Novavax: BofA Securities downgrades to Neutral, PT cut to $9 from $10.

Novavax: BofA Securities downgrades to Neutral, PT cut to $9 from $10.

BofA Securities has downgraded Novavax (NVAX) to Neutral, reducing its price target from $10 to $9. The move comes amidst a shifting regulatory landscape and ongoing development challenges for the company's flu-COVID combination vaccine. Analysts at BofA Securities cited uncertainties about the approval process for seasonal COVID-19 vaccines and the potential impact of Secretary Robert F. Kennedy Jr.'s views on vaccine technology as factors contributing to the downgrade [1].

In recent months, the FDA has implemented stricter guidelines for vaccine approvals, requiring efficacy data and a saline placebo in clinical trials. This shift has added complexity to the approval process for both traditional and mRNA-based vaccines. Novavax, which has a protein-based COVID-19 vaccine, has faced delays in obtaining full approval, with its Nuvaxovid vaccine initially approved under Emergency Use Authorization [1].

The company's flu-COVID combination vaccine, which uses Novavax's Matrix-M adjuvant, is currently on hold while the company seeks a development partner. Despite this setback, Novavax remains optimistic about its strategic partnerships and the potential for future growth. The company's CEO, Silvia Taylor, emphasized the importance of frequent communication with drug regulators to navigate the evolving regulatory environment [1].

Analysts have expressed varying opinions on Novavax's stock prospects. According to TipRanks, five analysts have given the stock a Hold rating, with an average price target of $10.20 for the next 12 months. While the consensus is neutral, there is a wide range of price targets, from a low of $6.00 to a high of $19.00 [2].

The regulatory uncertainty and development challenges faced by Novavax are not unique. Moderna, another company with an mRNA-based flu-COVID combination vaccine, has also encountered delays in obtaining efficacy data for the flu component. However, Moderna has since released Phase III results showing its vaccine beats current standards by 26.6% at preventing disease in adults aged 50 years or older [1].

In conclusion, Novavax faces a challenging regulatory environment and ongoing development hurdles for its flu-COVID combination vaccine. The BofA Securities downgrade reflects these uncertainties, but the company remains optimistic about its strategic partnerships and future growth prospects.

References:
[1] https://www.biospace.com/drug-development/after-moderna-pulled-its-shot-combination-flu-covid-vaccines-hang-in-limbo
[2] https://www.tipranks.com/stocks/nvax/forecast