Does AstraZeneca (AZN) still have a fighting chance in the COVID-19 vaccine race? Earlier this month, the healthcare giant paused the Phase 3 study of AZD1222, its experimental COVID-19 vaccine developed as part of a collaboration with the University of Oxford, after one of the participants developed an unexplained illness, a potential adverse effect. This effect was later described as transverse myelitis, a demyelinating condition.
Even though the UK study has resumed, the U.S. study remains on hold. Against this backdrop, AZN released the protocol for the trial, demonstrating the “rigorous” criteria of the interim analysis, in SVB Leerink analyst Andrew Berens’ opinion.
AZD1222's criteria for success is based on the FDA's Guidance for Industry regarding COVID-19 vaccine development, which asserts that an observed vaccine efficacy (VE) point estimate should be at least 50%, and that the lower bound of the confidence interval (CI) should be over 30%.
AZN’s first interim analysis (IA) will occur after 75 COVID-19 cases are reported, with statistical significance being achieved if the two-sided 99.69% confidence interval (CI) at the time is over 30%.
Looking at its peers, Moderna’s first interim analysis will occur after 53 COVID-19 cases are reported and will have a 74.1% efficacy boundary criteria to be considered a success. For the Pfizer/BioNTech SARS-COV-2 vaccine study, the first interim analysis will take place after 32 events, with an efficacy threshold of 76.9% efficacy.
On top of this, Berens points out that the protocol was amended to include an exclusion criterion of a history of demyelinating conditions. He added, “In addition, the incidence of adverse events of special interests, which includes demyelinating conditions, is part of the safety/tolerability primary endpoint, which further reflects the steps taken by the company following the two cases of this adverse event. Importantly, the Pfizer/BioNTech and Moderna’s vaccine protocols do not mention demyelinating conditions in their protocols, suggesting the finding may be circumscribed to the AZN program.”
Given all of the above, Berens commented, “Because of the trial hold and the relatively high number of COVID-19 cases needed for an interim analysis versus other protocols, we believe AZN has lost the lead and may not be the first vaccine to reach a potential emergency use authorization (EUA). Based on the protocol designs, we think that Pfizer/BioNTech BNT162b2 will take the lead and, depending on when the AZN trial restarts, Moderna’s mRNA-1273 may follow.”
That being said, Berens still believes AZN has strong long-term growth prospects. With this in mind, he rates the stock an Outperform (i.e. Buy) along with a $65 price target. Should the 5-star analyst’s thesis play out, a twelve-month gain of 17% could potentially be in the cards. (To watch Berens’ track record, click here)
All in all, other analysts echo Berens’ sentiment. 4 Buys and no Holds or Sells add up to a Strong Buy consensus rating. Given the average price target of $77.38, the upside potential comes in at 39%. (See AstraZeneca stock analysis on TipRanks)
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