Novavax Analyst Turns Uber-Bullish, Raises Price Target To $10

Analysts at B. Riley FBR initiated coverage of Novavax, Inc. (NASDAQ: NVAX) on Jan. 5 with a Buy rating and $2.25 price target. Just five days later, the firm turned uber-bullish on the stock.

The Analyst

George Zavoico maintains a Buy rating on Novavax's stock with a 12-month price target boosted from $2.25 to $10.

The Thesis

Novavax offered investor an update about the FDA's informational analysis of its ongoing Phase 3 trial exploring its RSV F vaccine for maternal immunization to protect newborn infants in an investor presentation (initially made in an 8-k filing Jan. 8), Zavoico said in a note.

"We learned that the objective of the informational analysis allowed by the FDA was to determine if the trial vaccine efficacy was greater than 45%, a threshold that we think would translate into a successful Phase III trial and a commercially viable vaccine," Zavoico said.

"The trial results to date were unblinded by an independent data safety monitoring board (DSMB). The results showed that the incidence of serious lower respiratory tract infections (LRTIs) due to an RSV infection in newborn infants whose mothers were immunized was at least 45% lower than in infants born by mothers who were not infected, a statistically significant difference."

Novavax will continue enrolling subjects prior to a formal interim analysis after 3,000 infants are born by the first quarter of 2019 or sooner, the analyst said. The 3,000 threshold would satisfy the FDA's requirement and at that time, the actual vaccine efficacy (somewhere between 45 percent and 100 percent) will be determined at that time.

Price Action

Shares of Novavax were trading higher by 37 percent Wednesday morning at $1.83.

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