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What's in the Cards for Novavax (NVAX) This Earnings Season?

Zacks Equity Research

In the absence of an approved product, investors’ focus will be on the path forward for Novavax, Inc.’s NVAX two vaccine candidates when the company reports first-quarter 2019 results.

The company’s earnings missed the Zacks Consensus Estimate in one of the last four quarters and matched the same thrice with the average negative surprise being 2.08%.

Shares of Novavax have declined 71.1% so far this year against the industry‘s rise of 4.7%.

In the last reported quarter, Novavax reported a positive earnings surprise of 8.33%.

Let’s see how things are shaping up for this announcement.

Things to Watch Out For

Investors will likely focus on the path forward for the company’s lead vaccine candidates – ResVax and Nanoflu – on the first-quarter earnings call.

Novavax is planning to initiate a phase III study on its influenza vaccine candidate, Nanoflu, following the successful completion of a phase II study earlier in January. Data from the mid-stage study showed that Nanflu vaccine generated superior hemagglutination inhibition antibody (“HAI”) responses in patients compared to leading flu vaccine, Sanofi’s SNY Fluzone.

In February, the company announced that pneumonia vaccine candidate, ResVax, failed to meet primary endpoint in a phase III study evaluating it in infant patients. However, Novavax expects to meet regulatory authorities to assess opportunities for submission of marketing application for ResVax based on efficacy against a secondary objective.

The development of ResVax was funded by a grant, which generated revenues for the company. However, with its failure to meet primary endpoint in the late-stage clinical study, the company is unlikely to generate any revenues in the soon-to-be reported quarter.

Research and development (R&D) expenses decreased in the last reported quarter due to lower development activities related to ResVax. We expect expenses to decrease in the first quarter following the completion of the ResVax late-stage study. However, increased developmental activity for Nanoflu is likely to offset the decline in R&D expenses.

Novavax is focused on developing vaccines for prevention of serious infectious diseases.

Earnings Whispers

Our proven model does not conclusively show that Novavax is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Earnings ESP: Novavax’s Earnings ESP is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 12 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Although Novavax’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Novavax, Inc. Price and Consensus


Novavax, Inc. Price and Consensus | Novavax, Inc. Quote

Stocks That Warrant a Look

Here are some biotech stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

Gilead Sciences, Inc. GILD has an Earnings ESP of +1.54% and a Zacks Rank #2. The company is scheduled to release first-quarter results on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Horizon Pharma HZNP has an Earnings ESP of +25.00% and a Zacks Rank #3. The company is scheduled to release first-quarter results on May 8.

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