For a stock down in the dumps trading at nearly $1, Novavax (NVAX) got an interesting price target reiteration. FBR analyst Vernon Bernardino maintained a $12 price target on the stock suggesting upside in excess of 750%. An amount in excess of 50% is virtually unheard of in the stock market so this price target is in rare air. The analyst has an interesting view that the maternal RSV vaccine is an under-recognized catalyst for the stock. The vaccine doesn't offer the same market potential as the failed Phase 3 trial in older adults, but a successful Phase 3 trial would no doubt provide confidence in the management team and the stock price. As the slide shows, the targeted US population is over 15x larger for older adults. The big crux with the stock comes down to the balance sheet. The company ended Q3 with $300 million in cash on the balance sheet, but the company used an amazing $194 million of cash in operating activities for the first 9 months of the year. Novavax implemented a 30% workforce reduction to start November that effectively reduced the cash burn by somewhere in the similar range. Assuming a reduced quarterly cash burn to $50 million in Q4 and $245 million for the year, Novavax forecasts a cash burn of $145 to $170 million in 2017. In this case, the small biotech would end 2016 with $250 million in cash and end 2017 with potentially only $80 million in cash. Clearly Novavax can easily get to 2018 with the cash on hand, but the company would face starting the year re-attempting the Phase 3 trials of Resolve with what would amount to only slightly above the cash needed for one one quarter based on the cash burn rate of $65 million per quarter for the first three quarters of 2016. The unanswered question is whether investors will pay up for the stock knowing a capital raise is likely needed to complete Phase 3 trials of Resolve that failed the first time. The Prepare trial could just provide the catalyst though I don't see Novavax getting anywhere close to $12. A focus of the Q4 results will be more detail on the cash burn levels. Stay tuned for more updates on this small biotech. Disclosure: No position