Can Novavax’s Surge Continue Following Positive Data for Flu Vaccine?

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For those who assume the broader market’s excessive pendulum swings are the definition of volatility, you must have a dialog with long-term buyers of vaccine specialist Novavax (NVAX). To shortly recap the final 24 months: In 2018, the inventory gained 73%, paid it again with curiosity throughout a 90% slide in 2019, and is again to gaining once more. In contrast to most different names, to date in 2020, the small cap biotech is up by a jaw dropping 198%. Yesterday, Novavax added one other 20% to its share worth. 

So, the current surge have to be COVID-19 associated, proper? Properly, sure and no. Novavax has acquired an preliminary $four million grant from the CEPI (Coalition for Epidemic Preparedness) to organize a Part 1 medical trial of a COVID-19 vaccine, which is anticipated to start in late spring. 

Nevertheless, the rationale for the newest burst of optimism includes one other vaccine the corporate is creating. On Monday, Novavax reported constructive knowledge from a Part III trial for its experimental flu vaccine, NanoFlu. The trial met all main and secondary endpoints in adults over 65, whereas additionally exhibiting a security profile that compares nicely to Sanofi's Fluzone Quadrivalent. Novavax plans to file a BLA in 2021, with a potential launch for the drug in 2022. 

Oppenheimer’s Kevin DeGeeter applauded the event by reiterating an Outperform score on NVAX and mountaineering up the worth goal. The determine will increase from $13 to $19. Anticipate returns within the form of 61%, ought to the goal be met over the subsequent 12 months. (To observe DeGeeter’s monitor report, click here

The analyst additionally connects the dots between NanoFlu and Novavax’s improvement of a COVID-19 vaccine. DeGeeter stated, “Our forecast requires peak gross sales of $550 million as NanoFlu splits difficult-to-treat aged market with Fluzone Excessive Dose based mostly on superior efficacy in comparison with different seasonal influenza vaccines. From a strategic perspective, we see synergies between business influenza and COVID-19 vaccines for business distribution, manufacturing scale-up and securing non-dilutive financing. Particular to NVAX, Nanoflu consists of the identical Matrix-M adjuvant utilized in its COVID-19 vaccines. Securing FDA clearance and business expertise with Matrix-M might de-risk security profile for NVAX's COVID-19 vaccines.” 

4 different calls revealed by Wall Road analysts during the last three months all ship the identical verdict: Purchase. Accordingly, Novavax has a Robust Purchase consensus score. The typical worth goal is $21 and implies upside potential of a additional 73%. (See Novavax stock analysis on TipRanks)