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Novavax (NVAX) to Report Q3 Earnings: What's in the Cards?

On Novavax's (NVAX) upcoming third-quarter earnings call, investor focus is likely to be on the company's progress with its COVID-19 vaccine candidate NVX-CoV2373.

This story originally appeared on Zacks

Novavax, Inc. NVAX is scheduled to report third-quarter 2021 results on Nov 4, after market close.

- Zacks

The company’s surprise record has been dismal so far as its earnings missed expectations in each of the four trailing quarters, the average negative surprise being 88.48%. In the last reported quarter, Novavax witnessed a negative earnings surprise of 26.33%.

Shares of the company have surged 33.5% so far this year against the industry’s 10.2% decline.

Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s see how things are shaping up for the quarter to be reported.

Factors to Consider

Novavax currently does not have any approved product in its portfolio. As a result, the company is yet to generate revenues from product sales.

In the last reported quarter, revenues increased significantly year over year owing to the funding from the Coalition for Epidemic Preparedness Innovations and other sources in relation to the clinical development of the company’s coronavirus vaccine candidate NVX-CoV2373, a trend that most likely continued in the to-be-reported quarter.

For the uninitiated, in June 2021, Novavax announced data from the phase III PREVENT-19 study, which evaluated NVX-CoV2373 in the United States and Mexico. The study met its primary endpoint by demonstrating an overall vaccine efficacy of 90.4%. The vaccine also provided 100% protection against moderate and severe disease, reflecting the key secondary endpoint.

The company filed a regulatory application to the World Health Organization (WHO) for the emergency use listing (EUL) of its COVID-19 vaccine across nations participating in the COVAX facility in September. The company also partnered with the Serum Institute of India (Serum), the world’s largest vaccine producer, to jointly supply 1.1 billion doses of NVX-CoV2373 to countries participating through the COVAX facility, once EUL is obtained.

Novavax and partner Serum already filed regulatory submissions for the emergency use of its COVID vaccine in India, Indonesia and the Philippines. On Nov 1, the company announced that it received approval in Indonesia for its COVID vaccine for emergency use. Novavax also completed the regulatory submissions for its COVID vaccine in Australia, Canada, the EU and the U.K.

However, it delayed the regulatory filings for its COVID vaccine multiple times across multiple nations including the United States and the EU. Per a third party report issued last month, the delay in filings was on account of the company facing core manufacturing problems in relation to its COVID-19 vaccine candidate.

The article also reported that Novavax’s method to test the COVID vaccine’s purity failed to meet the regulators’ standards and this could take a lot of time before things are set right.

In response to the article, the company issued a statement reaffirming its commitment to deliver a high-quality vaccine that meets the strict standards of production and manufacturing. It assured to submit regulatory filings in the United States by 2021 end.

We expect more updates on the regulatory filings of the COVID-19 vaccine candidate during the upcoming investors’ call.

Development and regulatory filing activities related to NVX-CoV2373 are likely to have escalated operating expenses in the to-be-reported quarter.

This apart, the company is evaluating other vaccine candidates in its pipeline. ResVax, Novavax’s potential respiratory syncytial virus (RSV) vaccine, is being evaluated in a phase III study to protect infants by immunizing their mothers against the disease.

The company also completed a phase III pivotal study on its nanoparticle seasonal influenza vaccine candidate NanoFlu for patients aged 65 years and above. The study met all the eight primary endpoints. An update on the regulatory timeline of the vaccine is expected during the upcoming earnings call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Novavax this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Novavax’s Earnings ESP is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of $4.04 per share.

Zacks Rank: Novavax currently carries a Zacks Rank #3 (Hold).

Novavax, Inc. Price and EPS Surprise

Novavax, Inc. Price and EPS Surprise

Novavax, Inc. price-eps-surprise | Novavax, Inc. Quote

Stocks to Consider

Here are a few stocks you may want to consider as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:

Exelixis, Inc. EXEL currently has an Earnings ESP of +20.00% and a Zacks Rank #1. The company is scheduled to report quarterly earnings on Nov 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Galera Therapeutics GRTX has an Earnings ESP of +42.64% and a Zacks Rank #2 at present.

Regeneron REGN has an Earnings ESP of +8.78% and a Zacks Rank of 1, presently. The company is scheduled to report quarterly earnings on Nov 4.

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