Rising Covid-19 cases in China have sent Shenzhen and other cities back into lockdown and there have also been newly confirmed cases in other countries/regions such as the UK, Australia and the EU.
This is bad news for everyone, except of course for the makers of Covid-19 vaccines. The UK, Australia and the EU also happen to be places where Novavax (NVAX) has already signed APAs (advanced purchase agreements). Jefferies analyst Roger Song thinks this could naturally work to the vaccine maker’s advantage.
“While it's a bit early to call for another wave given current dominant variant remaining Omicron,” the analyst said, “we note this trend could motivate people to get boosted or vaccinated, potentially accelerating the administration of NVAX's CV19 vaccine and sustaining the demand for dose delivery.”
The EU has committed to purchasing 20-100 million doses, the United Kingdom is at 60 million, and Australia at 51 million. Other countries with meaningful APAs include New Zealand (11 million), Switzerland (6 million), and South Korea (in partnership with SK Biosciences; 40 million).
Overall, Song has tracked the delivery of ~47 million doses so far and ~37 million year-to-date, and counts around 55 million expected doses to be delivered in the “near-term.”
That said, based on available/incomplete information, year-to-date, no more than ~100,000 doses have actually been administered.
This implies there is only “limited real-world adoption,” although the analyst notes that could be driven by “large incumbent inventory, lack of booster approval, initial logistic restriction, beyond the tepid true demand.”
Song also remains confident in Novavax’ ability to make good on its 2022 guide for revenue to come in the ~$4-5 billion range as well as generate revenues over the long-term.
Down to the nitty-gritty, what are the implications for investors? Song maintained a Buy rating on NVAX shares, while his $198 price target suggests gains of a hefty 162% over the coming months. (To watch Song’s track record, click here)
The Street’s average target is only marginally lower; at $196, the figure implies the stock will climb 165% higher in the year ahead. Rating wise, barring one skeptic, all 5 other reviews are positive, making the consensus view on this stock a Strong Buy. (See NVAX stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.