Is COVID-19 Vaccine Maker Novavax a Buy Right Now? Analyst Weighs In

And just like that, Novavax (NVAX) is back in the spotlight. Gaining a whopping 328% since the start of 2020, the healthcare company has consistently attracted attention from market watchers, primarily thanks to its efforts to develop a vaccine against COVID-19. The latest reason for its appearance on Wall Street’s radar? Its vaccine development program’s giant leap forward.

On April 8, the company announced that it had identified a lead COVID-19 vaccine candidate. The experimental vaccine, NVX-CoV2373, is a prefusion protein created using NVAX’s patented lipid nanoparticle platform, with a Phase 1 first-in-human study set to begin in mid-May. As a result of this rapid timeline, NVAX could release early safety and immunogenicity data as soon as July based on the expected 35-day trial schedule.

It should be noted that according to preclinical data, NVX-CoV2373 was able to produce high titer neutralizing antibodies against SARS-CoV-2 virus after a single immunization, with the result being eight times higher following the second dose. This is significant because the result demonstrates the vaccine could offer significant immune protection in humans.

B.Riley FBR analyst Mayank Mamtani highlights the fact that “NVAX’s proprietary Matrix-M adjuvant is incorporated within NVX-CoV2373, along with full-length recombinant spike protein to further enhance immune responses in the Phase 1 placebo-controlled observer blinded study of ~130 healthy adults to assess safety and efficacy, dosage response, and number of vaccinations.”

Expounding on the candidate’s potential, Mamtani wrote in a recent research note to clients, “We believe this to represent incremental validation for NVAX’s underappreciated recombinant nanoparticle vaccine platform and the ability to rapidly evaluate and advance a candidate to the clinic. With a strong balance sheet, i.e, $230 million in cash equivalents, and positive Ph. III NanoFlu data already reported in 4,000-plus patients, we believe NVAX to be well positioned to execute on a number of upcoming 2020 milestones including (1) reporting data on key secondary endpoints, microneutralization (MN) and cell-mediated immune (CMI) responses, ahead of a BLA filing for NanoFlu, and (2) Ph. I NVX-CoV2373 proof-of-concept data.”

As NVAX already revealed it has a standing agreement with Emergent BioSolutions to utilize Emergent’s rapid manufacturing and deployment capabilities to advance its vaccine products as well as a $4 million grant from the Coalition for Epidemic Preparedness Innovations (CEPI), Mamtani tells investors his bullish thesis remains firmly intact.

To this end, he reiterated a Buy rating and $20 price target. This implies shares could surge 15% in the next year. (To watch Mamtani’s track record, click here)

What does the rest of the Street have to say? Out of 5 reviews published recently, 100% were bullish, making the consensus rating a Strong Buy. At $22.80, the average price target is more aggressive than Mamtani’s and puts the upside potential at 31%. (See Novavax stock analysis on TipRanks)


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