FAQ: Bank of America Downgrades Novavax to Underperform on Growth Concerns

What rating change did Bank of America make for Novavax?

Bank of America downgraded Novavax from Neutral to Underperform and reduced its price target from $9 to $7.

Why did Bank of America downgrade Novavax?

The downgrade was due to concerns about Novavax’s long-term growth prospects, including fading demand for its COVID-19 vaccine and increased regulatory requirements for new vaccine trials.

What is the main concern about Novavax’s COVID-19 vaccine?

Demand for Nuvaxovid is expected to fade as the vaccine targets the JN.1 variant while the dominant circulating strain is now NB.1.8.1, requiring new clinical studies.

How has Novavax performed operationally in recent quarters?

Novavax has executed well by slashing operating expenses by roughly two-thirds from pandemic-era highs and shoring up its balance sheet.

What regulatory challenges does Novavax face?

The FDA’s updated vaccine framework requires more rigorous and costly trials as new strains emerge, which could also complicate potential partnerships for Novavax’s experimental COVID-19/influenza combination vaccine.

What is Novavax’s pipeline focus?

The company is focusing on developing a COVID-19/influenza combination vaccine candidate.

How have Novavax shares performed recently?

Novavax shares have swung sharply this year as investors weigh the company’s retrenchment efforts against a narrowing path for growth in a post-pandemic market.

What is the significance of this downgrade for investors?

The downgrade signals that despite recent operational improvements, Bank of America believes Novavax faces limited prospects for sustainable growth due to market and regulatory challenges.