SNY - Novavax: New Chapter Questions Remain

2024-06-20 15:02:43 ET

Summary

• Novavax, Inc. secured a lucrative deal with Sanofi, receiving potentially $1.2 billion in cash and future royalties for Covid vaccines.
• The deal significantly improved Novavax's financial position, but the stock has already rallied from $4 to $14, limiting potential upside.
• Novavax's future success hinges on the royalty revenue from the Sanofi deal in 2025, with limited ability to compete with Sanofi's commercialization capabilities.

In a matter of months, Novavax, Inc. ( NVAX ) went from a biotech with a questionable future to one flush with cash and a potentially huge royalty deal. Investors being too greedy and not alert were probably caught on the wrong side of the trade. My investment thesis is more Neutral on the biotech due to the stock now trading at nearly $14, up from only $4....

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