Shares of Inovio Pharmaceuticals' (INO) and Novavax (NVAX) were in the spotlight on Wednesday after The New York Times reported the names of the five finalists selected by the Trump administration as the most likely to produce a vaccine for COVID-19, with the list including neither company. Commenting on the omission, Cantor Fitzgerald analyst Charles Duncan has said that leaving out DNA and protein-based vaccine platform approaches is "short-sighted," and argued that Inovio’s INO-4800 and Novavax's NVX-CoV2373 "should not be disregarded as candidates."
COVID-19 VACCINE FINALISTS: Five companies have been selected by the Trump administration as the most likely to produce a vaccine for the coronavirus, The New York Times' Noah Weiland and David Sanger reported, citing senior officials. The announcement of the decision will be made at the White House in the next few weeks, government officials said. The five companies are Moderna (MRNA), AstraZeneca (AZN), Johnson & Johnson (JNJ), Merck (MRK) and Pfizer (PFE). By narrowing the field, the White House is betting it can identify the most promising vaccines at an early stage, speed along the process of determining which will work and ensure that the winner or winners can be quickly manufactured in large quantities, the publication added.
INOVIO, NOVAVAX VACCINES NOT TO BE DISREGARDED: Although "broad and narrow diversification" are present in the White House's list of five COVID-19 vaccine candidates, it leaves out two vaccine platforms - DNA and protein-based - which is "short-sighted, particularly given that these are both proven technology platforms with emerging infectious disease pathogens," Cantor Fitzgerald analyst Charles Duncan told investors in a research note. The analyst added that these two platforms have shown clinical activity in multiple trials, and candidates such as Inovio’s INO-4800 and Novavax's NVX-CoV2373 "should not be disregarded as candidates."
Duncan sees a "non-zero probability" that several will get approval eventually and that no one candidate will be the "sole winner." If the overarching goal is to provide global vaccination, there is "significant opportunity" for multiple vaccines, he contended. Two key characteristics are "scalability of the vaccine and stability when the cold chain is not robustly available," which INO-4800 and NVX-CoV2373 provide, the analyst added.
NOVAVAX SELLOFF UNWARRANTED: B. Riley FBR analyst Mayank Mamtani views Wednesday’s selloff in shares of Novavax on the New York Times report that the company was not selected as a finalist for the White House's "Operation Warp Speed" as overdone. The analyst remains encouraged by the de-risked nature of Novavax’s vaccine candidate, on the basis of the most extensive preclinical data generated to date, and now reviewed closely by the global scientific community. Further, Mamtani believes adding Novavax's NVX-CoV2373 on the basis of its proprietary adjuvanted recombinant nanoparticle platform could further help diversify development risk as well as tap into a relatively clearer path to market and manufacturing scale-up that the company has made tangible progress on recently with the Praha vaccine acquisition for the antigen component and adjuvant manufacturing collaboration announced with AGC. The analyst reiterated a Buy rating on Novavax shares.
WHAT'S NOTABLE: In a regulatory filing late on Wednesday, Inovio disclosed that it has filed a complaint in the Court of Common Pleas of Montgomery County, Pennsylvania seeking, among other requests for emergency relief, to compel VGXI, Inc. and GeneOne Life Science to facilitate the transfer of manufacturing methods, using VGXI's technology, under the parties' existing supply agreement. The technology transfer, which the company has requested as permitted under the supply agreement, will allow for the large-scale manufacture of the company's product candidate INO-4800, a new vaccine candidate against the disease, known as COVID-19, caused by the outbreak strain of the coronavirus SARS-CoV-2. The company believes that widespread availability of its potential COVID-19 vaccine, which can only be achieved through accelerated large-scale manufacture following clinical trials and regulatory approval, is essential to combat the ongoing global coronavirus pandemic.
PRICE ACTION: In Thursday morning trading, shares of Inovio are down a bit more than 1% to $12.28, while Novavax shares are down a bit less than 1% to $43.91.
