Novavax’s 16% Surge: How Q1 Results and FDA Hopes Are Driving the Rally

Shares of Novavax (NVAX) surged 16% to $6.91 on May 8, 2025, after the company reported a stunning first-quarter earnings beat and revised its full-year guidance upward. The rally reflects renewed optimism about the biotech’s financial turnaround and its path to FDA approval for its protein-based vaccine, Nuvaxovid. Let’s unpack the drivers behind this move—and the risks still lurking.

The Financial Turnaround: Revenue Soars, Costs Shrink

Novavax’s Q1 results were a stark contrast to its struggles in 2024. Revenue jumped to $667 million, a 599% year-over-year increase, crushing analysts’ $344 million estimate. This surge wasn’t from vaccine sales alone: $603 million came from the termination of two Advance Purchase Agreements (APAs) tied to prior pandemic-era government contracts. The remaining $45 million in licensing and royalty revenue included a $40 million payment from partner Sanofi, tied to upfront fees, milestones, and cost reimbursements for their collaboration on a combined influenza-COVID-19 vaccine.

Crucially, Novavax turned profitable for the first time in years. EPS hit $2.93, a 312% earnings surprise versus the $0.71 consensus. Net income soared to $519 million, compared to a $148 million loss in Q1 2024. Cost-cutting also shone: R&D spending fell to $89 million, while sales and marketing expenses dropped to $48 million—down from $87 million a year prior—as the company scaled back pandemic-era commercial operations.

The FDA’s “Approvable” Signal and $175M Milestone

While the FDA missed its April 1, 2025, deadline to approve Nuvaxovid for full licensure, Novavax’s SEC filing revealed a critical detail: the agency has deemed its Biologics License Application (BLA) “approvable” pending a postmarketing commitment for additional data. This is standard for some approvals and does not block final authorization.

Investors are betting this delay is short-lived. Full FDA approval would unlock a $175 million milestone payment from Sanofi, triggered once the vaccine gains full licensure. More importantly, it would allow Novavax to market Nuvaxovid beyond emergency use, competing directly with Pfizer and Moderna.

The Sanofi Partnership: A Double-Edged Sword

Novavax’s decision to hand over commercialization of Nuvaxovid to Sanofi in key markets starting in 2025–2026 is both a strategic move and a risk. The partnership aims to reduce operational costs while leveraging Sanofi’s distribution networks. This shift is reflected in Novavax’s revised guidance: $610 million of 2025 revenue will come from Nuvaxovid sales, excluding any contributions from Sanofi’s influenza-COVID combo vaccines.

But reliance on Sanofi introduces execution risk. Excluding Sanofi-linked revenue from its guidance underscores Novavax’s dependence on its partner’s sales performance—a potential weakness if demand for standalone COVID vaccines wanes.

The Bottom Line: A Bullish Catalyst, but Risks Remain

The stock’s 16% surge reflects a reevaluation of Novavax’s prospects. The company is now cash-positive, with $747 million in liquidity—enough to fund operations through 2025—and its revised $975M–$1.025B revenue guidance blows past prior estimates.

Yet the rally isn’t without concerns. The FDA’s timeline remains uncertain, and demand for standalone vaccines could erode as combination shots (like Sanofi’s influenza-COVID combo) gain traction. Still, the $175 million milestone and full FDA approval are near-term catalysts that could push the stock higher.

For investors, Novavax now looks like a high-risk, high-reward bet. The stock’s 54% rise over the past year suggests the market is pricing in success—but a stumble on FDA approval or Sanofi’s execution could reverse the gains.

Final Take: Novavax’s Q1 results and FDA progress have reignited investor enthusiasm. But with so much riding on external factors, the rally’s staying power hinges on execution—and the ever-shifting landscape of pandemic-era demand.