Novavax’s COVID-19 Vaccine Is 89.3% Effective In UK Trial; Shares Pop 27%

Shares of Novavax spiked almost 27% in Thursday’s extended market session after the biotech company announced that its coronavirus vaccine showed to be 89.3% effective against COVID-19 in a UK trial.

The results of the Phase 3 trial conducted in the UK demonstrated that Novavax’s (NVAX) protein-based COVID-19 vaccine candidate, NVX‑CoV2373, met the primary endpoint, with a vaccine efficacy of 89.3%. The biotech company also released “successful” results of its Phase 2b study conducted in South Africa, where a new variant strain of the virus emerged.

NVX‑CoV2373 is a stable, prefusion protein made using Novavax’s recombinant protein nanoparticle technology and includes the company’s proprietary Matrix‑M adjuvant. The purified protein is encoded by the genetic sequence of the SARS-CoV-2 spike (S) protein and is produced in insect cells. It is stable at 2°C to 8°C and is shipped in a ready-to-use liquid formulation that allows distribution using standard vaccine supply chain channels.

“With today’s results from our UK Phase 3 and South Africa Phase 2b clinical trials, we have now reported data on our COVID-19 vaccine from Phase 1, 2 and 3 trials involving over 20,000 participants,” Novavax CEO Stanley C. Erck said. “NVX-CoV2373 is the first vaccine to demonstrate not only high clinical efficacy against COVID-19 but also significant clinical efficacy against both the rapidly emerging UK and South Africa variants.”

The UK study enrolled more than 15,000 participants between 18-84 years of age, including 27% over the age of 65. According to preliminary analysis, about 50% of the patients were infected with the UK variant strain. Based on PCR (polymerase chain reaction) conducted on strains from 56 of the 62 cases, efficacy by strain was found to be 95.6% against the original COVID-19 strain and 85.6% against the UK variant strain.

In the South Africa Phase 2b clinical trial, the Novavax vaccine was 49.4% effective against COVID-19. Additionally, the vaccine was found to be 60% effective in the prevention of mild, moderate and severe COVID-19 disease in 94% of the study population that was HIV-negative.

Novavax also announced that in early January it has started the development of new constructs of its vaccine to protect against the emerging virus variants and expects to select ideal candidates for a booster in the coming days. Clinical trial testing of these new vaccines is expected to be kicked off in the second quarter of this year.

“A primary benefit of our adjuvanted platform is that it uses a very small amount of antigen, enabling the rapid creation and large-scale production of combination vaccine candidates that could potentially address multiple circulating strains of COVID-19,” said Gregory M. Glenn, President of R&D at Novavax. “Combined with the safety profile that has been observed in our studies to-date with our COVID-19 vaccine, as well as prior studies in influenza, we are optimistic about our ability to rapidly adapt to evolving conditions.”

Following the data release, B. Riley Financial analyst Mayank Mamtani reiterated a Buy rating on the stock with a Street-high $223 price target (66% upside potential), as he believes that NVX‑CoV2373 is on the right track to “being the “vaccine of the masses” well suited to accelerate rate of vaccinations globally.”

“In our view, these results came above Street expectations, particularly reaffirming best-in-class attributes of NVX-CoV2373 and likely makes a strong case for Emergency Use Approval (EUA) to be issued by the U.S. FDA,” Mamtani wrote in a note to investors. (See Novavax stock analysis on TipRanks).

The rest of the Street has a cautiously optimistic outlook. The Moderate Buy consensus rating is based on 5 recent Buy ratings versus only 1 Sell rating. What’s more, the average analyst price target of $183.20 indicates another 37% upside potential from current levels. That’s after shares already surged 53% over the past three months.

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