You can’t always get what you want, but if you try sometimes… You do get what you want?
After initially being excluded from the U.S. government’s Operation Warp Speed (OWS) program, Novavax (NVAX) joined the list of companies eligible for federal support.
On July 7, the vaccine specialist announced it will receive $1.6 billion from the federal government to support the development of its COVID-19 vaccine candidate, NVX-CoV2373.
5-star B.Riley FBR analyst Mayank Mamtani is impressed by the scale of the award itself, noting: "[T]his funding is the largest granted by OWS to date, correlating with the (1) robustness of preclinical data generated and (2) favorable readthrough from the unequivocally positive Phase 3 NanoFlu study earlier in the year. In comparison, OWS' previously granted $1.2 billion and $0.5 billion to AstraZeneca and Moderna (MRNA), respectively. Most encouraging, this enables OWS to have all platform approaches in its top 3 prioritized vaccine candidates, i.e., messenger RNA from MRNA, adenovirus viral vector approach from AZ, and protein-based approach from NVAX.”
The inclusion provides a measure of vindication for Mamtani, who had previously argued the case for Novavax’s place in the program. The analyst believes the funds will now enable Novavax to proceed with a Phase 3 trial in 3Q and to achieve its goal of producing 100 million doses by the end of the year. Should all go as planned – the company expects to enroll 30,000 participants for the fall trial – Novavax could even apply for regulatory approval before the end of 2020.
To this end, Mamtani reiterated a Buy rating on NVAX shares, along with a $106 price target. This suggests 10% upside potential from current levels. (To watch Mamtani’s track record, click here)
Among Mamtani’s colleagues, the biotech has a Moderate Buy consensus rating, based on 3 Buys and 2 Holds. Following the recent gains, the $101.20 average price target implies shares could rise by a modest 3% from current levels. (See Novavax stock analysis on TipRanks)
Overall, Novavax stock has been a Wall Street favorite in 2020, to say the least. The stock has appreciated by a barely believable 2,307% since the turn of the year.
To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.