Biotech Novavax (NVAX) has announced that the U.S. Department of Defense (DoD) will provide up to $60 million in funding to assist with the manufacturing of NVX‑CoV2373, Novavax’s COVID-19 vaccine candidate. Shares are currently surging 15% in Friday’s pre-market trading.
The news comes after the company failed to make the cut as one of the five COVID-19 vaccine finalists selected for the Trump administration’s Operation Warp Speed project.
NVX‑CoV2373 is a vaccine candidate engineered from the genetic sequence of SARS‑CoV‑2, the virus that causes COVID-19 disease. It consists of a stable, prefusion protein antigen made using the company’s proprietary nanoparticle technology and Matrix‑M adjuvant.
According to Novavax, the funding will help support its production of several components of the vaccine that will be manufactured in the U.S.
The agreement includes a 2020 delivery of 10 million doses of NVX‑CoV2373 for DoD that could be used in Phase 2/3 clinical trials or under an Emergency Use Authorization (EUA) if approved by the U.S. FDA.
“Importantly, this award will allow Novavax to significantly expand its U.S. production capacity of NVX-CoV2373, a critical step in our ability to provide vaccine support to the COVID-19 pandemic” said Stanley C. Erck, CEO of Novavax.
Novavax will work with a U.S.-based biologics contract development manufacturing organization (CDMO) to manufacture the antigen component of NVX-CoV2373 for at least 10 million doses of vaccine.
And the company will also collaborate with U.S.-based CDMOs to scale up production and manufacture of the Matrix-M adjuvant component of the vaccine, Novavax said.
In preclinical trials, NVX‑CoV2373 demonstrated indication of antibodies that block binding of spike protein to receptors targeted by the virus, a critical aspect for effective vaccine protection. A Phase 1 clinical trial began in May 2020, with preliminary immunogenicity and safety results expected in July 2020.
The Coalition for Epidemic Preparedness Innovations (CEPI) is also investing up to $388 million of funding to advance clinical development of NVX‑CoV2373.
Year-to-date shares in NVAX have exploded by a jaw-dropping 1,022%- and analysts are bullish on the stock’s potential. Novavax scores a Strong Buy Street consensus with five back-to-back recent buy ratings. The average analyst price target stands at $49 (10% upside potential). (See Novavax stock analysis on TipRanks).
“We remain encouraged by the de-risked nature of NVAX’s vaccine candidate, on the basis of the most extensive preclinical data generated to date” commented B.Riley FBR analyst Mayank Mamtani on June 3.
The analyst reiterated a buy rating and $61 price target adding “We believe adding NVAX’s NVX-CoV2373 on the basis of its proprietary adjuvanted recombinant nanoparticle platform could further help diversify development risk as well as tap into a relatively clearer path to market and manufacturing scale-up.”
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