GeoVax (GOVX): Initiation with Outperform

GeoVax (GOVX): Initiation with Outperform

By Grant Zeng, CFA

We are initiating coverage of GeoVax (OTC Markets:GOVX) with an Outperform rating. Our 12-month price target is $1.5 per share.

GeoVax, Labs (GOVX) is a mid-stage biotechnology company focused on developing vaccines that prevent and fight human immunodeficiency virus (HIV), whose infections result in acquired immunodeficiency syndrome (AIDs).  


To download a free copy of the GeoVax Initiation report, click here: GOVX 1-23-13

 

The Company is developing two kinds of HIV/AIDS vaccines

• Preventive HIV/AIDS vaccines, which will be used before HIV infection and

• Therapeutic HIV/AIDS vaccines, which will be used after HIV infection to reduce need for medication  

 

One of GeoVax’s unique positions is that the Company has developed techniques to develop both preventive and therapeutic HIV vaccines. Based on this unique technology, the Company has established a pipeline with multiple candidates.

These preventive and therapeutic vaccines are currently being evaluated in clinical trials-- both in those infected with HIV and those who are not. 

The Company’s preventive HIV vaccine is among the only 5 candidates out of more than 90 vaccines entering HVTN Phase I testing chosen to progress to Phase II clinical trials. GOVX’s preventive vaccine is the only HIV vaccine for America/Europe entering efficacy trial.

 We are impressed with the data from the Company’s preventive vaccine DNA/MVA, which has completed a Phase IIa clinical trial. The vaccine is safe and has demonstrated preliminary immune response data which is better in some features when compared to Sanofi’s Alvac/gp120 vaccine.

The Company’s second generation of preventive HIV vaccine DNA-G/MVA has completed enrollment of Phase I clinical trial and data will be available in 2013. GOVX plans to initiate a Phase IIb clinical trial of this vaccine in mid-2014.

GeoVax is also testing its therapeutic HIV/AIDS vaccines in Phase I/II clinical trials. Initial data will be available in 2H2013.

Both markets for preventive and therapeutic HIV/AIDS vaccines are huge. With multiple candidates targeting both markets, GeoVax has the potential to become a key player in the two markets in our view.

Cash burn is conservative due to generous government support. Management will continue to seek non-dilutive financing for its clinical studies. Shareholder value will be created by generating new clinical data and forming potential partnerships in our view.   

 We think valuation is attractive at this time. GOVX represents a risk reward opportunity with potential for substantial positive returns. 

Summary of GeoVax’s Development Pipeline

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