Novavax (NVAX) Stock Attracts Attention Amid Earnings Estimate Revisions

Novavax's stock has returned -6.1% over the past month, underperforming the Zacks S&P 500 composite's +1.9% change. The company is expected to post a loss of $0.26 per share in the current quarter, with a change of +65.8% from the year-ago quarter. For the current fiscal year, the consensus earnings estimate is $2.68, indicating a change of +317.9% from the prior year. Novavax is rated Zacks Rank #3 (Hold) due to the size of the recent change in the consensus estimate and three other factors related to earnings estimates.

Novavax Inc. (NVAX) has seen its stock return -6.1% over the past month, underperforming the Zacks S&P 500 composite's +1.9% change. The company is expected to post a loss of $0.26 per share in the current quarter, representing a +65.8% change from the year-ago quarter. For the current fiscal year, the consensus earnings estimate is $2.68, indicating a +317.9% change from the prior year. Novavax is currently rated Zacks Rank #3 (Hold) due to the size of the recent change in the consensus estimate and three other factors related to earnings estimates [1].

At the Cantor Global Healthcare Conference 2025, Novavax presented its strategic transformation and future growth plans. The company is transitioning from a single-product focus to a partnership-driven model, emphasizing out-licensing its technology. The Sanofi partnership is central to this strategy, with significant milestone payments and royalty expectations [2]. Novavax aims for non-GAAP profitability by 2027, contingent on Sanofi's market performance. The company is also exploring the application of its Matrix M adjuvant in oncology and other vaccine platforms.

Financial results include milestone payments of $50 million expected upon transitioning the MAH for the US and Europe to Sanofi, and $75 million anticipated at the end of next year with the completion of tech transfer to Sanofi. Royalty rates from Sanofi include $200 million in royalties per $1 billion in sales of the COVID vaccine, and $100 million in royalties per $1 billion in sales of combination flu and COVID vaccines. The company is targeting R&D and SG&A expenses of $250 million by 2027, an 85% reduction from peak levels. Short-term liabilities have been reduced from $2.6 billion to below $400 million.

Sanofi has assumed commercial leadership for Novaxivid in the US and select other markets, with the MAH transition for the US and Europe to Sanofi planned for later this fall. The company continues operational support for Sanofi, with reimbursements for these efforts. Novavax received full BLA licensure for its COVID vaccine, aligned with mRNA vaccines. The vaccine market is projected to grow significantly, offering opportunities for Novavax's combination vaccines.

The company's R&D pipeline includes early-stage programs in RSV, pandemic flu, C. Diff, and shingles. Novavax is actively pursuing additional out-licensing deals for Matrix M and new assets. The vaccine industry is expected to grow from $57 billion in 2024 to over $75 billion by 2030.