FBR Optimistic on Novavax, Inc. (NVAX) Following Management Meeting


FBR analyst Vernon Bernardino met with Novavax, Inc. (NASDAQ:NVAX) management last week to discuss fundamentals and future 2017 clinical development. The analyst is optimistic on the biopharmaceutical firm’s prospects, particularly its two key vaccines in development.

As such, the analyst reiterates an Outperform rating with a price target of $12, which represents an upside of 788% from where shares last closed.

From Bernardino’s standpoint, he is adamant that the best catalyst for market potential is the respiratory syncytial virus (RSV) vaccine, the firm’s only pipeline drug from Novavax currently in Phase III trials and is poised for regulatory approval in 2019.

Bernardino spoke with NVAX management and examined “the small safety study using revised RSV vaccine dosing regimens that is planned for initiation later in 1Q17 (estimated top-line data in 3Q17) as one that will confirm the vaccine’s path toward possible regulatory approval,” adding, “We think the value of the Phase III maternal RSV vaccine remains largely under-recognized for its potential to be a catalyst for the stock.”

Moreover, the analyst commends the firm’s pre-phase I Zika (ZIKV) vaccine. Considering the Zika virus has become an international public health issue, Bernardino believes Novavax may have the answer, asserting, “We think NVAX could emerge as a leading developer of a ZIKV vaccine in 2H17. Lastly, we note that NVAX’s $300 million in cash on the balance sheet at the end of 3Q16 is adequate to fund operations into 2018.” Furthermore, the vaccine may be poised for human testing as early as the second half of 2017.

Overall, “The thesis for investing in NVAX remains strong and would be buyers of the stock at current valuations, which we believe are attractive,” Bernardino concludes.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, Vernon Bernardino has a yearly average loss of 21.2% and a success rate of 20%. When recommending NVAX, Bernardino loses 34.5% in average profits on the stock.

TipRanks analytics exhibit NVAX as a Buy. Based on 3 analysts polled by TipRanks in the last 3 months, 1 is bullish on the stock and 2 remain sidelined. With an upside potential of nearly 419%, the stock’s consensus target price stands at $7.00.

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