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Novavax Pops 15% On ‘Positive’ Early Trial Data From Covid-19 Candidate

support@smarteranalyst.com (Ben Mahaney)

Shares in Novavax are surging 15% in early market trading after the biotech company said that early study data of its COVID-19 vaccine candidate showed “robust” virus neutralizing antibody responses.

The stock is rising to $180.90 in Wednesday’s pre-market trading as Novavax (NVAX) said that Phase 1 data from its Phase 1/2 randomized, placebo-controlled trial of NVX‑CoV2373, its COVID‑19 vaccine candidate, showed induced neutralization titers in 100% of participants. The early stage trial, which was conducted among 131 healthy adults aged 18-59 years, demonstrated that the experimental vaccine was generally well-tolerated and had a reassuring safety profile.

“The Phase 1 data demonstrate that NVX-CoV2373 with our Matrix-M adjuvant is a well‑tolerated COVID-19 vaccine with a robust immunogenicity profile,” said Gregory M. Glenn, President of R&D at Novavax. “Using a stringent wild-type virus assay performed by investigators at the University of Maryland School of Medicine, NVX‑CoV2373 elicited neutralizing antibody titers greater than those observed in a pool of COVID‑19 patients with clinically significant disease.”

The trial was supported by funding from the Coalition for Epidemic Preparedness Innovations (CEPI) and was conducted at two sites in Australia. Novavax also submitted to a peer-reviewed journal data showing results of NVX‑CoV2373 immunization in cynomolgus macaques. The vaccine induced sterile immunity that prevented viral replication in the upper and lower respiratory tracts, thus showing potential to reduce COVID-19 transmission.

In the run-up to developing a coronavirus vaccine candidate, the stock has this year gone up almost 35 times in value. B.Riley FBR analyst Mayank Mamtani on July 31 raised the NVAX price target to $184 from $155 suggesting shares have room to advance another 17% over the coming year.

Mamtani reiterated a Buy rating on the stock, citing the potential of NVX-CoV2373 to demonstrate the “most potent immune response, as assessed primarily by neutralizing titers and memory T cell immunity”.

“This, coupled with differentiation on reactogenicity profile, particularly relative to mRNA-based approaches, supports our conviction for '2373 to become the preferred vaccine of choice in the elderly population,” Mamtani wrote in a note to investors. “Our revised PT takes into account the emerging price levels, including $40+ being negotiated as part of stockpiling arrangements  with substantial residual upside unlocked by the upcoming Phase I dataset.”

The update on Novavax's vaccine candidate prompted J.P. Morgan analyst Eric Joseph today to upgrade the stock's rating to Buy from Hold with a $275 price target (75% upside potential).

The rest of the Street is bullish on the stock. The Strong Buy analyst consensus shows 4 Buy ratings versus 1 Hold rating. Meanwhile, the $168.80 average price target indicates 7.3% upside potential from current levels. (See Novavax stock analysis on TipRanks).

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