Novavax (NASDAQ: NVAX) stock climbed almost 50% in intraday trading Monday after TD Cowen analyst raised its price target.
Brendan Smith, an analyst at TD Cowen, recently revised the price target for Novavax (NVAX) to $10, marking a substantial increase from the previous target of $5.00. However, the firm maintained a Hold rating on the stock.
The adjustment comes as Novavax revealed a significant licensing deal with Sanofi. This deal involves an upfront payment of $570 million to Novavax, with the potential for an additional $700 million tied to developmental milestones for its COVID-19 mono and potential flu combo vaccines. Analyst Brendan Smith highlights the inclusion of a licensing agreement for Novavax’s adjuvant, a component that enhances vaccine immune response, as a significant aspect of the deal.
Smith views the financial injection from Sanofi as a boon for Novavax, providing a substantial cash runway to fuel the company’s vaccine platform. Despite acknowledging Novavax’s downward adjustment of sales guidance for fiscal year 2024 and a first-quarter miss, Smith underscores the market’s justified optimism on Monday, citing the transformative potential of the partnership with Sanofi.
The licensing agreement with Sanofi marks a strategic move for Novavax, aiming to accelerate vaccine candidate development while fortifying its financial standing. The company’s future development efforts stand to gain substantial support from the upfront payment and possible milestone payments.
The comments from Smith suggest that while the market for COVID-19 vaccines remains unpredictable, collaboration with a major pharmaceutical player like Sanofi could equip Novavax with the resources necessary to navigate the challenges ahead. The revised price target of $10.00 reflects the analyst’s confidence in the company’s prospects in light of the new partnership.
Novavax (NASDAQ: NVAX) Stock Movement
NVAX stock surged 47.64% to close at $13.11 on Monday, marking a remarkable increase of 175.42% for the week. Trading activity saw 122.85 million shares changing hands, well above the average daily volume of 9.43 million.
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