My, how times have changed. Since soaring on promising Phase 1 data for its COVID-19 vaccine, NVX-CoV2373, that reaffirmed the best-in-class immunogenicity and reactogenicity profile, the waters have been choppy for Novavax (NVAX), with shares currently sitting well below its 52-week high.
That said, 5-star analyst Mayank Mamtani, of B.Riley FBR, believes the recent weakness presents investors with a unique buying opportunity.
“We argue against the prevailing bearish sentiment on NVAX potentially falling behind in the second wave of COVID-19 vaccine candidates given the Phase 3 initiation timeline in early October, which might follow a surprise pre-Phase 3 Emergency Use Authorization (EUA) of the AstraZeneca's vaccine candidate, AZD1222, and notably, around the timeline of Phase 3 efficacy readout from two mRNA candidates, Moderna's mRNA-1273 and Pfizer/BioNTech's BNT162b2,” Mamtani explained.
It should be noted that regardless of what the Phase 3 outcomes are for MRNA’s and PFE/BNTX's vaccines, which are expected in September or October, Mamtani argues NVAX stands to benefit.
According to Mamtani, premature EUA authorization of AZD1222 before large randomized clinical efficacy trials are completed goes against the FDA’s statements that this path “could reduce the ability to demonstrate effectiveness of the investigational vaccine in a clinical disease endpoint efficacy trial to support licensure and such clinical disease endpoint efficacy trials may be needed to investigate the potential for vaccine-associated ERD.”
NVAX hasn’t jumped the gun when it comes to its Phase 3 study. Rather, the company conducted two Phase 2 studies to generate sufficient “manufacturing information and demonstrate the safety and effectiveness of '2373, which the agency may consider being more appropriate to receive EAU before the FDA has completed its formal review of the BLA,” in Mamtani’s opinion.
Looking more closely at NVAX’s Phase 2 program, which is being conducted across two different studies, the B.Riley FBR analyst likes its “breadth.” He added, “Based on the robust antibody responses, as well as the promising safety and tolerability profile generated in the Phase 1 portion of the Phase 1/2 study, two dose levels...will be evaluated. This, coupled with the previously announced Phase 2 2.9k-subject South Africa study and the 130-subject Phase 1 study, will generate a total of ~4.5K safety and efficacy dataset, well above the safety database of 3k study participants required by the FDA for pre-licensure.”
With the slew of data releases set to continue, beginning with an NEJM peer-reviewed publication of NVAX's Phase 1 data and followed by immunogenicity and tolerability data in older adults in a few weeks, the deal is sealed for Mamtani. To this end, he maintains a Buy rating and $257 price target, suggesting 124% upside potential from current levels. (To watch Mamtani’s track record, click here)
Turning now to the rest of the Street, 4 Buys and 1 Sell have been published in the last three months, which add up to a Moderate Buy consensus rating. Given the $227.60 average price target, the upside potential lands at 112%. (See Novavax stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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