Chardan Capital analyst Keay Nakae is out today with a research note on shares of Novavax, Inc. (NASDAQ:NVAX), reiterating a Neutral rating, while slashing the price target to $1.50 (from $5.75), after the company’s RSV-F vaccine candidate failed to achieve the pre-specified primary efficacy endpoint as well as the secondary endpoint in a phase 3 study.
Nakae commented, “At this point we believe that Management needs to articulate how they intend to address a number of key challenges. With our modeling of potential revenue from this indication now pushed out at least two years further, and our belief that this asset can no longer be partnered at this time, we want to know what changes will be implemented to lower the current high cash burn rate and plans for securing additional capital, which implies further share count dilution.”
“For now, Management has stated that it intends to continue with the development of an RSV vaccine for elderly patients. This may evolve into a regimen that involves repeated booster shots. Ideally, they would like to take advantage of the upcoming influenza/RSV season to capture new clinical data, but we don’t see the value of doing so without a well designed clinical program. Whatever protocol they proceed with will need to instill investor confidence that a positive trial outcome is attainable,” the analyst added.
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Keay Nakae has a yearly average return of -20.7% and a 28% success rate. Nakae is ranked #3988 out of 4166 analysts.
Out of the 8 analysts polled by TipRanks (in the past 3 months), 6 rate Novavax stock a Hold, while 2 rate the stock a Buy. With a return potential of 394%, the stock’s consensus target price stands at $7.17.