Nuvaxovid, Novavax's Covid vaccine, could be approved by the EU-so what?

Finally, Novavax (NVAX), with its protein-based vaccine, may be close to winning its EUA.

Should the FDA grant the recommendation and use of the vaccine in emergency, NVX-CoV2373 would represent "the first COVID-19 protein-based vaccine available in the United States," Novavax says. On Tuesday, the company reported that the Food and Drug Administration's (FDA) Advisory Committee on Vaccines and Related Biological Products (VRBPAC) voted 21-0 (with one abstention) to recommend that the FDA authorize Novavax's "Nuvaxovid" coronavirus vaccine (aka NVX-CoV2373) to protect patients 18 years of age and older from Covid-19 infection.

Underlying VRBAC's recommendation is a Phase 3 clinical trial of the vaccine conducted in 30,000 participants, which found that NVX-CoV2373 was 90.4% effective in preventing infection and caused a low rate of "serious and severe adverse events." (The most common side effects were headache, nausea, injection site pain, fatigue-that is, the common side effects of any vaccine.)

Market introduction is not yet certain at 100%, commented Eric Joseph, an analyst at J.P. Morgan, following Tuesday's VRBAC recommendation, but still only a few hurdles remain for it to happen. According to the analyst, there could be a potential "$4-5 upside event" for Novavax shares if the EUA grant leads to U.S. government funding of vaccine production.

For a stock that as of today is trading at about $47.50, this is still not an exorbitant amount of upside and at the moment still unable to induce Joseph to upgrade Novavax stock to "buy." In fact, Eric remains firm with a neutral rating on the stock.

Going forward, Joseph expects Novavax stock discussions to focus on spreading Nuvaxovid in a market where three or four "widely approved vaccines" are already available. Potentially, Novavax's vaccine will gain interest in patients who prefer a protein-based vaccine over other mRNA-based vaccines. The analyst, however, admits to being "doubtful" about this possibility. According to him, more than two years into the pandemic, people who were procrastinating only for fear of "mRNA" would have already given in and taken the vaccine.

Simply put, the likelihood that there is a giant, untapped market for protein-based vaccines out there somewhere, just waiting for Novavax to come along--seems paltry.

In fact, as Joseph points out, FDA data report that out of about 31 million doses of Nuvaxovid distributed so far to health care providers worldwide (but not in the United States), only 2.5% of these doses have actually been administered. This suggests that Novavax is coming to market too late to achieve the results it should. The market for the Covid vaccine is exhausted.

However, not everyone thinks this way. More "buy" than "hold" ratings have been assigned in the past 3 months by other J.P. Morgan analysts. Moreover, the stock should be able to generate profit of about 175% as it rises to a price of $131 in the coming year.

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