Piper Jaffray Initiates Coverage on Novavax (NVAX) with an Overweight; Novel Vaccine Play

December 1, 2009 7:16 AM EST
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Piper Jaffray & Co. initiates coverage on Novavax, Inc. (Nasdaq: NVAX) with an Overweight rating. Price target $4.50.

Piper analyst says, "Novavax is developing a trivalent season flu vaccine that was well-tolerated and immunogenic in Phase II studies of young healthy volunteers. The company is now conducting a Phase II study in the elderly with data due in 1Q:10. Novavax has applied for a BARDA contract that is not in our numbers and could fully fund Phase III trials next year. Seasonal flu vaccines represent a $6 billion and growing annual market...Perhaps even more topical, Novavax has developed pandemic flu vaccines against H5N1 and H1N1 strains that could generate sales in 2010. Novavax is conducting Phase III trials in Mexico with data due early next year. Global pandemic vaccine supply has fallen far short of demand, offering potential upside to our Novavax forecast...Novavax has entered into strategic regional partnerships with Avimex in Mexico, Cadila in India and Rovi in Spain to develop pandemic flu vaccine supply. The company also signed a manufacturing contract with Xcellerex to provide H1N1 supply this year. These deals offer non-dilutive financing and leverage the company's R&D investment while retaining rights in major markets. We look for Novavax to enter into additional such alliances in the future....Earlier this year, Novavax cleaned up the balance sheet by retiring all outstanding convertible debt. Novavax recently completed a public offering bringing pro forma cash to $59 million, which we estimate should last into 2011 without any new potential partnerships."

To see all the upgrades/downgrades on shares of NVAX, visit our Analyst Ratings page.

Novavax, Inc. (Novavax) is a clinical-stage biopharmaceutical company focused on creating differentiated, value-added vaccines that improve upon preventive options for a range of infectious diseases.

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