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On May 19, JPMorgan analyst Eric Joseph reaffirmed an Underweight rating for Novavax Inc. (NASDAQ:NVAX) with a price target of $7. This comes after the Food and Drug Administration (FDA) approved the company's COVID-19 vaccine, however with limitations.
A closeup of a vial of the biotechnology company's vaccines.
The analyst noted that they view the approval as a solid near-term win for Novavax, Inc. (NASDAQ:NVAX), highlighting the expected milestone payment of $225 million from Sanofi. However, the vaccine has been approved with a label for only older and high-risk adults and requires a post-marketing commitment for an additional phase 4 efficacy study. Management believes the incremental costs related to this will be neutral for the operating expenses through 2027.
Joseph justified his Underweight rating on Novavax, Inc. (NASDAQ:NVAX) as he anticipates the vaccine sales to be minimal in 2025, and the company is viewing the year as educational/observational. Moreover, the analyst noted that this indicates that the vaccine’s market reputation will not be visible until the second half of 2026, thereby making the FDA approval only a near-term win.
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