After Phase 3 Novavax Trial Misses Endpoints, Piper Downgrades Despite Remaining Vaccine Efforts

Shares of Novavax, Inc. NVAX tumbled more than 83 percent on Friday trading after the company reported disappointing results from two Phase 3 vaccine trials that had previously done well in the Phase 2 trial.

According to the company, data from the Resolve Phase 3 trial for its vaccine for a potentially deadly respiratory virus didn't meet the efficacy objectives it had set.

Sadly, a few more patients using Novavax’s RSV F-protein recombinant nanoparticle vaccine candidate (RSV F Vaccine) displayed symptoms related to respiratory syncytial virus than those on the placebo. This is particularly bad news for those suffering from the respiratory syncytial virus, as there are no approved vaccines to this condition, which kills roughly 14,000 American of 65 years old or more every year.

Related Link: Wedbush Answers "So, Now What?" For Novavax Shareholders

Following such a negative surprise, Piper Jaffray analysts Edward A. Tenthoff and Jordyn P. Fantuzzi decided to downgrade their rating on Novavax’s stock from Overweight to Neutral. The experts also trimmed their price target from $14.00 to $1.00, to account for the removal of all value for the RSV vaccine from the firm’s model.

However, the analysts added, Novavax will go on with other RSV vaccine efforts. In fact, the company is still enrolling the Phase III PREPARE trial with an $89 million grant from the Gates Foundation. In addition, Novavax is “developing a nanoparticle influenza + RSV combo vaccine. The multi-valent combo vaccine could offer a product line extension of the company's industry leading RSV vaccine as competition comes to market. Novavax expects to begin Phase I/II studies in 2017,” the note went on.

Finally, Tenthoff and Fantuzzi pointed out a few other vaccines that the company is developing. These include a preclinical Zika vaccine and a new nanoparticle pandemic and seasonal flu vaccine.

Full ratings data available on Benzinga Pro.

Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.