(Bloomberg) – Results from Novavax Inc.’s Covid-19 vaccine are imminently expected, and scientists will scan the data to measure the vaccine’s promise. At the same time, daily traders, who have acquired shares since March, will be looking for a value increase of more than $ 7 billion to hold.
Vaccine candidates presented so far have detailed initial antibody and T-cell responses from the patient and compare them to levels seen in patients who have recovered from the virus. Investors will be looking for those initial responses from the immune system when Novavax reveals its data, likely sometime next week.
Novavax is on track to become a household name similar to Moderna Inc., another vaccine developer that has met since March but has yet to get a product to market. Recent US $ 1.6 billion in funding from the United States government has bolstered Novavax’s credibility despite some concern over the use of industrial ties to gain that endorsement.
The need for a vaccine is clear, as Covid-19 cases in the US exceed 4 million and the virus is spreading across the Sunbelt. According to the World Health Organization, there are approximately 25 vaccines in human trials with more than 140 others in early stages of development.
The market has responded positively to some of the early results in people from Moderna, as well as messenger RNA vaccines from Pfizer Inc. and BioNTech SE. The experimental take of AstraZeneca Plc with the University of Oxford was compared less favorably by some on Wall Street. Biotechnologies that did not provide enough detail have returned some of their stock earnings.
Insect cells
Novavax’s vaccine, NVX-CoV2373, uses insect cells to grow key proteins, and the company has said it may be easier to mass-produce than some rival vaccines. NVX-CoV2373 is being tested on a two-dose regimen, and some patients obtain an improved formulation with the company’s proprietary plant-based nanoparticle technology to further stimulate the immune response.
The results so far have measured these immune responses at different time points and using different measurements, making them difficult to compare.
“It is an imperfect situation,” said Steven Seedhouse, an analyst at Raymond James in a phone call. “There is data available, as much as possible, you can do your best to interpret it.”
The first antibody results from Pfizer, associated with BioNTech, have seemed the most promising so far, said Seedhouse, who has a doctorate in molecular pharmacology. “We don’t know what immunity is going to confer, and we certainly don’t know what immunity is going to confer.”
JPMorgan Chase analyst Eric Joseph also tested positive for the Pfizer vaccine. Their results that generated virus neutralizing antibodies up to three times higher than those found in patients who had recovered from Covid-19 create “a challenging setup” for Novavax.
Safety, of course, is paramount for vaccines given to healthy people, and the results so far on top candidates have not raised any major alarms.
Tolerability caution
However, Joseph, who is neutral at Novavax, warned of potential tolerability issues. Joseph wrote in a note to clients that his Covid-19 vaccine uses the same technology that is in his still-experimental flu shot, which has shown more adverse events after treatment than a comparative flu shot.
Even for bears that bet against the company, the stakes are high. Short sellers have lost just over $ 1 billion this year, according to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners. With around $ 1.3 billion of shares sold short, the stock is a top tier candidate, according to its analysis.
According to analysts at Goldman Sachs, led by Terence Flynn, the vaccine stocks, including Novavax, show options investors are positioning for unbalanced risk that the stocks will post huge gains. Covid-19 stock call options like Novavax are “unusually expensive” compared to put options, they said.
The option data implies that Novavax, based in Gaithersburg, Maryland, could move an additional 14% through July 31. Investors trying to get ahead of the stock movements should also watch the actions of a Novavax partner, Emergent BioSolutions Inc., which provides manufacturing and development services from a handful of sites in Maryland.
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