Novavax Signs Vaccine Manufacturing Deal; Analyst Bullish On Upcoming Readout

Novavax (NVAX) has announced an agreement with Fujifilm Diosynth Biotechnologies (FDB) to manufacture bulk drug substance for NVX-CoV2373, Novavax’s COVID-19 vaccine candidate.

According to the statement, FDB’s North Carolina site has already begun production of the first batch of NVX-CoV2373.  

Novavax is financing the deal through its recent $1.6 billion award by the federal government as part of Operation Warp Speed (OWS), a U.S. government program that aims to begin delivering millions of doses of a safe, effective vaccine for COVID-19 to the U.S. population.

The OWS funding is also being used by Novavax to complete late-stage clinical development, including a pivotal Phase 3 clinical trial; establish large-scale manufacturing; and deliver 100 million doses of NVX–CoV2373 beginning as early as late 2020.  

NVX-CoV2373 consists of a stable, prefusion protein made using Novavax’s nanoparticle technology and a Matrix–M adjuvant to enhance the immune response and stimulate high levels of neutralizing antibodies. 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.

The batches produced at the FDB site in North Carolina will be used in a future pivotal Phase 3 clinical trial of up to 30,000 subjects which is expected to begin in the fall of 2020 to determine the safety and efficacy of NVX-CoV2373.

Novavax’s Phase 1/2 clinical trial of NVX-CoV2373 in 130 healthy participants began in Australia in May, and Novavax will announce the Phase 1 results during the first week of August. The Phase 2 portion to assess immunity, safety, and COVID-19 disease reduction should begin shortly after.

Shares in Novavax have exploded by over 3,300% year-to-date, and as a result the average analyst price target of $117 now indicates 16% downside potential from current levels. That comes with a cautiously optimistic Moderate Buy stock consensus. (See NVAX stock analysis on TipRanks)

B Riley FBR analyst Mayank Mamtani has a buy rating on the stock and $155 price target (11% upside potential). He reiterated his bullish take on the stock on July 21 after NVAX presented incremental progress on NVX-CoV2373 at the 2nd International Society for Vaccines (ISV) Virtual Congress.

“In particular, NVAX disclosed new non-human primate (NHP) challenge data that reaffirmed our confidence in the strong immune response expected with ‘2373 to correlate with long-term disease protection and minimized risk of antibody-dependent enhanced disease (ADE) or vaccine-associated enhanced respiratory disease (VAERD)” the analyst commented.

“With Ph. I 130-subject study fully enrolled in Australia, NVAX remains on track to generate immunogenicity and safety data by end of July that would inform dose-selection for late-stage development and specifically demonstrate utility of Matrix-M adjuvant in generating cell-mediated (T cell) response” the analyst continued, noting that the efficacy of the Matrix-M adjuvant is particularly critical in the elderly population.

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Harriet Lefton
Harriet Lefton, originally from the UK, began her career as a journalist specialising in the niche world of metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer. Now she has turned her attention to the world of financial blogging, covering US stocks, analysts and all manner of things finance-related.

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