On Tuesday afternoon, the U.S. Food and Drug Administration (FDA) Vaccines and Related Biological Products Advisory Committee (VRBPAC) voted 19-2 to recommend that future booster shots for preventing infection with Covid-19 be tweaked to address "super-contagious" Omicron variants, as the Associated Press reports.
AP further notes that Pfizer (PFE) and Moderna (MRNA) are already on the case, and brewing up new booster vaccine formulas that they hope will satisfy the FDA. At the same time, however, Novavax (NVAX) is still trying to win approval of its own original-recipe Covid vaccine, known as NVX-CoV2373, or Nuvaxovid. Novavax thinks its vaccine, which is protein-based rather than mRNA-based, will prove to be effective at combating Omicron without further tweaking.
Just hours after the advisory committee vote, Novavax issued a press release of its own, discussing data that it has provided VRBPAC. As the company argued, Nuvaxovid incites "broad antibody responses" to both the original Covid-19 variant, to Omicron, and to "other circulating variants" as well. And just in case anyone missed the point, Novavax stated straight out that it "will be ready to supply Omicron-based vaccine this fall in accordance with FDA Advisory Committee recommendation" -- and noted that it told VRBPAC so when it participated in the same meeting that resulted in the 19-2 recommendation to focus on Omicron going forward.
So what does this mean for Novavax stock? Jefferies analyst Roger Song had some thoughts on that score.
The good news is: Song is optimistic. The analyst notes that in accordance with VRBPAC's wishes, in addition to its original recipe Nuvaxovid formulation that may soon receive FDA Emergency Use Authorization (EUA), Novavax is also working up two vaccines with Omicron in mind -- one that is "monovalent" (i.e. targeted specifically at preventing infection with the BA.1 Omicron variant), and a second that is "bivalent" -- designed to scare off both "ancestral" forms of Covid, and also BA.1.
Both of these more Omicron-specific vaccines are currently undergoing Phase 3 clinical trials, notes Song. What's more, the timeline actually looks kind of propitious for Novavax.
The EUA for original recipe Nuvaxovid could be granted as early as July, in time for Novavax to begin vaccinating any holdouts who might have been leery of taking an mRNA vaccine, and were waiting for Novavax to finish its protein-based vaccine. Then, once those initial rounds of immunization have been accomplished, and it's time to start thinking about a booster shot in the fall -- well, that's exactly the time VRBPAC is recommending the FDA start pushing Omicron-specific boosters.
And by then, not only Pfizer and Moderna, but Novavax, too, may have a booster or two (or four) to offer.
Based on this potential scenario, Song is sticking with his "buy" rating on Novavax, and his $190 price target, too. Investors could be sitting on returns of 232%, should his thesis bear fruit over the next 12 months. (See NVAX stock forecast on TipRanks)
Turning now to the rest of the Street, most other analysts are on the same page. Out of 9 analysts that have thrown an opinion into the mix, 7 were bullish, making the consensus rating a Moderate Buy. To top it all off, the $138 average price target brings the upside potential to 141%. (See NVAX stock forecast on TipRanks)
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