Despite year-to-date gains of 61%, shares of Novavax (NVAX) have retreated by 44% since the yearly highs of early February. However, according to B. Riley analyst Mayank Mamtani, the stock is well-positioned to resume its upwards curve ahead of a potential near-term catalyst.
Results from the Phase 3 PREVENT-19 study for Novavax’ Covid-19 vaccine candidate, NVX-CoV2373, are expected shortly, and positive data could pave the way for the company to submit an Emergency Use Approval (EUA) filing in Q2. This could result in “potential U.S. market entry in late 2Q/early 3Q.”
Mamtani positive outlook for NVAX’ offering is based on the recently announced “overwhelmingly positive results” from two pivotal U.S. centric studies – AstraZeneca’s AZD1222 in adult participants and PFE/BNTX’s BNT162b2 in ages 12-15 years old.
The latter showed 100% efficacy (0 vs 18) and “robust antibody responses,” which were better than those reported in an earlier study of vaccinated 16-25 years old participants.
“While we await disclosure of specific details around nAb titers and reactogenicity,” said the 5-star analyst, “We view this generally as a positive read-through for NVAX as a robust antibody response seems to be translating in high VE rates similar to that observed in the young adult group.”
Mamtani also thinks the halt to AZD1222’s vaccine trials in pediatrics, which came after the EMA (European Medicines Agency) released a cautionary statement around a potential causal link between AstraZeneca’s vaccine and rare blood clots (reported in a relatively younger adult patient group), was “taken out of an abundance of caution.”
“The total case reports (n=22) of blood brain clots remain extremely low, with benefits continuing to outweigh risks,” Mamtani noted.
The analyst believes Novavax is the “primary beneficiary of the mixed newsflow around AZD1222.”
Consumer choice will become increasingly important as more vaccines hit the market and younger adult population groups become eligible to get vaccinated too. The effect could “drive mind and market share towards ‘2373 assuming best-in-class profile maintained in upcoming data releases and commercial availability within the projected mid-year timeframe.”
To this end, Mamtani reiterated a Buy rating on NVAX and has a $365 price target for the shares. Investors could be pocketing gains of 107%, should Mamtani’s thesis play out accordingly. (To watch Mamtani’s track record, click here)
Mamtani’s positive outlook is certainly no anomaly on the Street. All 4 other recent Novavax reviews have reached the same conclusion – Buy. The stock’s Strong Buy consensus rating is backed by a bullish average price target, as well; at $323, the 12-month upside potential comes in at ~80%. (See NVAX stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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