VBI Vaccines (VBIV) is an almost-$1 billion company with less than $2 million in annual sales. It also might be the creator of the best vaccine of all for preventing coronavirus. At least, that's what investment firm Raymond James thinks.
On Wednesday, 5-star Raymond James analyst Steven Seedhouse upgraded VBI Vaccines stock to "strong buy" on the strength of the company's enveloped virus-like particle (eVLP) vaccine against COVID-19, saying it "might" be "the best" COVID vaccine out there -- and sparking a 32% price rally in VBI's stock Thursday.
As Seedhouse explains, when you're gauging the effectiveness of a vaccine, it's essential to focus on the production of neutralizing antibodies (NAb), which are "the only reliable correlate of protection in primate SARS-CoV-2 challenge experiments." Which is to say, higher NAb numbers translate directly into both "greater vaccine effectiveness" and "potentially greater durability of protection" over time.
In that regard, Seedhouse notes that VBI's vaccine produces "an order of magnitude greater" number of NAb versus recombinant pre-fusion spike protein-based vaccines, a difference that the analyst calls "striking." More than that, Seedhouse hypothesizes that as VBI experiments with "adjuvant optimization" (i.e. using alternative molecules, compounds, or macromolecular complexes to boost the effectiveness of a vaccine), it's possible that the company's vaccine could end up being either: (a) "2 orders of magnitude more potent at driving NAb titers than leading vaccines" from Moderna, Pfizer, or AstraZeneca (i.e. 100x more effective at producing neutralizing antibodies) or (b) strong enough that a single dose of the vaccine could prove more effective than two doses of one of the alternatives, administered weeks apart.
Seedhouse even notes that VBI is working on a trivalent vaccine that might protect patients from both the novel coronavirus SARS-CoV-2 and the original SARS coronavirus and the MERS coronavirus as well!
Now, before we get too excited, a few caveats may be in order. First and foremost, VBI's vaccine is a long way away from undergoing Phase 3 clinical trials. In fact, so far it's apparently only been tested on rats -- although Phase 1/2 clinical trials may begin before 2020 is over. And while Seedhouse titles his report "Warp Speed Take Note, This Might Be the Best COVID Vaccine," the analyst later concedes that the government's Operation Warp Speed hasn't actually taken note just yet, although he hopes that VBI will soon be "getting a serious look from OWS at this point given the data."
Overall, Seedhouse is enthused about VBI's prospects, and says the stock could be worth $9, if everything goes as planned. (To watch Seedhouse's track record, click here)
It’s not often that the analysts all agree on a stock, so when it does happen, take note. VBIV’s Strong Buy consensus rating is based on a unanimous 4 Buys. The stock’s $6.75 average price target suggests a 59% upside from the current share price of $4.25. (See VBIV stock analysis on TipRanks)
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