Can Coronavirus Vaccine Efforts Aid Novavax (NVAX) Q3 Earnings?

We expect investors to focus on Novavax, Inc.’s NVAX development efforts for its coronavirus vaccine candidate NVX-CoV2373 when it reports third-quarter 2020 earnings results.

The company’s surprise record has been mixed so far as its bottom line beat estimates in two of the trailing four quarters and lagged the same on the other two occasions, the average beat being 13.80%. In the last reported quarter, Novavax witnessed an earnings surprise of 47.37%.

Shares of Novavax have skyrocketed 2151% in the year so far against the industry’s 4.9% decrease.

Let’s see how things have shaped up for this announcement.

Key Factors to Note

Novavax’s portfolio is currently devoid of any approved product. As a result, the company is yet to generate any revenues from its product sales.

On the third-quarterearnings call investors’ will likely keep tabs on the progress of Novavax’s pipeline of vaccine candidates, especially the coronavirus vaccine.

The company has been actively engaged in developing its coronavirus vaccine NVX-CoV2373. In September 2020, Novavax initiated the first phase III study evaluating the safety, efficacy and immunogenicity of NVX-CoV2373 in the United Kingdom. The study is being conducted in partnership with the UK Government’s Vaccines Taskforce and is expected to enroll over the next four to six weeks around 10,000 individuals aged between 18 years and 84 years regardless of any relevant co-morbidity.

However, earlier this week, Novavax announced that above study expanded to 15,000 volunteers, having already enrolled more than 5,500 participants to date. Interim data from the same is expected in the first quarter of 2021.

Meanwhile, the phase III study of NVX-CoV2373 in the United States and Mexico is expected to begin by the end of November. This study is being conducted under the U.S. government’s Operation Warp Speed (OWS). An update on the timeline of these studies is expected during the third-quarter conference call.

The study and development activities related to NVX-CoV2373 are likely to have escalated the operating expense in the to-be-reported quarter.

Novavax already received a $2-billion funding for developing NVX-CoV2373.

Meanwhile, Novavax has been extending its global manufacturing capacities through significant collaborations or acquisitions of companies, thereby providing contract development and manufacturing services to manufacture NVX-CoV2373.

We note that the company successfully completed a phase III study on its lead vaccine candidate NanoFlu, which it evaluated for seasonal influenza earlier this year. The candidate was found non-inferior to Sanofi’s SNY influenza vaccine Fluzone.

Novavax will file a biologics license application (BLA) to the FDA shortly, seeking an accelerated approval for NanoFlu. The activities related to filing a BLA might have shot up the company’s operating expenses. An update on the regulatory timeline of the vaccine is expected during the upcoming investors’ call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Novavax this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: Novavax has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate stand at $2.36 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Novavax currently carries a Zacks Rank #4 (Sell).

Novavax, Inc. Price and Consensus

Novavax, Inc. Price and Consensus

Novavax, Inc. price-consensus-chart
| Novavax, Inc. Quote

Stocks to Consider

Here are some drug/biotech stocks worth considering from the same space as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Alnylam Pharmaceuticals ALNY has an Earnings ESP of +4.23% and a Zacks Rank #3, currently. The company is scheduled to report earnings on Nov 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vertex Pharmaceuticals Incorporated VRTX has an Earnings ESP of +3.83% and a Zacks Rank of 3, presently. The company is scheduled to report earnings on Oct 29.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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