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Novavax’s COVID Vaccine Candidate Left off White House List; 5-Star Analyst Explains the Implications
The Trump administration picked out five companies it believes are most likely to produce 2020’s holy grail – a vaccine for the coronavirus. Unfortunately, Novavax (NVAX) was not on the list.
Although the White House didn’t disclose what lay behind the choices, 5-star B.Riley FBR analyst Mayank Mamtani provided some possible explanations.
3 of the choices already have clinical studies in various degrees of progress (Moderna, AstraZeneca/Oxford University and Pfizer/BioNTech), whilst Novavax only began enrollment late last month. This implies to Mamtani that “speed to market entry” could be a major factor in the decision-making process.
Whilst “risk diversification and cost sharing,” and a preference for large companies (Johnson & Johnson, Merck) with the necessary balance sheet required to conduct the extensive and pricey vaccine development and manufacturing may also be contributing factors.
Even so, while those reasonings might explain the smaller player’s omission, Mamtani maintains Novavax should be added to the list.
Mamtani said, “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, and now reviewed closely by the global scientific community residing with CEPI, WHO, and SII, as well as U.S. agencies such as CDC, NIH-NIAID, and BARDA. 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 that NVAX has made tangible progress on recently…”
To this end, Mamtani reiterated a Buy on NVAX and has a $74 price target, indicating the potential for 60% upside over the next year. (To watch Mamtani’s track record, click here)
All other 4 analysts to post a Novavax review over the last 3 months recommend the stock a Buy, too. A Strong Buy consensus rating is accompanied by a $49.20 price target, implying room for an 11% uptick in the months ahead. (See Novavax stock analysis on TipRanks)
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