TD Cowen analysts downgraded Novavax (NASDAQ:NVAX) stock to Market Perform from Outperform, citing “significant uncertainties about the pending Gavi arbitration & commercial outlook for the COVID-19 vaccine franchise.”

They also slashed the price target from $55 per share to $10, which implies an upside potential of over 10% relative to yesterday’s closing price.

“Pending arbitration from Gavi puts up to $700M from Novavax’s balance sheet (which includes $1.3B in cash as of YE:22) at risk. Thus, we believe better visibility on the outlook for this litigation is needed as is clarity on the degree to which Novavax can penetrate the commercial COVID-19 vaccine market and fund further development of future boosters,” the analysts said in a note.

“We remain constructive on NVAX’s differentiated adjuvant but expect minimal penetration into the FY23 COVID market may limit the transition into a major commercial competitor & puts funding for the deeper pipeline at risk.”

Novavax shares are down 4% in premarket Thursday.