Ladenburg Thalmann upgraded Novavax (NASDAQ:NVAX) to “buy” from “neutral” with a new price target of $1.60 after the company presented encouraging preclinical data from its nanoparticle influenza vaccine, NanoFlu, and outlined a clinical development strategy targeting older adults. The stock closed at 97 cents on Aug. 8.
“While the data is still early, in our view, NanoFlu has demonstrated potential to be the potent vaccine for prevention of seasonal influenza,” writes analyst Kevin DeGeeter.
“If this product profile is borne out in clinical trials, we believe NanoFlu is well positioned to command a premium price for dosing in elderly or other immune compromised populations,” he added.
Mr. DeGeeter also said the nanoparticle construct may be compatible for dosing in combination with the company's RSV nanoparticle program, which is in Phase 2 development for the elderly and Phase 3 studies as a maternal vaccination to protect newborns, which could add additional commercial upside. An update on the Phase 3 maternal RSV program is expected in the second half of 2018.
In addition, the company pointed to a 10-fold increase in yields and 95% purity from the manufacturing process, which should allow Novavax to produce the product at lower COGs than many other influenza vaccines and potentially offer therapeutic-like gross margins, he added.