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Novavax (NVAX) Loss Widens in Q4, Revenues Top Estimates

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Novavax, Inc. NVAX incurred a loss of $2.70 per share in the fourth quarter of 2020, much wider than the year-ago quarter’s loss of $1.13 per share as well as the Zacks Consensus Estimate of a loss of $1.53 per share. This significant loss was due to higher costs to support the development of NVX-CoV2373, its COVID-19 vaccine candidate.

Revenues in the quarter were $279.7 million, significantly higher than $8.8 million in the year-ago quarter. Revenues increased due to services performed under the agreement with the Coalition for Epidemic Preparedness Innovations (CEPI) and participation in the U.S. government’s Operation Warp Speed (OWS) in relation to the clinical development of NVX-CoV2373. Revenues beat the Zacks Consensus Estimate of $212 million.

The company has obtained around $2 billion in funding from the CEPI (up to $400 million) and the OWS ($1.75 billion) for developing NVX-CoV2373. It has also obtained some funding from the The Bill & Melinda Gates Foundation.

Quarter in Detail

In the reported quarter, research and development expenses were $401.2 million, significantly up from $29.3 million in the year-ago quarter due to higher costs for the development of NVX-CoV2373 and higher employee-related costs.

General and administrative expenses also rose significantly year over year to $61.3 million due to higher professional fees for supporting NVX-CoV2373’s development and employee-related expenses.

Novavax’s shares were down 5.7% in after-hours trading on Monday. The stock has risen 115.5% this year so far compared with the industry’s increase of 3.2%.

Update on COVID-19 Vaccine/Other Pipeline Developments

NVX-CoV2373 is currently being evaluated in a phase III study. In January 2021, the phase III study in the United Kingdom met the primary endpoint by demonstrating a vaccine efficacy of 89.3%. The study also demonstrated 95.6% efficacy against the original strain of COVID-19 and 85.6% against the UK variant strain.

In the phase IIb South Africa study, NVX-CoV2373 demonstrated 49% efficacy in all participants and was 60% effective at preventing COVID-19 disease in the HIV negative patient population.

Additionally, Novavax is conducting the phase III PREVENT-19 study on NVX-CoV2373 in the United States and Mexico, which began in December last year. The company completed enrollment (30,000 volunteers) in the above study with data expected to be released in the second quarter of 2021. This study is being conducted under the OWS program. Additionally, last month, its Japan-based partner Takeda also initiated a phase I/II study on the candidate in the Japanese population. Novavax has plans to begin clinical studies in mid-2021 to evaluate variant strain vaccines as stand-alone and bivalent candidates

Novavax has started rolling review of its authorization application for NVX-CoV2373 to multiple regulatory agencies worldwide, including the European Medicines Agency based on data from the U.K. and South African studies. It expects to file for authorization in the United Kingdom and seek Emergency Use Authorization (EUA) from the FDA in the second quarter of this year.

Novavax signed global agreements for the delivery of approximately 300 million doses of NVX-CoV2373, if approved. Meanwhile, it partnered with the Serum Institute of India to jointly supply 1.1 billion doses of NVX-CoV2373 to Gavi through the COVAX facility.

This apart, Novavax completed a phase III pivotal study on its nanoparticle seasonal influenza vaccine candidate, NanoFlu. The study met all eight primary endpoints. NanoFlu was found non-inferior to Sanofi’s SNY influenza vaccine Fluzone.

Novavax will file a biologics license application to the FDA shortly, seeking an accelerated approval for NanoFlu.

Zacks Rank & Stocks to Consider

Novavax currently carries a Zacks Rank #3 (Hold).

Novavax, Inc. Price, Consensus and EPS Surprise

Novavax, Inc. Price, Consensus and EPS Surprise
Novavax, Inc. Price, Consensus and EPS Surprise

Novavax, Inc. price-consensus-eps-surprise-chart | Novavax, Inc. Quote

Some better-ranked stocks from the biotech sector include Moderna MRNA and Acorda Therapeutics ACOR. While Moderna sports a Zacks Rank #1 (Strong Buy), Acorda has a Zacks Rank #2 (Buy).

Moderna’s earnings per share estimates have moved up from $11.24 to $15.21 per share for 2021 and from $9.50 per share to $14.70 per share in the past 30 days. The stock has risen 50.7% so far this year.

Acorda’s stock is up 43.7 this year so far.

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