Why I Wouldn't Touch Novavax With a 10-Foot Pole

Core Viewpoint - Novavax is unlikely to perform significantly better over the medium term, with potential to be a wealth destroyer for investors in the next five years [1] Group 1: Company Performance - Novavax launched its coronavirus vaccine, Nuvaxovid, but has faced inconsistent revenue and earnings, leading to subpar stock performance [1] - The company's market capitalization is currently $1 billion, with a current stock price of $6.78 [5][6] - The stock has a 52-week range of $5.01 to $11.55, indicating volatility in its market performance [6] Group 2: Strategic Partnerships - Novavax signed a deal with Sanofi, granting commercialization rights for Nuvaxovid, which included an upfront payment of $500 million and potential milestone payments of up to $700 million [4] - The partnership allows Sanofi to utilize Novavax's proprietary Matrix-M adjuvant technology in its vaccine development [4] Group 3: Market Challenges - Demand for coronavirus vaccines is declining, and regulatory changes in the U.S. may limit access for healthy patients, impacting Novavax's royalty revenue [6] - Nuvaxovid is trailing behind leading vaccines in the market, which poses a challenge for future revenue generation [6] Group 4: Pipeline Prospects - Novavax's potential future success depends on the progress of Sanofi's vaccine candidates that utilize its technology, but this is uncertain and relies on the lengthy drug development process [7] - The company has a poor track record over the past five years, with significant delays in launching Nuvaxovid, which raises concerns about its ability to develop new vaccines [7][8] - Novavax's leading candidates, including a stand-alone flu vaccine and a combined coronavirus/flu vaccine, face significant competition from other companies that have advanced in clinical trials [8]