Novavax (NVAX) to Present Topline Phase 2 Data on RSV F Vaccine Next Week

According to the CDC, respiratory syncytial virus (RSV) is the most common cause of bronchiolitis and pneumonia in children younger than 1 year old in the US and is also a significant cause of respiratory illness in older adults. Globally, RSV is second only to malaria as a cause of death in
children younger than 1 year old, according to
Oxford’s Vaccine Knowledge Project.

We’ve been following a company called Novavax (Nasdaq: NVAX) that has a maternal vaccine candidate for RSV F that has first-to-market potential. RSV F is the RSV fusion glycoprotein, the principal target of RSV neutralizing antibodies in human sera (Nature magazine). Repeat infections and lifelong susceptibility to RSV are common, and Novavax estimates the annual global cost burden of RSV to be in excess of $88 billion.

Novavax announced yesterday that it will host a conference call and webcast next Monday, July 24, 2017, at 4:30 pm ET. The company anticipates receiving results and announcing topline data from its Phase 2 safety and immunogenicity trial of its RSV F vaccine in older adults (>= 60 years old). In addition, management will provide an update on its prior Phase 2 and Phase 3 clinical trials in older adults and well as its RSV Phase 3 clinical trial for infants via maternal immunization. Callers may dial 877-212-6076 (domestic) or 707-287-9331 (international). Passcode: 54820069. A webcast will also be available on the company’s website.

The market is anticipating positive news on the call, as the stock is up 25% just on the announcement. Readers may recall investors’ significant disappointment last September when Novavax reported poor results from two clinical trials of its RSV F vaccine in older adults. The stock lost 85% of its value in one day after the company disclosed that its candidate didn’t meet the pre-specified efficacy objectives.

After a clearly mandated analysis and evaluation of the data, the company initiated a new trial in January 2017, this time employing a multiple dose regimen and adjuvants. This is the trial for which Novavax will be releasing topline data on Monday.

We like the risk-reward of the company’s prospects at current levels. Even with today’s move, the stock is still valued at under $400 million, a fraction of the $2.3 billion valuation it carried before the bad news last fall. A case can be made that it was perhaps overvalued at those levels and undervalued currently. RSV represents a very large market opportunity for which there is no currently approved vaccine. Any tangible progress toward developing a viable treatment for RSV would lend credibility to the balance of Novavax’s vaccine platform and pipeline, which is targeting a range of deadly infectious diseases.

Source: Novavax

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