Novavax, Inc. (NASDAQ:NVAX) provided a corporate update and announced its financial results for the fourth quarter and twelve months ended December 31, 2017.
“During this last quarter we collected our most significant results to date from our two lead vaccine programs,” said Stanley C. Erck, President and CEO, Novavax, Inc. “This progress gives us enhanced focus and momentum to execute under these programs for the remainder of 2018 and beyond.”
NanoFlu Program Update:
In late February 2018, the Company announced positive top-line results from its Phase 1/2 clinical trial in 330 older adults of its NanoFlu recombinant influenza vaccine, which includes its proprietary Matrix-M(TM) adjuvant, compared to the leading licensed egg-based, high-dose influenza vaccine for older adults (IIV3-HD). Key findings from the trial show that Novavax` trivalent NanoFlu vaccine induced significantly higher hemagglutination inhibition (HAI) antibody responses against homologous A-type strains as well as against historic and forward-drifted H3N2 strains. Based on the strength of these trial results, the Company submitted a related manuscript to a peer-reviewed medical journal and is planning to present the data at the World Vaccine Congress meeting on April 4, 2018.
“This influenza season in the Northern Hemisphere has resulted in a serious public health epidemic, largely because of the H3N2 flu strain and the inability of current vaccines to provide adequate protection, particularly to older adults and other vulnerable populations,” said Gregory M. Glenn, M.D., President of Research and Development. “Our NanoFlu vaccine`s head-to-head performance against IIV3-HD demonstrated that it has the potential to address two primary confounding factors related to poor vaccine efficacy: virus drift and vaccine mutation resulting from egg-based manufacturing. With these findings, we are able to initiate manufacturing and clinical operations activities to support our next step, a Phase 2 trial of a quadrivalent formulation of our NanoFlu vaccine, scheduled to begin in the third quarter of this year.”
RSV F Vaccine Maternal Immunization Program Update:
In December 2017, the Company completed a successful informational analysis of the Phase 3 Prepare(TM) clinical trial of its RSV F Vaccine for infants via maternal immunization. The analysis of data from 1,307 infants in the per-protocol population indicate an observed vaccine efficacy in the range of between 45% and 100%. The Company anticipates that it will reach approximately 4,600 participants, including approximately 3,000 actively vaccinated mothers, in the second quarter of 2018, which will enable an interim efficacy analysis with results reported in early 2019. This program continues to be funded under an $89 million grant from the Bill and Melinda Gates Foundation (BMGF), and has been granted Fast Track designation by the U.S. Food and Drug Administration (FDA).
“The results of our informational analysis this December significantly increased the likelihood of success of our RSV F Vaccine program for infants via maternal immunization,” added Mr. Erck. “With over 4,000 current participants, we are very close to triggering the interim efficacy analysis, the positive results of which would form the basis of our Biologics License Application filing with the FDA. Providing protection to newborns from respiratory syncytial virus, one of the most prevalent and damaging diseases to which they are exposed during their first months of life, has important global public health implications.”
Financial Results for the Three and Twelve Months Ended December 31, 2017
Novavax reported a net loss of $50.8 million, or $0.16 per share, for the fourth quarter of 2017, compared to a net loss of $57.1 million, or $0.21 per share, for the fourth quarter of 2016. For the twelve months ended December 31, 2017, the net loss was $183.8 million, or $0.63 per share, compared to a net loss of $280.0 million, or $1.03 per share, for the same period in 2016.
Novavax revenue in the fourth quarter of 2017 was $10.4 million, compared to $5.4 million in the same period in 2016. This 93% increase was driven by higher revenue recorded under the BMGF grant of $89 million.
Research and development expenses decreased 3% to $49.7 million in the fourth quarter of 2017, compared to $51.1 million for the same period in 2016. The decrease was primarily due to reduced development activities of our RSV F Vaccine for older adults, partially offset by increased developemtnt activities of our RSV F Vaccine for infants via maternal immunization.
Interest income (expense), net for the fourth quarter of 2017 and 2016 was ($3.1) million.
As of December 31, 2017, the company had $157.3 million in cash, cash equivalents and marketable securities, compared to $235.5 million as of December 31, 2016. Net cash used in operating activities for the full year 2017 was $138.7 million, compared to $255.5 million for same period in 2016. The decrease in cash usage was primarily due to decreased costs relating to our RSV F Vaccine and lower overall employee-related costs.
Shares of Novavax closed today at $2.09, down $0.06 or -2.79%. NVAX has a 1-year high of $2.75 and a 1-year low of $0.73. The stock’s 50-day moving average is $2.13 and its 200-day moving average is $1.48.
On the ratings front, Novavax stock has been the subject of a number of recent research reports. In a report issued on March 1, Piper Jaffray analyst Edward Tenthoff maintained a Hold rating on NVAX, with a price target of $2.50, which implies an upside of 16% from current levels. Separately, on the same day, B.Riley FBR’s George Zavoico reiterated a Buy rating on the stock and has a price target of $10.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Edward Tenthoff and George Zavoico have a yearly average return of 15.7% and 2.5% respectively. Tenthoff has a success rate of 49% and is ranked #337 out of 4787 analysts, while Zavoico has a success rate of 41% and is ranked #2409.
Overall, 3 research analysts have assigned a Hold rating and 3 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $4.30 which is 100% above where the stock opened today.