Novavax Analysts Say CEPI Funding 'Speaks Volumes' About Coronavirus Vaccine Development

Novavax, Inc. NVAX announced Monday after the close an award of an incremental $384 million in funding by the Coalition for Epidemic Preparedness Innovations alongside forecast-beating first-quarter results.

The Novavax Analysts

H.C. Wainwright analyst Vernon Bernardino reiterated a Buy rating on Novavax shares and increased the price target from $33 to $50.  

B Riley FBR analyst Mayank Mamtani maintained a Buy rating and hiked the price target from $29 to $43.  

Oppenheimer analyst Kevin DeGeeter maintained an Outperform rating and lifted the price target from $19 to $38.50. 

Novavax's Prior Vaccine Experience Is Underappreciated, H.C. Wainwright Says

H.C. Wainwright is focused on positive top-line results for Novavax's pivotal Phase 3 clinical trial for NanoFlu, its Matrix-M adjuvanted recombinant quadrivalent seasonal influenza vaccine candidate for adults 65 and older, Bernardino said in a Tuesday note.

The analyst is of the view that NanoFlu has a clear path to licensure.

A BLA filing for NanoFlu could occur later this year, opening up the possibility of potential commercialization in time for the start of the 2020-2021 flu season, he said. 

With the CEPI funding for Novavax's SARS-CoV-2 vaccine candidate NVX-CoV2373, Bernardino said he places significant attention on the emergent value of the coronavirus vaccine program.

"We believe CEPI's intended investment, the largest the coalition has made so far, speaks volumes as it shows CEPI has a significant level of confidence in Novavax' prior experience in creating and advancing clinical-stage vaccines for pandemic flu, Ebola, MERS-CoV, and SARS-CoV (the first CoV), which we believe is underappreciated," according to H.C. Wainwright. 

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Alternate Coronavirus Vaccine Approaches Will Expedite Availability, B Riley FBR Says

The CEPI funding announcement comes ahead of Novavax's presentation of compelling preclinical immunogenicity data at the World Vaccine Congress Wednesday, B. Riley FBR analyst Mamtani said in a Tuesday note.

The CEPI funding for Novavax, along with the $483 million in BARDA funding for Moderna Inc MRNA, supports the rationale that pursuing alternate vaccine approaches ensures a high likelihood of COVID-19 vaccine availability next year, the analyst said. 

Mamtani attributed the price target hike to expectations for the vaccine to enter the market in the second half of 2021 and utilization in high-risk elderly populations in the near-term.

The vaccine will subsequently expand to a sizable subset of the adult population globally over a multiyear period, according to B. Riley FBR. 

Novavax Among First-Tier Coronavirus Vaccine Plays, Oppenheimer Says

Following CEPI's $384-million grant, supporting scale-up of manufacturing and conduct of clinical trials, Oppenheimer introduced a revenue model for NVX-CoV2373, DeGeeter said in a Tuesday note.

"We view CEPI and BARDA as the two primary funding mechanisms for rapid development of COVID-19 vaccines and as effectively the gatekeepers for prioritizing the most promising science," the analyst said. 

With the CEPI grant, Novavax joins Moderna, Johnson & Johnson JNJ and Sanofi SA SNY in the first tier of COVID-19 vaccine companies, he said. 

The company's Matrix-M saponin-based adjuvant offers a competitive advantage, supporting rapid scale-up with smaller vaccine antigen doses and offering potential benefit in older subjects, according to Oppenheimer. 

NVAX Price Action

At last check, Novavax shares were surging higher by 78.53% at $43.74 at the time of publication Tuesday.

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