George Zavoico de JonasTrading ( anteriormente trabajaba para MLV )
Revised Outlook with Zika Vaccine, Flu Vaccine Delay, Ex-U.S. Partnering Talks; Maintain BUY Rating, But Lowering Price Target
Novavax recently provided guidance on the progress of its vaccine candidates and reported 4Q:15 and FY:15 earnings. The company announced that it had begun developing a vaccine against the dangerous Zika virus. While the RSV vaccine programs are advancing ahead of or on schedule, Novavax and BARDA are still reviewing earlier trial results to determine the path forward in developing its seasonal and pandemic influenza vaccines. Novavax also said it had initiated partnering discussions with other vaccine companies to license its vaccine candidates in ex-U.S. territories, which means it will likely be receiving royalties on sales instead of collecting all sales revenue for itself. Importantly, Novavax eliminated a financing overhang with its recent $325 million issuance of Senior Convertible Notes and an $89 million grant from the Bill & Melinda Gates Foundation (BMGF) to help fund development of the RSV vaccine in the developing world. However, the Notes offering led to a substantial increase in the short interest in Novavax’s stock that may, in the near term, limit any increase in its common stock price. Novavax missed our earnings projections largely because research and development (R&D) expenses were much higher than estimated due to the 4Q:15 start of two large Phase III trials of its RSV F vaccine candidate in the elderly and for maternal immunization. These and other developments prompted us to make major revisions to our model, leading us to lower our one-year price target to $17.00 from $22.00, while maintaining our BUY recommendation.
Zika vaccine in development. Novavax started development of a Zika vaccine, a global market potentially worth several billion dollars, in our view. Based on prior success in creating vaccines against other emerging virus threats, we project that a Zika vaccine candidate could be ready for human immunogenicity testing by mid-year. If so, and if the next clinical trials are successful, Novavax could be the first to market with a Zika vaccine.
RSV vaccine on track. Positive results of Novavax’s pivotal Phase III trial of an RSV vaccine for the elderly, expected by year-end, could lead to a BLA filing in early 2017. A maternal immunization Phase III and pediatric Phase I trial continue to enroll subjects.
Cash. Novavax ended 2015 with $230.7 million in current liquid assets and then raised $276 million (net) by the issuance of Convertible Senior Notes in February. We estimate an adjusted cash, cash equivalents and marketable securities balance of about $507 million will fund operations into mid-2017. We project a 2016 cash burn of $281 million.
Valuation and risks. We apply a 33% discount rate, raised from 20% previously, to our projected 2023 DCF to arrive at a $17.00 one-year price target. Risks include: negative results from ongoing and future clinical trials; disappointing reimbursement and adoption rate of flu and RSV vaccines if and when approved; emerging competition and; a possibility of dilutive financings.
PRODUCT PARTNERING STARTEGY
Importantly, Novavax stated on its earnings call that it initiated partnering discussions for licensing rights to its vaccine candidates in territories outside the U.S. Novavax justifies this approach as it believes it will accelerate product launch and maximize value outside of North America by choosing partners with existing infrastructure and experience in marketing and distribution vaccines. Due to uncertainties in timing and value, at this time we do not include potential upfront and milestone fees from future partners. However, we have revised our model to include royalties from ex-U.S. sales instead of collecting all of the sales revenue. We estimate what we believe is a reasonable royalty of 35% on net sales since Novavax will have taken most of the development risk for its vaccine candidates. This adjustment to our model reduces research and development and sales and marketing expenses as well as cost of goods sold, while also reducing total sales revenue
NVAX
GRACIAS KIYO!!!
Creo que se equivoca con la estimacion de quemado de caja para este 2016, pero el tiempo lo dira .
