What occurred
Shares of Novavax (NVAX -17.35%) had been plunging for a second consecutive day on Wednesday and had been down 14.1% as of 12:24 p.m. ET. At present’s downturn is a continuation of a sell-off stemming from traders’ worries about gross sales of Novavax’s COVID-19 vaccine.
The corporate missed Wall Road’s estimates with its first-quarter outcomes. It maintained its full-year 2022 income steerage of between $4 billion and $5 billion. Nonetheless, it additionally famous that Gavi, an alliance centered on distributing COVID vaccines to low- and middle-income nations, is looking for to revise the variety of doses ordered and the timing for cargo.
So what
There’s a purpose for concern about Novavax’s capability to satisfy its 2022 income steerage. To date, the corporate hasn’t obtained any orders from Gavi. Some nations are experiencing a provide glut of vaccine doses. Gavi’s want to alter the phrases of its cope with Novavax is a mirrored image of this.
However a great case could possibly be made that Novavax’s valuation already has this uncertainty baked into the share worth. The vaccine inventory trades at lower than 1.7 instances anticipated earnings. Its market cap of $3.6 billion is lower than the low finish of its income outlook vary.
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Now what
Buyers will clearly wish to watch what occurs with Gavi. However Novavax might have a constructive catalyst earlier than something occurs on that entrance. The Meals and Drug Administration has scheduled an advisory committee assembly for June 7 to assessment the Emergency Use Authorization submitting for the corporate’s COVID-19 vaccine.
