Novavax rises as analyst sees China opportunity
Novavax rises as analyst says company may be asked to develop new avian flu vaccine
NEW YORK (AP) -- Shares of Novavax Inc. rose Friday after a Wedbush analyst said it is possible the company will be called on to develop a vaccine for a strain of avian flu that has killed six people in China over the last few days.
THE SPARK: Analyst Gregory Wade said he does not expect Novavax to be called on to create a vaccine for the virus. But the company has not been in a position to benefit from past flu outbreaks, and this time is different. He said the company could be asked to develop an emergency vaccine manufacturing campaign in a worst-case scenario.
Wade rates Novavax shares "Outperform" with a price target of $4.
Wade said the company's technology can produce vaccines in weeks, while traditional methods can take about six months. Most flu vaccines are grown inside chicken eggs.
The company's vaccines are made with genetically engineered virus-like particles. The particles resemble a virus closely enough to cause an immune system response, but they do not have the genetic material a virus needs to reproduce itself. Novavax does not have any products on the market and the company gets its revenue from government contracts.
THE BIG PICTURE: The first cases of H7N9 infections were identified Sunday. As of Friday the strain had sickened 16 people and six have died. Health officials in China say that so far they believe the virus is being spread through direct contact with infected fowl, and that there is no evidence so far that the virus is spreading easily between people.
Novavax is studying potential vaccines for avian flu, seasonal flu, and respiratory syncytial virus, which is the most common cause of lower respiratory tract illnesses in infants and young children.
SHARE ACTION: Novavax stock rose 13 cents, or 6 percent, to $2.41 in afternoon trading. The shares are up 32 percent over the last month.
