Stock Market

After recently reporting strong clinical data, Novavax (NASDAQ:NVAX) has tremendous opportunities in front of it. More specifically, the company’s coronavirus booster and its coronavirus-flu combination vaccine can become huge revenue generators. Given these points, I believe that NVAX stock can soar almost 12 times within the next year.

The company’s new CEO also makes me very upbeat about the stock’s outlook. Moreover, the NVAX stock has a very high short interest, and a strong rebound is underway.

Strong Clinical Data Gives Novavax a Huge Opportunity

Data unveiled by Novavax on April 5 showed that a single booster dose of its Covid-19 shot generated “immune responses [that] were comparable to three total doses of the approved messenger RNA (mRNA) vaccines. “

The fact that one dose of Novavax’s vaccine generated a “comparable” response to three shots of the mRNA vaccines should lead some doctors to recommend that their patients get Novavax’s vaccine instead of the mRNA jabs.

Meanwhile, data indicate that high percentages of the populations of other developed countries have yet to receive boosters. For example, in the U.S., as of last month, only 34 boosters had been administered per 100 people. In the U.K., that figure is 60, in France, it’s 71, and in Germany, it’s 78.

Remember that if the entire population had received three booster shots each, 300 booster shots per 100 people would be administered.

Regarding Novavax’s combined flu-Covid vaccine, the company reported that the job had elicited effective responses against both the coronavirus and “and multiple influenza strains.,” said.

Moreover, the combination shot was as safe as taking Novavax’s flu shot and coronavirus jab separately.

Why NVAX Stock Can Soar Almost 12 Times

According to Statista, global revenue from the coronavirus vaccine is expected to reach $26 billion next year. Let’s say that Novavax gets 15% of that revenue. That equates to $3.9 billion.

Meanwhile, revenue from flu vaccines came in at $4.28 billion in 2022. Let’s say the market grows to $4.5 billion next year, and Novavax gets 10% of that revenue. That works out to another $450 million.

If the drug maker meets these forecasts and gets a price-sales ratio of just two, its market capitalization would be $8.7 billion. That’s nearly 12 times its current market capitalization of $729 million.

But to make this forecast a reality, the company has to greatly step up its marketing efforts, both to doctors and consumers. It remains to be seen if it can do so. Still, with the firm under the leadership of a new, highly accomplished CEO, John Jacobs, I think it may indeed be able to do what’s necessary on the marketing front to at least come close to meeting my projections.

Three Other Reasons to Be Bullish on NVAX Stock

Speaking of the company’s new CEO, Jacobs, as I wrote earlier, has an excellent resume. Specifically, he was CEO of Harmony Biosciences (NASDAQ:HRMY) from 2018 until the beginning of 2023. During his tenure, Harmony launched a successful IPO in 2020, and its stock price climbed from $35 when it started trading to $53 just before it was announced that Jacobs was leaving.

Also, during his stint as CEO, the FDA approved the company’s narcolepsy treatment, Wakix. While a short seller has recently alleged that Harmony covered up the deaths of 12 patients who were taking the drug during clinical trials of the treatments, investment bank Raymond James, as well as Harmony itself, have denied the charges, with the bank writing that “Wakix’s safety profile is not an issue based on our own diligence with prescribers.” Moreover, Goldman Sachs recently named Harmony one of the stocks it believes are best positioned to avoid a recession.

In any event, the fact that Jacobs would choose to become CEO of Novavax after his successful tenure at Harmony suggests that Novavax’s prospects are strong. Moreover, Jacobs’ experience should be an asset for Novavax and NVAX stock going forward.

Also positive for the shares are its high short interest (nearly 40% of NVAX stock was being sold short as of April 6) and the fact that the Street seems to have viewed the data the company released on April 5 positively. As evidence of the latter point, NVAX stock jumped from $7.34 as of the close of trading on April 4 to $8.46 as of the market close on April 6.

As of the date of publication, Larry Ramer owned shares of NVAX. He may purchase shares of Eisai during the week of April 10. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.

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