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Novavax Has ‘Few Levers’ for Covid Vaccine, Says New Bear

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J.P. Morgan downgraded Novavax to Underweight from Neutral.

Andrew Caballero-Reynolds/AFP via Getty Images

Vaccine maker


Novavax

has a new bear. JPMorgan downgraded shares to Underweight from Neutral, citing concerns for long-term performance amid poor demand for the company’s Covid-19 vaccine.

Analyst Eric Joseph also slashed his target price on


Novavax

(ticker: NVAX) stock to $27 from $132.

The company has had a difficult year. Coming into Thursday trading, Novavax stock has cratered 82% so far in 2022. The company slashed its full-year revenue guidance back in August, and posted a disappointing second quarter. Then, earlier this week, Novavax stock, along with those of Covid-19 vaccine developers


Moderna

(MRNA) and


Pfizer

(PFE), slid after President Joe Biden said that the “pandemic is over” during an interview with 60 Minutes.

Novavax stock is down 9% in Thursday morning trading to $23.48.

“Despite the weak second-quarter print and downward revenue guidance revision for [2022], our read of the recent vaccine dynamic in the EU and U.S. would suggest further guidance cuts are in the offing, while also pointing to mid- and longer-term headwinds to meaningful Nuvaxovid uptake,” Joseph wrote in a research note. Nuvaxovid is Novavax’s Covid-19 vaccine.

As of Sept. 22, the seven-day average for daily reported coronavirus cases stood at about 59,000, about a fourth of where they stood in July, as reported in The Wall Street Journal.

Joseph wrote that, long term, the demand trend for Covid-19 vaccines is difficult to call, but “innovating to mute the impact of novel variant stains will be key to building or maintaining market share—an aspect where Novavax, while potentially capable, has struggled to keep pace. Without it, we see few levers for Nuvaxovid to penetrate beyond 5% share.”

The analyst added that “spotting relatively challenging fundamentals as the broader Covid-19 trade sentiment recedes further to the background, we see Novavax underperforming our broader coverage.”

Write to Angela Palumbo at angela.palumbo@dowjones.com

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