For A Tarnished Novavax, An Effective Zika Vaccine Could Be The Only Cure

Cantor Fitzgerald believes only an effective Zika vaccine could revive Novavax, Inc. NVAX, which reported failure of its respiratory disease vaccine in a late stage study in September.

The company’s RSV F-protein recombinant nanoparticle vaccine candidate, which failed to hit both primary and secondary endpoints, was studied to treat older adults with respiratory syncytial virus (RSV), a disease that causes serious infection of the respiratory tract, similar to influenza.

Different Concerns From Ebola

Novavax says the Zika outbreak may be unlike Ebola in that the latter erupted but dissipated.

“If so, it is possible that broad vaccination against Zika, much like is done with HPV could be recommended. Human testing of the Zika vaccine candidate could commence in 2H17,” analyst William Tanner wrote in a note.

Tanner, who has a Neutral rating on the stock, sees limited upside to shares until there is better clarity as to whether an interim look will be taken in the maternal vaccination study of the company's proprietary RSV vaccine.

“Clinical data suggest that the vaccine is immunogenic in pregnant women and that anti-RS F protein antibodies are efficiently transferred across the placenta to the fetus,” Tanner continued.

Upcoming Studies

Meanwhile, Novavax expects to initiate a study in elderly subjects that tests different RSV vaccine formulations and dosing regimens.

“For the vaccine to be viable in elderly subjects, we believe the company will have to find a means to improve the immunogenicity as it seems a weak response may have contributed to the Phase 3 Resolve trial failure,” Tanner highlighted.

At last check, shares of Novavax fell 2.22 percent to $1.32. Tanner has a price target of $2.