Vaccine Player Vaxcyte Can Potentially Disrupt Pfizer's 20-Plus-Year Near Monopoly, Says Analyst

Mizuho Securities initiated coverage on Vaxcyte Inc PCVX, a vaccine company targeting bacterial infectious diseases (primarily for disease prevention). 

Lead asset VAX-24 is set to enter the Phase 3 stage of development in 2024 for pneumococcal disease. 

Topline data from the Phase 3 study is expected in 2025, and Phase 2 infants in late 2024/early 2025.

The Mizuho analyst writes that Pfizer Inc PFE has maintained a 20-plus-year near monopoly with its Prevnar family of pneumococcal vaccines. However, the same PCV technology has hit its limit at ~20 serotypes. 

Vaxcyte uses a next-gen PCV technology that allows it to increase the serotype coverage in the field beyond the current ~20 cap. VAX-24 and VAX-31 cover 24 and 31 serotypes, respectively. If Vaxcyte is successful, this should garner an alpha opportunity for investors. 

Mizuho initiates with a Buy rating and a price target of $69, highlighting the potential to disrupt a 20-plus-year near monopoly.

Vaxcyte's VAX-31 would cover 95% of invasive pneumococcal disease (IPD), so there is little reason for any company to extend beyond this, implying that Vaxcyte is on the highest end of serotype coverage in the field.

The analyst also notes that Vaxcyte's early pipeline may be worth considering when considering the potential longer-term story.

Price Action: PCVX shares are up 0.97% at $56.80 on the last check Thursday.