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Novavax: Progress Against the Flu

11/19/2013 7:00 am EST


John McCamant

Editor, Medical Technology Stock Letter

One of our core biotech holdings surprised us by publishing positive results in the most recent online edition of The New England Journal of Medicine (NEJM), notes John McCamant, editor of The Medical Technology Stock Letter.

Novavax (NVAX) released its Phase I trial of 284 subjects injected with the H7N9 flu virus vaccine.

While the data was expected to be released before the end of the year, the fact that the NEJM published the Phase I study adds tremendous validation to the NVAX vaccine. We would note that the prestigious NEJM rarely publishes Phase I data.

The current Biomedical Advanced Research and Development Authority (BARDA) contract has directed the company to utilize the current portion of its pandemic flu contract on H7N9, underscoring the new virus' global pandemic potential.

NVAX cloned the genes and began human studies in a remarkable 91 days afterwards—resulting in a positive clinical outcome just 116 days after the announced lethal outbreak.

Some details of the study include:

  • 81% of 5ug adjuvanted vaccine recipients had protective HAI levels; 97% of 5ug adjuvanted vaccine recipients had anti-neuraminidase antibody responses.

  • Dose-sparing formulation shows significant potential utility in the event of a pandemic.

  • Vaccine safety consistent with previously tested adjuvanted pandemic vaccines. Although just the first study, the data is supportive of a bonafide H7N9 vaccine.

While most investors give NVAX little or no credit for its pandemic program, the progress and results of the data—now published in NEJM—offer evidence that the company needs to be considered a major player in this field, and that it is an undervalued asset.

In fact, Novartis (NVS) also released data on their H7N9 vaccine—a sign that this virus is important and a vaccine is valuable.

Further validation will be the signing of global stockpiling contracts—we are not aware of any right now—but would not be surprised should one or more eventually be formed. NVAX is a buy under $3.50, with target price of $8 per share.

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