In a Dec. 18 research note, analyst Michael Higgins reported that Ladenburg Thalmann has initiated coverage on the vaccine company Novavax Inc. (NVAX:NASDAQ) ahead of an expected Q1/19 release of "transformational" data, with a Buy rating and a $3 per share price target. In comparison, the biotech is currently trading at around $1.83 per share.
Higgins reviewed the company's near-term vaccine data catalysts and their potential implications, along with his firm's expectations for, and the potential market for, each product.
Novavax intends to release study results from two of its vaccine platforms: ResVax, for respiratory syncytial virus (RSV), and NanoFlu, for the flu. "We believe both will be effective," Higgins added, "leading to a biologics license applicant filing and PDUFA for ResVax in Q1/20 and Q3/20, respectively, as well as advancement to potential pivotal stage for NanoFlu in H2/19," he added.
ResVax data to come in Q1/19 will be from its most advanced component of the program, the version for infants (given via the mother), currently in Phase 3 of the PREPARE trial. "We feel confident that final efficacy could also surpass 40%," Higgins commented. Further, he said, ResVax "could become the first vaccine against RSV." The virus is the second leading cause of infant death globally and the primary cause of infant hospitalization in the United States. The potential market size worldwide, Higgins highlighted, is estimated to be about $1.5 billion, roughly $750 million of that in the U.S.
Novavax also is working on ResVax for adults ages 60 and above, which has completed Phase 2. That market offers "significant upside potential," wrote Higgins. Another version is for children between ages six months and five years, which has finished Phase 1.
As for NanoFlu, Novavax's egg-free flu vaccine, data expected in Q1/19 will be from Phase 2, in which single injections of a quadrivalent NanoFlu will be tested against two approved flu vaccines—trivalent Fluzone HD and an undisclosed quadrivalent vaccine and trivalent. "We believe [NanoFlu] could become the new standard of care," Higgins said. Ladenburg Thalmann projects 2022 revenues from NanoFlu to reach $525 million based on premium pricing and a 10–15% U.S. market share.[NLINSERT]
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Disclosures from Ladenburg Thalmann, Novavax, Inc., December 18, 2018
ANALYST CERTIFICATION: I, Michael Higgins, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report, provided, however, that:
The research analyst primarily responsible for the preparation of this research report has or will receive compensation based upon various factors, including the volume of trading at the firm in the subject security, as well as the firm’s total revenues, a portion of which is generated by investment banking activities.COMPANY SPECIFIC DISCLOSURES
Ladenburg Thalmann & Co. Inc. makes a market in Novavax, Inc.
Ladenburg Thalmann & Co. Inc. has managed or co-managed a public offering for Novavax, Inc. within the past 12 months.
Ladenburg Thalmann & Co. Inc. intends to seek compensation for investment banking and/or advisory services from Novavax, Inc. within the next 3 months.
Ladenburg Thalmann & Co. Inc received compensation for investment banking services from Novavax, Inc. within the past 12 months.
Ladenburg Thalmann & Co. Inc had an investment banking relationship with Novavax, Inc. within the last 12 months.