Shares of Novavax (NVAX) are up 26% over the past week. The upwards swing a welcome respite after a month giving back to the market 50% of 2020’s gains. However, long-term investors are probably not too concerned, the vaccine specialist is still up by a stunning 2,918% in 2020.
B Riley FBR's long-time bull Mayank Mamtani expects the upward momentum to continue, as the analyst believes the latest Novavax news is another bullish indicator.
On Tuesday, Novavax announced it had inked a deal which will markedly increase the production capacity of its COVID-19 vaccine candidate, NVX-CoV2373.
The expanded agreement with the Serum Institute of India Private Limited (SIIPL) will allow Novavax to annually produce 2 billion doses of its vaccine, doubling its previous capacity. To Mamtani, the new deal provides further recognition of NVX-CoV2373’s potential.
The 5-star analyst said, “Beyond the manufacturing capacity expansion, we believe this also serves as incremental validation to '2373's best-in-class potential to have significant resources committed "at-risk" by SIIPL, the world's largest vaccine manufacturer by a number of doses... Additionally, this differentiates from the 6/4 comparable arrangement with AZ, in terms of SIIPL having skin in the game in form of owning exclusive rights to commercialize in India and non-exclusive rights to commercialize in other low to middle income (LMIC) countries.”
The latest addition will join a list of five other manufacturing partners “focused on antigen component production.” These include FUJIFILM Diosynth Biotechnologies (FDB) in both North Carolina and Texas, and in the United Kingdom, SK Bioscience in the Republic of Korea, Takeda Pharmaceutical Company in Japan, and Biofabri in Spain.
Earlier in the year, Novavax also acquired Praha Vaccines, taking over the Czech company’s 150,000 square foot manufacturing facility, in order to ramp up production of its COVID-19 vaccine candidate.
NVX-CoV2373 is currently in Phase 2 clinical studies. Within several weeks, the biotech expects to initiate the Phase 3 trials.
Overall, Mamtani rates NVAX a Buy along with a $257 price target. Investors are looking at a 114% gain, should Mamtani’s forecast materialize over the coming months. (To watch Mamtani’s track record, click here)
Most analysts agree. Based on 4 Buys and 1 Sell, NVAX has a Moderate Buy consensus rating. The average price target clocks in at $227.60 and suggests 89% of upside in the year ahead. (See Novavax stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.