It was a great year for Novavax (NVAX 0.25%). The biotech company is up 150% since January. However, analysts see even more upside for the vaccine maker. The consensus estimate of $20 per share represents a 65% increase from the current stock price, not too bad for a company that seemed to be on the brink of bankruptcy not long ago. Can Novavax keep up its momentum? Let’s find out if the biotech company can hit the Street’s price target within the next 12 months.

Several catalysts on the horizon

Novavax recently signed a partnership with Sanofi The company won the right to market Nuvaxovid, Novavax’s coronavirus vaccine, in most countries worldwide starting in 2025. Until then, it’s business as usual for the mid-sized biotech company. Novavax recently submitted applications to regulatory authorities in the US and Europe for an updated COVID-19 vaccine for the upcoming 2024-2025 season.

Although this market is not nearly as big as it was two years ago – and it is still dominated by Moderna And Pfizer — Novavax will still generate some revenue from this, assuming its updated candidate receives approval. In addition, Novavax is developing new vaccines. The company plans to begin Phase 3 trials for a combined coronavirus/flu vaccine and a standalone flu vaccine in the fourth quarter. Novavax expects data from these trials in mid-2025, less than a year from now.

How could these potential catalysts affect Novavax shares? The company’s approval for its updated COVID-19 flu candidate should not cause much of a shake-up in the stock price. Novavax is preparing to cede that business to Sanofi. Although Novavax will still earn royalties from the sale of Nuvaxovid, the market has already factored in much of the impact of the agreement the two companies signed. That’s why Novavax’s share price has more than doubled this year.

However, if they are successful, Novavax’s upcoming Phase 3 trials could boost its stock price. The biotech company currently has no other product on the market. These two could be hugely successful and provide the company with increasing revenue if they are approved, which is likely not until 2026 at the earliest. So within a year, Novavax could be booking royalties from sales of Sanofi’s Nuvaxovid while also preparing to submit applications to regulatory authorities for two potentially lucrative new vaccines.

If everything goes as well as the company hopes, the share price will almost certainly rise above the $20 mark.

The long-term perspective

Of course, there are significant risks associated with Novavax. It is not the first biotech company to try to develop a better flu vaccine, or even a combined flu/COVID-19 vaccine. Competition raises the bar for success in the biotech industry, as in many others. Novavax will need to do more than just produce positive results in its upcoming Phase 3 trials. It will also need to demonstrate efficacy of its candidates that at least comes close to that of other, more advanced products.

This is not a problem for a company that has many products on the market that generate stable sales and profits. But this is not the case for Novavax. Moderna’s combination vaccine recently knocked the company out of the running in a late-stage trial. Pfizer and BioNTech were also at the same level, but their candidate missed one of its two primary endpoints in a late-stage study.

The stocks of these companies didn’t plummet after these mixed Phase 3 results, but they have much larger product lines and pipelines than Novavax. If Novavax’s vaccine suffers the same fate, that would be bad news for the stock. By August of next year, more flu vaccines, including one from Pfizer and another from Moderna, could report Phase 3 results. In other words, Novavax seems like a risky company to invest in.

The company could deliver performance that would enable it to meet Street estimates within the next 12 months.

However, the stock could also lose a lot of value by next year. There are much more attractive biotech stocks to invest in.