57:48 ET

Novavax ( NASDAQ: NVAX ) shares continued to tumble in the pre-market Thursday after TD Cowen downgraded the biotech, citing uncertainty related to a major contract dispute and questioning its ability to transition to commercial COVID vaccine market.

The analyst Brendan Smith argues that Gaithersburg, Maryland-based Novavax ( NVAX ) can risk up to $700M from its balance sheet pending arbitration with Gavi Vaccine Alliance over the supply of hundreds of millions of its protein-based COVID shot to WHO-backed COVAX facility.

Smith also expects NVAX to lag behind its rivals Pfizer ( PFE )/BioNTech ( BNTX ) and Moderna ( MRNA ) during the upcoming fall booster campaign, as its protein-based production takes at least six months to deliver commercial doses compared to three months for mRNA based platforms.

“This could delay a potential US rollout behind mRNA boosters from Moderna and Pfizer/BioNTech in the fall, both of whose commercial franchises are already bolstered by significant name-brand recognition,” the analyst added.

Despite positive views on the company’s Matrix-M adjuvant technology, Smith argues that Novavax’s ( NVAX ) “minimal penetration into the FY23 COVID market may limit the transition into a major commercial competitor & puts funding for the deeper pipeline at risk.”

TD Cowen downgrades NVAX to Market Perform from Outperform and slashes its price target to $10 from $55 per share.

Read: Seeking Alpha analyst Out of Ignorance notes Novavax ( NVAX ) could deliver high returns for risk-taking investors “under the right circumstances.”

For further details see: