by Ian Harvey
May 12, 2020
Novavax was up 30.81% at closing but skyrocketed another +50% in extended trading after NVAX highlighted an outside investment of $388 million, on top of an earnings report topping analysts expectations.
And, Stock Options Made Easy “Earnings Predictions” Members are already up potential profits of 354% based on a CALL OPTIONS trade.
After the market opened Tuesday the options trade potential profit has hit
NVAX skyrocketed Monday based on two major factors…..
Novavax shares surged 50% after hours, following a 30.81% rally in the regular session to close at $24.50.
The Recommended Trade.....
“Earnings Predictions” Members executed a call options trade on Novavax on Monday, May 11, 2020.
“Vaccine specialist Novavax, Inc. (NASDAQ: NVAX) will report earnings after the market closes. The consensus earnings estimate is $0.67 per share, which represents a year-over-year change of +69.6%, on revenue of $3.50 million, down 12.1% from the year-ago quarter, but the Whisper number is $0.73 per share.
For the last reported quarter, it was expected that Novavax would post a loss of $1.08 per share when it actually produced a loss of $1.13, delivering a surprise of -4.63%.
Over the last four quarters, the company has beaten consensus EPS estimates just once.
Shares of the late-stage biotech company have surged 360% since the beginning of the year while the coronavirus outbreak pushed most of the market lower.
Novavax announced really great results in March from a late-stage study of experimental flu vaccine NanoFlu. The nanoparticle-based vaccine went head-to-head against Sanofi's approved flu vaccine FluZone Quadrivalent. And NanoFlu appeared to beat Sanofi's market-leading vaccine in the clinical trial.
Like Gilead, Novavax could be a winner in the fight against COVID-19. The company expects to begin an early stage clinical study evaluating its experimental coronavirus vaccine candidate NVX-CoV2373 within a matter of days. Preclinical testing of the vaccine demonstrated promising results.
NanoFlu could easily generate peak annual sales of more than $500 million and could become a blockbuster if it's approved. With Novavax's market cap currently only a little over $1 billion, the stock has plenty of upside potential.
The flu vaccine represents a treatment area with fewer unknowns than COVID-19. The size of the global flu market and lasting nature of the illness -- we all know flu is around every year -- make NanoFlu a significant product for Novavax. The global flu vaccine market, at a compound annual growth rate of 7.7%, is expected to reach $7.34 billion by 2026.
The company recently said it identified a coronavirus vaccine candidate and plans on starting human trials by the middle of this month. The investigational vaccine produced high levels of neutralizing antibodies against the virus in animal studies. Novavax also noted a high titer level, meaning a high concentration of antibodies were produced -- an element that suggests the vaccine may work in humans.
COVID-19 has provided opportunity for a number of healthcare companies to take the baton and run with it. One of the names to force its way into public consciousness has been vaccine specialist Novavax (NVAX). The company was quick off the mark to begin developing a vaccine and has positioned itself at the forefront of the fight against COVID-19. Accordingly, the share price has shot up by a massive 345% year-to-date.
But there's more potential upside from here, argues H.C. Wainwright analyst Vernon Bernardino.
“We believe Novavax’ identification of NVX-CoV2373 as its lead candidate vaccine against SARS-CoV-2, supports our view of Novavax as a leading vaccine developer. Recall that the genetic sequence of SARS-CoV-2 had only become available in late January 2020. On April 8, 2020, Novavax announced that NVX-CoV2373 showed it was highly immunogenic in animal models,” Bernardino said.
Although still at the preclinical stage, Bernardino argues the results validate Novavax's “promising approach.” With the first in-human trial of NVX-CoV2373 anticipated to begin this month and the potential of preliminary data available as early as July, the analyst believes “positive Phase 1 results could be a positive catalyst in 3Q20.”
Bernardino also expects more funding to be heading Novavax’s way. Back in March, the company received $4 million from the Coalition for Epidemic Preparedness (CEPI) to accelerate the vaccine’s development. Following BARDA’s (the Biomedical Advanced Research and Development Authority), grant of $438 million to rival Moderna for the development of its CoV vaccine, Bernardino believes additional funds could be provided for the development of other vaccine candidates.
“We believe Novavax can qualify for an initial BARDA grant of $5M later this year, with potential for a more lucrative long-term commitment from BARDA in early 2021,” said the 5-star analyst.
With so much to look forward to, Bernardino raises the price target for NVAX to $33 (from $24) along with a Buy rating.
The Street is on the same page as Bernardino. 5 Buy ratings coalesce to a Strong Buy consensus rating. At $24.6, the average price target could provide investors with upside of 42% over the coming months.”
The Earnings Report…..
Novavax, a late-stage biotechnology company developing next-generation vaccines for serious infectious diseases, announced Monday its financial results and operational highlights for the first quarter ended March 31, 2020.
“Our accomplishments to-date in 2020, including significant progress in our influenza and COVID‑19 vaccine programs, are the most impressive in the company’s history,” said Stanley C. Erck, President and Chief Executive Officer of Novavax. “We shared successful pivotal Phase 3 results for NanoFlu that demonstrated both efficacy and safety in a pivotal trial, a significant milestone towards bringing this innovative product to an influenza market in need of new options. We also reacted quickly to the coronavirus pandemic by developing and quickly advancing NVX‑CoV2373, our COVID‑19 vaccine candidate, which shows strong potential to have a positive impact on this global health crisis. Looking ahead, with a strengthened balance sheet and CEPI’s substantial funding, we will focus on scaling up manufacturing and delivering clinical data for NVX‑CoV2373, while simultaneously completing the necessary actions needed to prepare our BLA filing for NanoFlu.”
Research and development expenses decreased 52% to $16.9 million in the first quarter of 2020, compared to $35.5 million in the same period in 2019. This decrease was primarily due to decreased development activities of ResVax, lower employee-related costs and other cost savings due to the Catalent transaction in 2019.
General and administrative expenses increased to $9.4 million in the first quarter of 2020, compared to $8.7 million for the same period in 2019.
Interest income (expense), net for the first quarter of 2020 and 2019 was ($3.0) million.
As of March 31, 2020, Novavax had $244.7 million in cash, cash equivalents, marketable securities and restricted cash, compared to $82.2 million as of December 31, 2019. Net cash used in operating activities for the first quarter of 2020 was $23.1 million, compared to $50.6 million for same period in 2019.
An announcement on Monday by the Coalition for Epidemic Preparedness Innovations (CEPI) saying they will invest up to an additional $384 million to advance clinical development of NVX‑CoV2373. Novavax will use the CEPI funds to advance NVX‑CoV2373 into clinical testing. With its earlier $4 million commitment in March, the extended collaboration brings CEPI’s total investment in NVX‑CoV2373 to $388 million.
CEPI, which was set up to fight emerging epidemics, said in March it will invest $4.4 million into deals with Novavax and Britain's University of Oxford to develop potential vaccines against COVID-19.CEPI has so far invested in the development of six vaccine candidates against COVID-19, including projects with the U.S. firms CureVac, Inovio Pharmaceuticals, Moderna, and with the University of Queensland in Australia.
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