There is simply no other way to describe the rise of Novavax (NVAX) as anything other than phenomenal. Shares of the vaccine specialist are up by 1,844% year-to-date and we are not even at the halfway point.
As the last week has made clear, COVID-19 is not about to disappear anytime soon. With Novavax firmly in the mix among those hoping to bring a solution to market, can the biotech replicate 1H20’s performance in the latter half of the year?
That’s a big ask, although B Riley FBR analyst Mayank Mamtani expects Novavax to keep up the momentum.
Pointing out several catalysts for further upside, the 5-star analyst notes “Increasing visibility on (1) outlook of global pandemic in 2H20 and its implication to pace of licensure-enabling symptomatic disease prevention trials, (2) emerging policy framework to vaccine uptake including a potential state imposed mandate, as published in recent NEJM Perspective piece, and (3) infrastructure investments for manufacturing, distribution, and stockpiling of multiple vaccine constructs, as also supported by recent announcements for non-dilutive funding.”
Mamtani believes there could be further funding heading Novavax’ way. The company received $60 million from the U.S. Department of Defense (DoD) earlier in June to further the advancement of its experimental vaccine candidate, NVX-CoV2373. But a recent $71 million grant from the DoD to Inovio to fund its DNA COVID-19 vaccine program and the addition of biotech Vaxart to the government’s Operation Warp Speed program (to fund its non-human primate (NHP) challenge study), indicate to Mamtani that Novavax could be the recipient of additional support.
“We continue to believe in NVAX securing a sizeable funding from U.S. BARDA, as part of the ~$4B left over from the original $6.5B allocation under the CARES Act for COVID-19 vaccine development and manufacturing,” Mamtani said.
Even without further funding, the $200 million’s worth of shares sold to RA Capital, along with the receipt of $76 million out of the total $385 CEPI grant from May, should enable Novavax to see out 2Q with over $380 million in cash.
Add to that the recent additions of established biotech veterans for the roles of CMO and SVP of Corporate Affairs, and the “balance sheet and team are stronger than ever.”
To this end, Mamtani reiterates a Buy rating on NVAX shares, while raising the price target to $106 (from $74). Investors will be taking home a 23% premium, should Mamtani’s thesis play out over the coming months. (To watch Mamtani’s track record, hier klicken)
Turning now to the rest of Street, where based on 4 Buys and 1 Hold, NVAX has a Strong Buy consensus rating. However, the average price target of $75.8, indicates possible downside of 5% and the impression Mamtani’s colleagues feel the biotech might have soared high enough for now. (See Novavax stock-price forecast on TipRanks)
To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Beste Aktien zu kaufen, ein neu eingeführtes Tool, das alle Einblicke in das Eigenkapital von TipRanks vereint.