Novavax (NVAX) to Receive $350M From Canada, Stock Rises 30%
Novavax, Inc. NVAX has amended its advanced purchase agreement with the Canadian government per an announcement in a regulatory filing, which was published last week. The reason for the amendment was the Canadian government’s decision to revise its previous purchase commitment of Covid-19 vaccines with Novavax.
Per the terms of the amendment, Canada renounced certain doses of Novavax’s Covid-19 vaccines which were previously scheduled for delivery and reduced the number of vaccine doses due for delivery. The Canadian government also revised the delivery schedule for the remaining vaccine doses that are yet to be delivered. Additionally, another clause was added to the agreement which required Novavax to make use of the Biologics Manufacturing Centre (BMC) Inc. to produce bulk antigen for vaccine doses, which is scheduled for delivery in 2024 and 2025.
As compensation for the forfeited vaccine doses, NVAX reported that the Canadian government has agreed to pay the former a total sum of $349.6 million. This amount is payable in two equal installments in 2023, the total value of which is equal to the remaining balance owed by the customer concerning such forfeited vaccine doses.
The company’s stock swiftly jumped about 30% on Monday in response to the positive news which will bring an influx of cash into the company. Year to date, shares of Novavax have lost 9% compared with the industry’s 10.6% decline.
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The first installment of the total payable amount will be made upon execution of the amendment, but the second installment payment has a contingency. It states that the second installment payment will be made only after Novavax delivers the remaining vaccine doses in the second half of 2024.
Furthermore, the Canadian government retains the right to terminate the Advanced Purchase Agreement if NVAX fails to gain regulatory approval for using BMC to produce vaccines on or before Dec 31, 2024. The amendment reportedly maintained the total contract value of the original Advanced Purchase Agreement.
Novavax, Inc. Price and Consensus
Novavax, Inc. price-consensus-chart | Novavax, Inc. Quote
Zacks Rank and Other Stocks to Consider
Novavax currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the same industry are ADC Therapeutics ADCT, Anixa Biosciences ANIX and Akero Therapeutics AKRO, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 90 days, the Zacks Consensus Estimate for ADC Therapeutics’ 2023 loss per share has widened from $2.58 to $2.63. During the same period, the estimate for ADC Therapeutics’ 2024 loss per share narrowed from $2.72 to $2.49. Year-to-date, shares of ADCT have lost 38.3%.
ADCT beat estimates in three of the trailing four quarters, missing the mark on one occasion, delivering an average earnings surprise of 10.70%.
In the past 90 days, the Zacks Consensus Estimate for Anixa Biosciences’ 2023 loss per share has narrowed from 43 cents to 33 cents. The estimate for Anixa Biosciences’ 2024 loss per share is currently pegged at 38 cents. Year-to-date, shares of ANIX have lost 29.6%.
ANIX beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 31.21%.
In the past 90 days, the Zacks Consensus Estimate for Akero Therapeutics’ 2023 loss per share has narrowed from $2.92 to $2.80. During the same period, the estimate for AKRO’s 2024 loss per share narrowed from $3.31 to $3.27. Year-to-date, shares of AKRO have lost 17.9%.
AKRO beat estimates in three of the trailing four quarters, missing the mark on one occasion, delivering an average earnings surprise of 7.96%.
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