FBR: Novavax Looks Healthy Ahead Of Catalysts

As Novavax, Inc. NVAX approaches two key dates in its pipeline, bulls are preparing to profit.

The Rating

B Riley FBR analysts George Zavoico and Dylan Dupuis maintained a Buy rating on Novavax with a $10 price target.

The Thesis

The biotech will complete two clinical trials in the first quarter that could prove “transformative," the analysts said in a Monday note. 

The Phase 3 trial of ResVax, a respiratory syncytial virus F protein vaccine, will decide the candidate’s future. A reproduction of positive results would enable targeted submission of the BLA and MAA by the first quarter of 2020, according to B. Riley FBR. 

Meanwhile, a successful Phase 2 immunogenicity trial for Novavax’s NanoFlu would allow for a pivotal Phase 3 trial launch in the second half of 2019, Zavoico and Dupuis said. 

“With the possibility of having the first effective RSV vaccine and a superior seasonal flu vaccine on the market by 2020 and 2021 (as we forecast), Novavax could emerge as a major player in the vaccine market, or it could be acquired at a premium by any of the other major pharmaceutical companies that manufacture and market vaccines." 

NanoFlu stands to penetrate a $5-billion flu vaccine market, while ResVax targets a $2.4-billion opportunity in RSV, the analyst said. 

In the interim, though, B Riley anticipates $184.8 million cash burn over the next four quarters.

“We expect Novavax to raise cash opportunistically, if and when positive results are announced, or by establishing commercial partnerships in territories outside of the U.S.,” the analysts said, citing sufficient cash to reach the second quarter of 2019.

Price Action

Novavax shares were up 3.38 percent at $2.14 at the time of publication Monday. 

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