Home Finance Novavax, Inc: Unfavorable Trial Results Lead to Numerous Downgrades

Novavax, Inc: Unfavorable Trial Results Lead to Numerous Downgrades


Novavax, Inc. (NASDAQ:NVAX) stock tanked as much as 85.9% during the early trading hours today, after the company disclosed that its Resolve Phase 3 trial of RSV F Vaccine—that focuses on respiratory syncytial virus (RSV)—did not meet its primary or secondary endpoints. Following this, various sell-side firms issued negative comments, and downgraded NVAX shares.

Piper Jaffray slashed its rating on NVAX stock from Overweight to Neutral, and cut the target price from $14 to $1. After the company’s announcement, the firm removed all drug-related value from its model.

JP Morgan revised down its rating on the shares from Overweight to Neutral, and noted that post-failed trial, Novavax has few near-term events that may reverse the investors’ sentiment, and help drive outperformance. Other firms that downgraded NVAX stock include Wedbush, Ladenburg, and Citigroup.

The pharmaceutical company disclosed top-line data results from two clinical trials of its RSV F-protein recombinant nanoparticle vaccine candidate in older adults. The Resolve trial was a Phase 3 study of the vaccine, and was conducted on 11,856 adults. It missed the primary and secondary efficacy objectives, and also failed to demonstrate efficacy.

In its press release, the company mentioned that in its initial analyses and review of the trial, there was no indication of issues pertaining to execution, data integrity and collection, or product quality. This is why the company itself was surprised with the results; however, it opined that there may still be a path forward.

According to Novavax, the RSV F vaccine has the potential to churn in revenue in the $6-8 billion range each year. Nevertheless, the failed trial results caused it to lose most of its market capitalization today.

So far this year, NVAX shares have shed over 80% of their value. As of 10:27 AM EDT, they are trading down 82.13% at $1.49.


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