Could Novavax Be the Next Moderna?

Novavax (NVAX 11.63%) and modern (MRNA 2.81%) Both entered the coronavirus vaccine race around the same time, and their stock prices soared early in the pandemic. In fact, Novavax gained the most in 2020, up 2,700% compared to Moderna’s 400% increase. Investors have bet on the company’s coronavirus vaccine candidate and its ability to generate billions of dollars in revenue.

Moderna did well, dominating the vaccine market along with large pharmaceutical companies. Pfizer, with annual vaccine revenues reaching $18 billion. The stock has since fallen from its highs, but is still up more than 400% in five years. Moderna’s robust late-stage pipeline and commitment to deliver up to 15 new products over the next five years suggest there could be more upside. horizon.

Novavax missed its biggest profit opportunity by entering the coronavirus vaccine market late. This disappointed investors, and the stock price plummeted more than 90% from its peak. But the latest news – a massive partnership with a big pharma company. Sanofi — And Novavax’s progress on a new vaccine candidate is a sign that brighter days may lie ahead. Could Novavax gain share in the vaccine market and potentially become the next Moderna? Let’s explore.

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Novavax’s $1.2 billion deal

Last week, Novavax announced a $1.2 billion partnership with Sanofi. The pharmaceutical giant will co-commercialize Novavax’s coronavirus vaccine and pay $500 million upfront for the rights to use Novavax’s Matrix-M adjuvant technology in its own vaccines. The deal includes potential milestone and royalty payments to Novavax and also gives Sanofi a nearly 5% stake in the biotech company.

Considering that Sanofi makes the world’s best-selling flu vaccine and is a leader in the generic vaccines market, this represents a game-changing partnership for Novavax. And the timing is perfect. Novavax’s disappointing sales of its coronavirus vaccine have led to common financial problems in recent years and even raised questions about the company’s ability to continue operations last year. So the company launched a cost-cutting plan, cutting staff and cutting costs by hundreds of millions of dollars.

Meanwhile, Novavax’s combination coronavirus/flu vaccine candidate and its standalone flu candidate have performed well in clinical trials, and the company has begun making plans to boost sales of its current coronavirus vaccine during next fall’s vaccination season.

Today, the strength of Novavax’s investigational vaccine, its progress in reducing costs, and its deal with Sanofi mark a significant turning point for the biotech company. Because of the deal with Sanofi, Novavax said it is now no longer at risk of going out of business.

But does this mean Novavax can become a coronavirus vaccine market leader like Moderna? First, it’s important to remember that Moderna’s initial sales growth and subsequent stock price performance occurred during a rather unique time: the early pandemic period. So you can’t expect the same level of performance from Novavax or Moderna today.

How Sanofi Can Help Novavax

That said, we think Novavax could capture a significant share of the coronavirus vaccine market thanks to Sanofi’s expertise in the flu market. Sanofi has the commercial infrastructure and experience to bring Novavax products to the attention of healthcare providers.

Additionally, Novavax products are based on traditional vaccine technology, not the latest mRNA technology of the Moderna and Pfizer vaccines. This may appeal to people who have experienced side effects from mRNA vaccines or who prefer a more traditional vaccination approach.

The better news is that, from a financial perspective, the Sanofi deal will help Novavax advance its combined vaccine candidate and its standalone flu candidate.

Rising vaccine sales and the potential for positive reports from its vaccine development program could push Novavax’s stock price higher in the coming months, ultimately boosting its market valuation.

But I don’t think Novavax will be the next Moderna. That’s because the company’s pipeline is still limited and focused on potential combination vaccines and a flu vaccine. By contrast, Moderna has more than 40 candidates in its pipeline and, as mentioned above, expects to launch several products in the next few years.

But that doesn’t make Novavax a stock to avoid. With this new Sanofi deal, the biotech company appears to be on the road to recovery and has a key ally in place that can boost sales over time. So even if vaccine sales don’t surge, they could gradually move higher, brightening Novavax’s profit picture. And that makes Novavax an interesting biotech stock to buy today and hold long term as this new story unfolds.