Novavax Analyst Says DoD Funding Reflects Conviction In Platform, Ability To Deliver On Vaccine

Novavax, Inc. (NASDAQ: NVAX) is landing financing deals that could help to successfully develop a vaccine for SARS-CoV, the virus that causes COVID-19.

Novavax's Defense Department Funding 

The Gaithersburg, Maryland-based biotech said late Thursday that it has been granted funding of up to $60 million by the Department of Defense for manufacturing several components of the vaccine codenamed NVX-CoV2373 in the U.S.

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Novavax Analyst: Positive NanoFlu Readout Could Have Driven Increased Conviction

The accent on domestic manufacturing is probably due to security reasons, Cantor Fitzgerald analyst Charles Duncan said in a note.

Novavax's vaccine consists of stable, prefusion protein antigen made using its proprietary nanoparticle technology and includes its proprietary Matrix M adjuvant.

The analyst said he expected funding from government organizations, although Novavax was not part of the "unofficial" list of five finalists for the White House's "Operation Warp Speed."

The agreement signals conviction in Novavax's recombinant nanoparticle platform and its potential to deliver an efficacious vaccine for COVID-19, probably due to the recent positive Phase 3 readout for its NanoFlu vaccine, he said. 

Cantor has an Overweight rating and $45 price target for Novavax shares.

In mid-May, the company received an incremental $384 million in funding from the Coalition for Epidemic Preparedness Innovations for its vaccine program.

"We are genuinely honored at the opportunity to protect our military personnel and their families who have devoted themselves to the needs of U.S. citizens and others worldwide," Novavax CEO Stanley Erck said in a statement. 

What's Next For Novavax 

Novavax said as part of the contract it will work with a U.S.-based biologics CDMO to manufacture the antigen component of NVX-CoV2373 for at least 10 million doses of vaccine to be used in Phase 2/3 studies and/or under an Emergency Use Authorization if one is approved by the FDA.

It will also work with U.S.-based CDMOs to scale up production and manufacture of the Matrix-M adjuvant component of the vaccine.

The company is conducting a Phase 1 study in healthy volunteers, with preliminary immunogenicity and safety data due in July.

"Forthcoming data this summer should provide a gauge of possibilities and probabilities for moving forward," said Cantor's Duncan. 

NVAX Price Action

Novavax shares were up 2.31% at $45.69 at the time of publication Friday. 

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