Out Fox The $treet

  Viking Therapeutics' stock plunged over 40% after misunderstood Phase 2 oral weight-loss drug data, despite results showing strong short-term efficacy versus market leaders. The Phase 2 trial demonstrated 12.2% weight loss in 13 weeks, with progressive results and potential for further improvement with longer dosing periods. Concerns over high discontinuation and GI side effects are noted, but these issues are manageable and expected to be addressed in Phase 3 studies. The market's reaction is a major overreaction; I remain ultra bullish on VKTX stock, as the investment thesis is de-risked and the pipeline is well-funded for future growth. Viking Therapeutics, Inc.  ( NASDAQ: VKTX ) plunged after the market wildly misinterpreted Phase 2 data for a key weight loss drug. The biotech continues to progress to a pivotal Phase 3 study while de-risking the strong pipeline. My  investment thesis  remains ultra Bullish on the stock, especially after Viking Therapeutics fell...

  Viking Therapeutics' hit yearly lows despite strong sector expectations, as it enters pivotal trials for obesity drugs. The biotech announced a production deal with CordenPharma, signaling confidence in FDA approval and eliminating the need for capital-intensive manufacturing facilities. The $150 million prepayment deal with CordenPharma ensures production capacity ensures production capacity for 1 billion oral tablets and billions in annual revenues. The stock only has a market cap of $3 billion after this dip, despite the potential for billions in sales and a peer trading at 12.5x sales targets. The obesity drug sector has taken a significant hit despite ongoing strong expectations for weight-loss drugs. The sector dip has left  Viking Therapeutics, Inc.  ( NASDAQ: VKTX ) at yearly lows just as the biotech enters pivotal trials for their  obesity drugs. My  investment thesis  remains ultra-Bullish on the stock following the latest dip and game-changing ...

  Novavax, Inc. secured a lucrative deal with Sanofi, receiving potentially $1.2 billion in cash and future royalties for Covid vaccines. The deal significantly improved Novavax's financial position, but the stock has already rallied from $4 to $14, limiting potential upside. Novavax's future success hinges on the royalty revenue from the Sanofi deal in 2025, with limited ability to compete with Sanofi's commercialization capabilities. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our subscriber-only portfolios.  Learn More » In a matter of months,  Novavax, Inc.  ( NASDAQ: NVAX ) went from a biotech with a questionable future to one flush with cash and a potentially huge royalty deal. Investors being too greedy and not alert were probably caught  on the wrong side of the trade. My  investment thesis  is more Neutral on the biotech due to the stock now trading at nearly $14, up from only $4. Read ...

  Novavax, Inc. reported Q3 2023 numbers above consensus estimates based almost solely on grant revenue. The company cut guidance for 2023 revenues and even pushed out a large portion of those revenues to Q1 2024 due to weak COVID vaccine demand. The stock continues to decline as the company remains disconnected from the market demand for COVID vaccines. Novavax, Inc.  ( NASDAQ: NVAX ) continues to trend lower as the biotech still sounds somewhat disjointed from the market demand for COVID vaccines. Ironically, the company announced another cost reduction plan, a sure sign of the actual direction of vaccine demand  is much lower. My  investment thesis  remains Bearish on NVAX stock, even at the multi-year lows near $6. Read the full article on Seeking Alpha.  Disclosure: Long UA. Please review the disclaimer page for more details. 

  Moderna, Inc. revenues have now slumped due to lower Covid vaccine demand, but the company ramped up aggressive spending on R&D. The company faces up to $8 per share of losses in 2024 to 2025 due to the Covid curse. The stock isn't appealing due to the squeeze of lower revenues and higher expenses. The curse of the Covid demand surge is that a vaccine company like  Moderna, Inc.  ( NASDAQ: MRNA ) is now reporting far higher revenues, but the company isn't profitable anymore. Despite a promising vaccine pipeline, sales are only expected to dip  in the years ahead. My investment thesis is Bearish on the stock due to the speculative nature of the business going forward and the curse of the biotech trying to recapture the glory from the 2021 to 2022 period. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

  Novavax, Inc. bounced on hype while the prospects from the business continued to dim with the demand for Covid vaccines. The small biotech has major doubts about the financial picture of the company considering the massive operating expense structure built up to produce Covid vaccines. Novavax stock remains a Sell due to like further dilution ahead and no logical path to profits. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More »   Following a going concern proclamation from the company,  Novavax, Inc.  ( NASDAQ: NVAX ) had bounced over 50% of the lows to over $9. The biotech faces a problematic year as demand for Covid boosters dries up and the company has a  major mismatch with their current expense structure. My  investment thesis  remains Bearish on the stock as investors await Q1 results in mid-May. Read the full article on Seeking Alpha.  Disclosure: No position men...

  Novavax has issued dire warnings to shareholders as the company continues to burn substantial amounts of cash. The small biotech continues to dilute shareholders via near-endless share issuances, and no guarantees exist that the company will have a successful 2023 vaccine update. Novavax stock is one to avoid, even after crashing below $7 on the dire warning. Anyone historically following  Novavax, Inc.  ( NASDAQ: NVAX ) could've predicted this ending for the biotech focusing on vaccines. The company has a history of promising new vaccines while constantly diluting shareholders over and over with new share issuance. The stock  soared to amazing heights on exuberance around the approved covid vaccine, but now the gig is up. My investment thesis is Bearish on Novavax, Inc. stock following statements from the company about substantial doubt of a going concern due to heavy losses and questionable covid vaccine demand. Read the full article on Seeking Alpha.  Disc...

Gilead Sciences rallied on potential COVID-19 treatment. The plan to remove stock-based compensation from non-GAAP EPS guidance provides a headwind in 2020. Due to a disappointing turnaround, the stock is a sell on any major rally based on the COVID-19 treatment. The ability of  Gilead Sciences  ( GILD ) to make a run at new highs must speak to bullishness surrounding the coronavirus because the biopharma is struggling to complete the expected turnaround. In addition, new management made the unwise decision to remove stock-based compensation from non-GAAP results going forward causing a headwind for EPS estimates. When combined with disappointing growth prospects for 2020, investors are probably lucky the stock is at yearly highs above $70 versus the yearly lows at $60. Read the full article on Seeking Alpha.  Disclosure: Long GILD. Please review the disclaimer page for more details. 

Gilead Sciences continues a recent trend with limited revenue growth in Q3. The biotech has the pipeline to generate decent growth over the next 5 years. A boost to the capital returns could yield a 4% dividend and 10% EPS growth. For years,  Gilead Sciences  ( GILD ) has been plagued by declining sales form their crucial HCV drug franchise causing a painful few years for shareholders. The stock topped $120 back in 2014 and the company finally appears poised for a sustainable turnaround, albeit a minor one. Read the full article on Seeking Alpha.  Disclosure: Long GILD. Please review the disclaimer page for more details. 

Typically, a reverse merger is a sign of a company facing troubling finances, though I'll be the first person to tell investors that this isn't always the case. Each stock in the process of a reverse merger needs the merits of its individual case reviewed by an investor. In the case of Rite Aid (RAD) and Novavax (NVAX) ,  these reverse mergers are signs that these stocks face incredibly difficult times ahead and the stocks are likely headed even lower. Rite Aid got approval by shareholders for a reverse split that needs to happen by the end of June to cure NYSE requirements for a $1 listing. At $0.57, the stock would trade at $11.40 on a 1:20 split to take place on April 22. The problem is that Rite Aid continues to face more pressure from Amazon in the pharmacy space and stronger competitors that are already struggling. At a pric...

For a stock trading at $0.63, Novavax (NVAX) sure has a lot of bullish investors. According to sentiment on StockTwits, investors are still still 85% bullish on the stock.

Before the bell, Novavax (NVAX) released results on the latest Phase 3 test for RSV for infants that failed to meet desired results. The failure follows similar results with the RSV for older results a couple of years ago. The study failed to sufficiently separate from placebo as measured by the incidence of RSV lower respiratory tract infection (LRTI) through 90 days of life, the primary endpoint. In the treatment group, the incidence of medically significant RSV LRTI was 39% (placebo incidence not provided). Other trial highlights provided in the presentation. The stock is being hammered down 67% to $0.69. Cowen slaps a $0.25 target on the stock has Novavax has again failed to get a drug approved while spending millions on drug testing. My long frustration with the company is that they constantly shift focus on vaccines without any results while burning cash left and right. The lack of partnerships for their promising vaccines has always been a telling story si...

Bausch is "selling on the news." Revenue growth slowed in the quarter. Debt payments tided up the balance sheet, albeit slightly. Would you buy the dip? the stock is on sale for ~10%. The outlook looks good . BHC said it is banking on the 7 products to drive growth: Read more (value stock play inside ) .

Novavax ( NVAX ) surged as Wainwright slapped a $6 target on the $2 stock, but guess what happened to the small biotech stock.

With Novavax (NVAX) , the company is always a few days away from issuing more stock and usually at not very opportune times. The small biotech just made such a move again. On December 31, Novavax filed to sell $100 million of shares at a 2% commission. As usual, the move made no sense with a cash balance that has to be in excess of $100 million and knowledge that the company was about to release positive Phase 2 data on NanoFlu.

Bristol-Myers Squibb (BMY) agreed to acquire Celgene (CELG) in a stock and cash deal valuing the later at a 51% premium from their closing price. So much to like with a deal that has an EPS accretion of 40% in the first year. The transaction is about 50% cash and 50% stock with a unique CVR worth up to $9 based on the 3 potential blockbuster drugs getting FDA approvals. Bristol-Myers should be up on this news, not down 10%. Disclosure: Long CELG. Please review the disclaimer page for more details. 

Synergy Pharma continues a slow ramp of Turlance prescriptions. Significant cost controls helped cut the quarterly loss my nearly $10 million. The Express Scripts deal for 2019 places the biotech on a path to a huge sales ramp by Q2'19. Synergy Pharma ( SGYP ) has made several rallies towards $2, but the biotech stock hasn't held any gains despite improving prescription numbers for Trulance that treats IBS. The business developments during the last few months sets the stock up for a sustainable rally.  Read the full article on Seeking Alpha.  Disclosure: Long SGYP. Please review the disclaimer page for more details.   

Appaloosa and Senator sent letter to company requesting corporate changes that are rearview mirror leaning. The activists are right that a more focused and nimble company is needed to achieve better results. The company already has a plan that needs focus and any disruption from activists could be a negative on the existing plan for higher EPS targets in 2019/2020. Allergan  ( AGN ) is down 50% from all-time highs back in 2015 so understandably activists are agitating for changes. The time to make those moves was a few years back while now the biopharma needs to execute on the initiatives already set forward by the CEO. Read the full article on Seeking Alpha.  Disclosure: Long AGN. Please review the disclaimer page for more details. 

Synergy Pharma management caused the current stock weakness by not accurately forecasting reduced cash burn levels. Trulance continues gaining market share and generating record prescription levels. The small biotech has a better financing position due to willingness for partnerships and licensing deals. All of these factors correlate to a stock that shouldn't trade at the lows. Synergy Pharma  ( SGYP ) reported  Q4 numbers  that deviated from guidance in a positive manner. The  investment thesis  in the stock is further enhanced that better transparency from management would've prevented the crash in the stock to new lows below $2 in the first place. Read the full article on Seeking Alpha.  Disclosure: Long SGYP. Please read the disclaimer page for more details. 

Investing in a biotech goes far beyond whether or not the company can get key drugs approved. How the company finances the cash burning trials is very crucial to long-term valuation and that is where Novavax (NVAX) is crushing shareholders.