If one of your new year resolutions was to take out a position in vaccine specialist Novavax (NVAX), then congratulations. The risk tolerant investment in a penny stock going for $3.99 a piece at the turn of year has paid off and then some. You are now looking at a stock worth $140.69, having gained 3,430% since nursing that new year hangover.
Novavax’ meteoric rise has been built on the house of COVID. The opportunity presented in finding the coveted coronavirus vaccine has placed Novavax in the rarified surroundings of “big pharma” companies.
Since setting out on the development of its COVID-19 vaccine candidate NVX-CoV2373, long time NVAX bull, B Riley FBR’s Mayank Mamtani has argued Novavax could yet spring a surprise and be the one to provide the desperately needed solution. The 5-star analyst’s case for Novavax was further bolstered on Tuesday with the release of more promising data.
In a study of cynomolgus macaques (a non-human primate), data form a viral challenge showed there is a correlation of anti-S and neutralizing antibodies with lung protection.
For Mamtani, this data reaffirmed his confidence in "the strong immune response expected with '2373 to correlate with long-term disease protection and minimized risk of antibody-dependent enhanced disease (ADE) or vaccine-associated enhanced respiratory disease (VAERD)," while further adding, “This accumulating evidence of high viral neutralizing titers conferring protection within upper respiratory track and in nasal tract suggests to us the increased likelihood of '2373 attaining sterilized immunity.”
What’s more, the NHP (non-human primate) cell-mediated immunity data indicates Novavax’ Matrix-M adjuvant increased “the absolute numbers of spike antigen specific T cells and proportion of multifunctional T cells including CD8 T cells.”
Mamtani expects the biotech to include cell-mediated data in the Phase 1 data disclosure. A Phase 1 study is currently in progress in Australia, and Novavax should release immunogenicity and safety data by the end of the month.
No change then to Mamtani’s rating, which remains a Buy. The analyst’s price target stays at $155 and implies potential upside of 16% from current levels. (To watch Mamtani’s track record, click here)
Among Mamtani’s colleagues, the verdict on Novavax is split. Among the 4 additional ratings, 2 say Buy while 2 say Hold. With Mamtani’s rating in tow, these add up to a Moderate Buy consensus rating. Overall, the analysts believe Novavax has surged enough for now, as the $117.20 average price target implies shares will decline by 12% over the next months. (See Novavax stock-price forecast on TipRanks)
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Monday July 20 offered hope that the fight against the coronavirus might be progressing to the next stage. Interim data for AZD1222, a COVID-19 vaccine candidate AstraZeneca is developing with Oxford University, showed “strong” antibody and immune T-cell responses were generated in an ongoing Phase 1/2 trial.
So, what does this mean for other biotechs in the race to develop the coveted COVID-19 vaccine – namely high flying Inovio (INO)? Shares have surged by 722% so far this year, as investors have backed the company’s COVID-19 DNA vaccine candidate, INO-4800, hoping it can deliver the much-needed solution.
But while other vaccine programs have advanced, recent data for INO-4800 left much to be desired, with the murky information failing to provide insight regarding the program’s progress. Since then, sentiment has soured, with a number of Street analysts downgrading Inovio’s rating.
However, the race is far from over and it remains to be seen whether the biotech can ultimately deliver. A Phase 1/2 trial of INO-4800 has been initiated in South Korea - the first to take place in the country - and the full data from the Phase 1 U.S. trial should be published soon.
Despite the recent criticism and lower expectations, H.C. Wainwright analyst Ram Selvaraju argues that if successful, INO-4800 can take its place among others as a viable solution.
The 5-star analyst said, “In our view, multiple vaccines could ultimately enter the market; adoption rates could depend on the strength and duration of efficacy, safety profiles, ease of production and availability, stability in storage and transport, and pricing. We note that Inovio’s DNA vaccines have the advantage of remaining stable at room temperature for more than a year and do not need to be frozen in transport or storage, which is an important factor to consider for mass immunizations.”
Nevertheless, “market valuation and volatility” prohibit Selvaraju from setting a price target for Inovio, while he keeps his Neutral rating as is. (To watch Selvaraju’s track record, click here)
Selvaraju’s take is mirrored by the Street’s appraisal. Based on 2 Buy ratings, 5 Holds and 1 Sell, Inovio has a Hold consensus rating. With an average price target of $22, the analysts expect shares to stay range-bound over the next 12 months. (See Inovio stock-price forecast on TipRanks)
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