AstraZeneca? AZN.US ?The first batch of vaccines is expected to be delivered to the United States in October, far faster than the top vaccine companies in the U.S. stock market, prompting investors to reassess their value.
On Monday, popular vaccine stocks in the U.S. market plummeted across the board.
Among them, the vaccine manufacturer heat biology? HTBX.US ?Shares fell 13.04%, inovio pharmaceuticals? INO.US ?Shares fell 13.19%, Novavax? NVAX.US ?The stock price fell 13.34%.
The urgent authorization of AstraZeneca vaccine and the authorization of plasma therapy may be the direct cause of the stock price decline of other vaccine companies.
Previously, the trump administration is considering using the emergency use authorization mechanism (EUA) to introduce AstraZeneca vaccine through a fast track to start vaccination in the United States before the presidential election.
AstraZeneca also said it will deliver the first dose of the vaccine to the United States in October, if the FDA Approves the safety and effectiveness of the vaccine or grants emergency use authorization. AstraZeneca shares rose 1.88% on Monday.
On Sunday, the U.S. Food and Drug Administration (FDA) also urgently authorized convalescent plasma for inpatients with covid-19. Plasma therapy reduced mortality by 35%, trump said at a news conference on Sunday.
The trump administration’s move seems to have raised concerns among investors in vaccine companies, who are worried that they are far behind AstraZeneca in clinical development. In short, AstraZeneca is likely to quickly capture market share through EUA.
After all, so far, heat biology? HTBX.US ?The vaccine has just released preclinical data, and early clinical trials are not planned to begin until the first quarter of 2021. Inovio plans to start clinical trials of its candidate vaccine, ino-4800, later this year.
And Novavax? NVAX.US ?So far, only one phase of clinical trial has been completed.
Novavax is grossly overvalued
Among them, after a 3560% rise this year, the share price of Star stock Novavax hit a new low since July 16.
The recombinant protein vaccine (nvx-cov2373) developed by Novavax may drive huge growth in the future, but it does not guarantee that the vaccine can pass the rest of clinical trials and quickly occupy market share.
After all, the experimental data of vaccines from other technological routes are quite good, and many vaccine companies are eyeing the market.
Some analysts said that the current stock price trend may have reflected the market’s expectation on the success of vaccine research and development. If the vaccine development fails, it will bring huge losses to the company. Therefore, some analysts said that in order to be cautious, the market should be valued according to novamax’s previously well developed seasonal influenza vaccine novaflu for the elderly.
Nanoflu’s success doesn’t support the stock price
Nanoflu is the most advanced vaccine project in Novavax’s R & D pipeline, which has been developed for many years. The vaccine, which recently completed its final phase of clinical trials and proved to be safer and more effective than other vaccines on the market, is likely to be approved for sale by the FDA next year.
Novavax estimates that the market size of influenza vaccine use by the elderly (aged 65 and older) in the United States and the European Union will exceed $4 billion in the United States and the European Union. If Novavax could capture 35% of the market, it would have at least $1.4 billion in annual sales, 27 times the company’s revenue in the past 12 months.
Since Novavax has only two real competitors, 35% is a very conservative market share estimate, and one of the two competitors has proven to be less safe and effective than nanoflu.
However, even with a substantial increase in revenue, Novavax’s shares are likely to be overvalued based on their selling price ratio.
In the U.S. stock market, the average PS of biotechnology companies is 70 times, but Novavax’s current PS is 179 times. In this case, even in terms of nanoflu’s sales revenue above, the company is still too expensive.
Covid-19 vaccine is the hope?
Although analysts estimate that Novavax’s share price will exceed $160 in the first year after the new vaccine is released, and will rise with the increase of vaccine revenue.
But some people think that even if it does not rise much more than its current share price, Novavax’s share price will not grow as explosively as it did this year.
On the other hand, if Novavax’s recombinant protein vaccine fails, the stock is likely to fall sharply, reversing this year’s gains and ignoring nanoflu’s sales growth.
As a result, the vaccine will be the total bet of Novavax at present, and the sales of nanoflu will be the most certain source of revenue for Novavax in the future.
However, given the market’s enthusiasm for vaccines, if the company continues to report positive clinical trial data, investors will not be able to tell how much Novavax’s shares will rise.
For this reason, analysts believe Novavax’s share price still has the potential to soar, even though the company’s risk has never been greater after the boom.