Novavax Plunges on Earnings Miss: Falling Knife or Buying Opp?

Core Insights - Novavax Inc. has experienced significant volatility in its stock price, driven by the performance and market reception of its COVID-19 vaccine, Nuvaxovid, and a recent licensing deal with Sanofi [1][3][4] Group 1: Company Overview - Novavax is a biotechnology company focused on developing vaccines for serious infectious diseases, with its primary product being the COVID-19 vaccine, Nuvaxovid [1] - The company has been in operation for 35 years but has only received FDA approval for its COVID-19 vaccine [5] Group 2: Stock Performance - Novavax shares peaked at $331.68 in February 2021 but fell to $3.53 by February 2024 due to operational missteps [1] - Following a $1.2 billion licensing deal with Sanofi, shares surged to $23.86 in June 2024 before dropping below $10.00 after the Q2 2024 earnings report [1][3] Group 3: Sanofi Licensing Deal - The deal with Sanofi includes an upfront payment of $500 million and potential additional revenues of up to $770 million based on development milestones [4] - Sanofi will take a 5% equity stake in Novavax for $70 million and will license Novavax's adjuvanted COVID-19 vaccine starting in 2025 [4] Group 4: Financial Performance - Novavax reported Q2 2024 EPS of 9 cents, missing consensus estimates by 68 cents, with revenues dropping 2.1% year-over-year to $415.5 million [7] - Product sales for Q2 2024 were $19.9 million, a significant decrease from $285.2 million in the same period the previous year [7] Group 5: Future Developments - Novavax is developing a combination COVID-Influenza vaccine, expected to enter Phase 3 clinical studies, and has a preclinical RSV vaccine in development [5] - The company has filed for FDA approval for its updated COVID-19 vaccine targeting specific variants and is anticipating lower vaccine deliveries in 2024, adjusting its revenue guidance to $700 million to $800 million [9][10]