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Novavax (NVAX) to Report Q4 Earnings: What's in the Cards?

We expect investors to focus on Novavax, Inc.’s NVAX development efforts for its coronavirus vaccine candidate NVX-CoV2373 when it reports fourth-quarter and full-year 2020 earnings results on Mar 1, after market close.

The company’s surprise record has been mixed so far as its bottom line beat the Zacks Consensus Estimate in two of the trailing four quarters and lagged the same on the other two occasions, the average miss being 44.96%. In the last-reported quarter, Novavax witnessed a negative earnings surprise of 236.02%.

Shares of Novavax have skyrocketed 119.8% in the year so far compared with the industry’s 9.5% increase.

Let’s see how things have shaped up for this announcement.

Key Factors to Note

Novavax’s portfolio is currently devoid of any approved product. As a result, the company is yet to generate revenues from its 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 development of Novavax’s COVID-19 vaccine candidate, NVX-CoV2373, a trend most likely to have continued in the to-be reported quarter.

NVX-CoV2373 is currently being evaluated in a phase III study. In January 2021, the phase III study in the United Kingdom met the primary endpoint by demonstrating a vaccine efficacy of 89.3%. The study also demonstrated efficacy of the vaccine against both the rapidly emerging U.K. and South African variants of the virus.

Additionally, Novavax is conducting the phase III PREVENT-19 study which is evaluating the efficacy, safety and immunogenicity of NVX-CoV2373 in the United States and Mexico. The company has completed enrollment (30,000 volunteers) in the above study. This study is being conducted under the U.S. government’s Operation Warp Speed. Novavax has already received billions in funding for developing NVX-CoV2373. More updates on the timeline of the studies are expected during the fourth-quarter conference call.

Novavax has started rolling review of its authorization application for NVX-CoV2373 to multiple regulatory agencies worldwide, including the FDA and the European Medicines Agency.

Notably, the study and development activities related to NVX-CoV2373 are likely to have escalated operating expenses in the to-be-reported quarter.

This apart, Novavax is developing its nanoparticle seasonal influenza vaccine candidate, NanoFlu, for senior patients aged 65 years and above. The company successfully completed a phase III study on the same last year, wherein NanoFlu was found non-inferior to Sanofi’s SNY influenza vaccine Fluzone.

Novavax will file a biologics license application (“BLA”) to the FDA shortly, seeking an accelerated approval for NanoFlu. The activities related to filing a BLA might have shot up the company’s operating expenses. An update on the regulatory timeline of the vaccine is expected during the upcoming investors’ 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 -15.41% as the Zacks Consensus Estimate currently stands at a loss of $1.53 per share and the Most Accurate Estimate stands at a loss of $1.76 per share.

Zacks Rank: Novavax currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are a few stocks you may want to consider, as our model shows that these have the right combination of an earnings beat.

Acceleron Pharma, Inc. XLRN has an Earnings ESP of +4.69% and a Zacks Rank #3. The company is scheduled to report earnings on Feb 25.

Travere Therapeutics, Inc. TVTX has an Earnings ESP of +18.61% and a Zacks Rank #2. The company is scheduled to report earnings on Mar 1.

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