Novavax, Australia Ink Deal For 40M Covid Vaccine Doses; Shares Rise

Novavax (NVAX) has signed a non-binding heads of terms document with the Australian Government to supply 40 million doses of the company’s COVID-19 vaccine candidate, NVX-CoV2373, to the country. Shares are currently trading up 4% in Wednesday’s trading.

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“This arrangement with the Australian Government reflects the importance of the ongoing clinical development of NVX-CoV2373, and will ensure that the citizens of Australia will have access to its supply,” commented Stanley C. Erck, CEO of Novavax.

“We are pleased with the progress of our ongoing Phase 3 clinical trial in the UK, and are pressing forward to deliver efficacy data for NVX-CoV2373, with interim data in this event-driven trial expected as soon as early first quarter 2021” he added.

The agreement provides for the delivery of NVX-CoV2373 to Australia starting as early as the first half of 2021, subject to the successful completion of Phase 3 clinical development and approval of the vaccine by Australia’s Therapeutic Goods Administration (TGA). The vaccine regimen is expected to require two doses per individual, administered 21 days apart.

To date, Novavax has established various agreements for the supply of NVX-CoV2373 directly to the US and the UK, Canada and now Australia, and through partnerships, supply to Japan, South Korea and India.

NVX-CoV2373 is a vaccine candidate engineered from the genetic sequence of SARS-CoV-2, the virus that causes COVID-19 disease. NVX-CoV2373 was created using Novavax’s recombinant nanoparticle technology to generate antigen derived from the coronavirus spike (S) protein and contains Novavax’s patented Matrix-M adjuvant to enhance the immune response and stimulate high levels of neutralizing antibodies.

The company has already secured $2 billion in funding for its global coronavirus vaccine program, including up to $388 million in funding from the Coalition for Epidemic Preparedness Innovations (CEPI).

In the run-up to developing a coronavirus vaccine candidate, the stock has this year exploded 2,078%. However, NVAX has seen some sell-off activity recently, as the stock has shed about 50% over the past 3 months. (See Novavax stock analysis on TipRanks).

B. Riley Financial analyst Mayank Mamtani recently reiterated a Buy rating on the stock with a $223 price target (157% upside potential).

“Our optimism is derived from Ph. III U.K. study benefiting from a high infection rate, i.e., increasing since trial initiation in Sep’20, from 6.6k cases/day to 20.9k cases/day; mgmt. expects to complete enrollment by end of November,” Mamtani wrote in a note to investors.

“We view this pace of both enrollment and anticipated events to compare favorably relative to that observed with Ph. III U.S. trials from PFE (95%/80% of 44k subjects enrolled/received second dose) and MRNA (fully enrolled 30k subjects) that initiated in late July.”

The rest of the Street has a cautiously optimistic stance on the stock’s outlook. The Moderate Buy analyst consensus shows 4 Buy ratings versus only 1 Sell rating. Meanwhile, the $220.80 average analyst price target indicates a promising 155% upside potential from current levels.