The Bull Case For Novavax (NVAX) Could Change Following EU Vaccine Transfer Deal With Sanofi

• On October 7, Novavax completed the transfer of its COVID-19 vaccine, Nuvaxovid, to Sanofi, granting Sanofi full commercial and regulatory responsibility for the product in the EU under a partnership that could bring Novavax up to US$450 million in milestone payments.
• This agreement with Sanofi marks a significant change in Novavax’s business model, potentially reducing operational costs while creating new sources of recurring revenue through partnership milestones.
• We’ll examine how the Sanofi partnership’s milestone payment potential could influence the evolving investment case for Novavax.

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Novavax Investment Narrative Recap

For anyone considering Novavax, the core question is whether the company can successfully transition to a partnership-focused revenue model and maintain commercial relevance as vaccine demand evolves. The recent Sanofi transfer brings some immediate revenue opportunity through milestone payments, but it does not remove the near-term dependency on external partners delivering regulatory and commercial successes. Short-term momentum could hinge on the pace and consistency of these milestone flows, while the main risk remains a slowdown or deferral of such payments that would challenge Novavax’s cash flow and earnings projections.

One recent development relevant to this pivot is the expanded collaboration with Sanofi to use Matrix-M in their pandemic influenza vaccine candidate, underscoring Novavax’s intent to monetize its platform beyond COVID-19. These partnership agreements could become key revenue levers, but dependable cash generation still relies heavily on timely regulatory and commercial achievements by both Novavax and its larger partners.

However, in contrast to the promise of partnership-driven revenue, investors should also remain mindful that if partner milestones underperform or arrive late, the impact on liquidity and growth could be...

Read the full narrative on Novavax (it's free!)

Novavax's outlook suggests revenues of $348.5 million and earnings of $55.9 million by 2028. This is based on an annual revenue decline of 31.4% and an earnings decrease of $366.9 million from current earnings of $422.8 million.

Uncover how Novavax's forecasts yield a $13.21 fair value, a 57% upside to its current price.

Exploring Other Perspectives

Eleven private investors in the Simply Wall St Community estimate Novavax’s fair value between US$2.46 and US$100, reflecting strong differences in outlook. These opinions highlight divergent expectations for milestones and partnership execution that could directly impact revenue and future prospects, explore these community perspectives for a fuller view.

Explore 11 other fair value estimates on Novavax - why the stock might be a potential multi-bagger!

Build Your Own Novavax Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Novavax research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Novavax research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Novavax's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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