Novavax: What’s Behind The Latest Movement?
Novavax shares had a big bounce up during the morning of Jan. 10.
The move was sparked by an aggressive analyst upgrade based on a successful interim analysis of the ongoing RSV F vaccine Phase 3 trial.
The informational analysis partially de-risks the pivotal vaccine trial.
Full interim results from the maternal RSV vaccine trial will not be available until Q4 2018/Q1 2019; that marks a push back from December when the timeline had called for mid-2018.
NVAX has helped allay some worries, but de-risking has not changed the fact that it is still high-risk.
Novavax’s (NVAX) share price is no stranger to wild rides up and down. After pushing back a promised data reading from the first human trials its NanoFlu flu vaccine in December, NVAX shares took a nasty tumble, before recovering somewhat. On January 10th, the market ran in the opposite direction: Shares shot up 38% to $1.84 during morning trading.
The proximate cause of the recent jump was an eye-popping upgrade by B. Riley/FBR, a investment banking subsidiary of B. Riley Financial (RILY). The investment bank raised its price target from $2.25 to $10. Clearly B. Riley likes the progress NVAX has been making on its pivotal vaccine trials, especially its maternal RSV F vaccine, which is in the midst of a pivotal Phase 3 clinical trial.
Let’s take a look at what prompted the upgrade and what it means for NVAX going forward.
Informational Analysis Boosts Confidence
The principal stated reasoning behind B. Riley’s big upgrade is its increased confidence in success of NVAX’s maternal RSV vaccine trial. The failure of a Phase 3 trial in the older adult population has resulted in serious skepticism about the prospects of the maternal vaccine trial. The result of another failure would be catastrophic for NVAX, so wariness, especially after past failures, is entirely understandable. The company has promised an interim data reading in 2018, and worries have persisted about what they will show.
NVAX was able to deliver some good news this week when it presented at the JP Morgan Annual Healthcare Conference. In its presentation, the company shared the findings of an informational analysis conducted in December by a statistician from an independent Data Safety Monitoring Board. The data was un-blinded for the statistician in order to “ensure that the ongoing investment in the program was justified based on a high probability of a commercially-viable determination of efficacy.” The statistician confirmed that, based on data from 1,307 enrollees, the maternal RSV vaccine successfully met the terms of the study’s primary endpoint, namely efficacy greater than 40%.