Novavax (NVAX) shareholders have had a rough 2019, to say the least, as Mr. Market chopped off more than 90% of the company’s stock price. One analyst, however, thinks this new, lower stock price could offer new investors an opportunity to get into the vaccine maker on the cheap.
This morning, B.Riley FBR’s Mayank Mamtani resumed coverage of Novovax with a Buy rating and a 12-month price target of $12. Given the stock is currently trading at $3.94, this indicates massive upside potential of nearly 200%. (To watch Mamtani’s track record, click here)
To recap; Novavax lost 70% of its value back in February, after the company reported that its respiratory syncytial virus (RSV) vaccine, ResVax, failed once more in a pivotal trial. Since then the share price has continued to bleed.
Apart from the problems with Resvax, a further question raised was whether the company had the necessary cash for a late stage trial for NanoFlu, a seasonal influenza vaccine candidate. NanoFlu is currently in a fully enrolled 28 day phase 3 trial, with endpoint readout in 1Q20.
Mamtani noted, “Despite NVAX's breadth of vaccine portfolio, our model remains primarily focused on NanoFlu program. With $75.9M in cash and equivalents, coupled with recent Catalent $18M sale ( link) aimed at cutting OpEx by 50% and access to ~$16M for ResVax's clinical development from the Bill and Melinda Gates Foundation (BMGF), we anticipate NVAX's cash runway to extend until 2H20.”
Furthermore, the analyst views the Phase 3 trial design of NanoFlu as "de-risked due to the fact that NanoFlu has already demonstrated safety and superiority over FluZone HD in its Ph. II and Ph. I/ II trials in terms of increased titer of antibodies targeting three different A(H3N2) strains and an A(H1A1) strain by 47%-64%.”
The rest of the Street sides with Mamtani's bullish take on the beleaguered vaccine player, as TipRanks analytics demonstrate NVAX as a Strong Buy. Out of 4 analysts tracked in the last 3 months, all 4 are bullish on the stock. With a blockbusting upside potential of nearly 340%, the stock's consensus price target stands tall at $17.38. (See Novavax stock analysis on TipRanks)
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