Shares of Novavax (NVAX) are on the rise on Wednesday after the company announced data from its Phase 1/2 randomized, observer-blinded, placebo-controlled trial of its COVID-19 vaccine with and without Matrix-M adjuvant in healthy adults 18-59 years of age. Following the news, JPMorgan analyst Eric Joseph upgraded the stock to Overweight as he was "pleasantly impressed" with the initial immunogenicity/safety profile for NVX-CoV2373, while his peer at Ladenburg Thalmann downgraded the shares to Sell, arguing that Novavax is one of the last companies in "Operation Warp Speed" to present its initial data and its current valuation overestimates the revenue and net profit opportunity.
DATA FOR COVID VACCINE CANDIDATE: Novavax has announced Phase 1 data from its Phase 1/2 randomized, observer-blinded, placebo-controlled trial of its COVID-19 vaccine with and without Matrix-M adjuvant in healthy adults 18-59 years of age. NVX-CoV2373, the company's recombinant COVID-19 vaccine candidate adjuvanted with Matrix-M, was generally well-tolerated and elicited robust antibody responses numerically superior to that seen in human convalescent sera. The data has been submitted for peer-review to a scientific journal and to an online preprint server.
'PLEASANTLY IMPRESSED' WITH DATA: JPMorgan analyst Eric Joseph upgraded Novavax to Overweight from Neutral with a price target of $275, up from $105. The analyst said HE is "pleasantly impressed" by Tuesday’s initial immunogenicity/safety profile for NVX-CoV2373 in the Phase 1 COVID-19 vaccine results. It is "not too far a stretch" to conclude the activity of NVX-CoV2373 "looks best-in-class," particularly when anchored to one of the more "stringent" human convalescent sera cohorts reported to date, Joseph told investors in a research note. On safety, the analyst views the tolerability profile of both doses "as comfortably within the bounds of licensure-eligible candidate." He believes "relative valuations" favor Novavax over the near-term ahead of the first of the competitor Phase 3 COVID-19 vaccine efficacy readouts.
Calling the immunogenicity and safety results “strong,” B. Riley FBR analyst Mayank Mamtani raised his price target on Novavax to $257 from $184 and reiterated a Buy rating on the shares. The analyst anticipates the strength of the data to be reflected in stock "over an extended period of time."
Meanwhile, Cantor Fitzgerald analyst Charles Duncan also increased his firm's price target on Novavax to $211 from $148 and reiterated an Overweight rating on the shares. The increase reflects "enhanced conviction" from "robust" initial Phase 1 data for the company's SARS-CoV-2 candidate, NVX-CoV2373, Duncan told investors in a research note of his own. The analyst thinks the data will facilitate a move into Phase 2/3 studies, and a "more-than-viable" potentially "class-leading" clinical profile. The key data are the "robust" antibody responses against the spike protein that were Matrix-M dependent, neutralizing antibody titers, polyfunctional CD4+ T cell responses with a predominant Th1 phenotype, and an "acceptable" safety profile, Duncan contended.
SELL NOVAVAX: Not as bullish on the name, Ladenburg Thalmann analyst Michael Higgins downgraded Novavax to Sell from Neutral with a $105 price target after the company presented Phase 1 data for its COVID-19 vaccine NVX-CoV2373. The analyst acknowledged that the vaccine induced "robust" immune responses against the spike protein that exceeded convalescent sera levels from patients infected with or recovering from COVID-19 infection. However, the analyst noted that Novavax is one of the last companies in "Operation Warp Speed" to present its initial data and its current valuation overestimates the revenue and net profit opportunity.
WHAT'S NOTABLE: Johnson & Johnson (JNJ) has announced that its Janssen Pharmaceutical unit has entered into an agreement with the U.S. government for the large scale domestic manufacturing and delivery in the U.S. of 100M doses of Janssen's SARS-CoV-2 investigational vaccine, Ad26.COV2.S, for use in the U.S. following approval or Emergency Use Authorization by the Food and Drug Administration. The Biomedical Advanced Research and Development Authority, part of the U.S. Department of Health and Human Services' Office of the Assistant Secretary for Preparedness and Response, in collaboration with the U.S. Department of Defense, is committing over $1B for this agreement. The vaccine will be provided at a global not-for-profit basis for emergency pandemic use.
The U.S. government may also purchase an additional 200 million doses of Ad26.COV2.S under a subsequent agreement. The company is evaluating one- and two-dose regimens, in its clinical program and working diligently to ensure broad, global access to the vaccine following approval or authorization by regulators. Johnson & Johnson aims to meet its goal to supply more than one billion doses globally through the course of 2021, provided the vaccine is safe and effective.
Meanwhile, Pfizer Canada (PFE) and BioNTech (BNTX) also announced an agreement with the Government of Canada to supply their BNT162 mRNA-based vaccine candidate against SARS-CoV-2, subject to clinical success and Health Canada approval. As requested by the Government of Canada, deliveries of the vaccine candidate are planned for over the course of 2021. The BNT162 program is based on BioNTech's proprietary mRNA technology and supported by Pfizer's global vaccine development and manufacturing capabilities. The vaccine development program is evaluating at least four experimental vaccine candidates, each of which represents a unique combination of messenger RNA format and target antigen.
Recently, two of the companies' four investigational vaccine candidates - BNT162b1 and BNT162b2 - received Fast Track designation from the FDA. This designation was granted based on preliminary data from Phase 1/2 studies that are currently ongoing in the United States and Germany as well as animal immunogenicity studies. On July 27, Pfizer and BioNTech announced that following extensive review of preclinical and clinical data from Phase 1/2 clinical trials, and in consultation with the FDA's Center for Biologics Evaluation and Research and other global regulators, the companies selected the BNT162b2 vaccine candidate to move forward into a Phase 2/3 study. Assuming clinical success, Pfizer and BioNTech are on track to seek regulatory review for BNT162b2 as early as October 2020 and, if regulatory authorization or approval is obtained, plan to supply up to 100M doses worldwide by the end of 2020 and approximately 1.3B doses by the end of 2021.
PRICE ACTION: In morning trading, shares of Novavax have gained about 10% to $172.85. On the flip side, Moderna (MRNA), another peer developing a COVID vaccine that just reported on its earnings, has dropped 4.5% to $74.96.
"Street Fight" is The Fly's recurring series of exclusive stories that highlight a stock or sector that is in focus amid divergent views from Wall Street analysts.
