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What's in Store for Novavax (NVAX) This Earnings Season?

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In the absence of any marketed product, we expect investors’ focus to be on the progress of Novavax, Inc. (NVAX - Free Report) pipeline candidates when the company reports second-quarter 2020 results. In the last reported quarter, the company delivered a positive earnings surprise of 13.43%.

Notably, Novavax’s earnings history is mixed. This biotech company beat estimates in one of the last four quarters while missing the same thrice, with the average surprise being 0.71%.

Shares of Novavax have skyrocketed 3265% so far this year compared with the industry’s increase of 5.3%.

 

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

Factors to Note

On the second-quarter earnings call, investors focus will likely remain on the progress of Novavax’s pipeline candidate, especially coronavirus vaccine.

The company has been actively engaged in developing its coronavirus vaccine — NVX-CoV2373. The company initiated a phase I/II study on the candidate in May. Preliminary immunogenicity and safety results from the Phase 1 portion of the trial are expected in July 2020. We expect the study to have increased research and development expenses for the company. The company has received commitment for funding from the U.S. Department of Defense, the Coalition for Epidemic Preparedness Innovations and the U.S. Federal government.

The company has been expanding its global manufacturing capacities through collaborations with or acquisition of companies, providingcontract development and manufacturing services to manufacture NVX-CoV2373. These deals will support large-scale supply of the vaccine candidate following its potential approval against COVID-19. We expect the company to provide an update on the timeline related to development of its coronavirus vaccine on its second-quarter earnings call.

Novavax successfully completed a phase III study on its lead vaccine candidate, NanoFlu, evaluating it for seasonal influenza in March. The candidate was non-inferior to Sanofi’s (SNY - Free Report) influenza vaccine, Fluzone. The company plans to file a biologics license application (“BLA”) to the FDA seeking accelerated approval for NanoFlu, soon. The activities related to filing of a BLA have likely driven operating expenses higher. However, decreased development activities related to its respiratory syncytial virus vaccine, ResVax, may have offered some respite.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Novavax in this reporting cycle. 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. But 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 36 cents 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 That Warrant a Look

Here are two biotech stocks you may want to consider, as our model shows that these also have the right combination of elements to deliver an earnings beat in their upcoming release.

Incyte Corporation (INCY - Free Report) has an Earnings ESP of +4.62% and a Zacks Rank #3.

Arena Pharmaceuticals, Inc. has an Earnings ESP of +12.88% and a Zacks Rank #3.

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