On Tuesday, TD Cowen maintained a Buy rating on Vaxcyte (NASDAQ:PCVX), following promising results from its pneumococcal conjugate vaccine candidate, VAX-31. The vaccine aims to provide broader protection against invasive pneumococcal disease (IPD) compared to current market leaders.
VAX-31 is designed to cover over 95% of circulating IPD strains in the United States and 98% in the European Union. This is a significant increase from the 52% coverage offered by Pfizer (NYSE:PFE)'s Prevnar 20 and the 83% coverage from Merck's recently approved V116. In a Phase I/II trial involving 1,015 healthy adults aged 50 and above, VAX-31 demonstrated non-inferiority in immunogenicity across all 31 serotypes at middle and high doses, and even at a low dose, it was effective against all but two serotypes.
Notably, VAX-31 showed statistical superiority over PCV20 in seven serotypes at the high dose and in five serotypes at the middle dose. The vaccine also exhibited superior performance for serotype 19F, which is known to be challenging to target. Despite the difficulties in eliciting responses to serotypes 3 and 19A, due to their high prevalence in disease, VAX-31 achieved non-inferiority for these as well.
The data stands out as VAX-31 surpassed expectations by not missing on any of the anticipated serotypes. In contrast, Merck's Phase III STRIDE-10 study of V116 only showed non-inferiority on the 12 serotypes common with PPSV23 and superiority on its unique serotypes. The success of VAX-31 in its recent trial positions it as a potentially more effective option in the pneumococcal vaccine market.
In other recent news, Vaxcyte, a clinical-stage vaccine company, has announced a public offering of $1.0 billion in common stock and pre-funded warrants. This development coincides with the company's ongoing efforts to develop vaccines against bacterial diseases, including its leading candidates VAX-31 and VAX-24. The offering is being managed by several financial institutions, including BofA Securities, Jefferies, Leerink Partners, and Goldman Sachs (NYSE:GS) & Co. LLC.
In addition, Vaxcyte has reported encouraging results from a Phase 1/2 study of its pneumococcal conjugate vaccine candidate, VAX-31. The vaccine met or exceeded immunogenicity criteria for all 31 serotypes at middle and high doses. Following these positive results, financial services firms BTIG and Jefferies have raised their price targets for Vaxcyte, maintaining Buy ratings.
Moreover, Vaxcyte has appointed John P. Furey to its Board of Directors, a move that signifies recent changes in the company's corporate structure. Vaxcyte's VAX-31 vaccine has also been rated Outperform by Mizuho, and the company plans to advance VAX-31 to a Phase 3 program for adult immunization by mid-2025. These recent developments reflect the ongoing progress and high expectations for Vaxcyte in the vaccine industry.
InvestingPro Insights
In light of Vaxcyte's (NASDAQ:PCVX) recent success with its vaccine candidate VAX-31, an analysis of the company's financial health and market performance offers additional insight for investors. Vaxcyte holds more cash than debt on its balance sheet, providing the company with a solid liquidity position as it continues to develop its vaccine portfolio. This is further supported by the fact that the company's liquid assets exceed its short-term obligations, indicating a strong short-term financial stability.
However, it's worth noting that Vaxcyte is not expected to be profitable this year, and analysts have revised their earnings downwards for the upcoming period, reflecting the challenges and high costs associated with bringing a new vaccine to market. Moreover, the company's gross profit margins have been weak, with a gross profit of -75M USD over the last twelve months as of Q2 2024. This underscores the importance of VAX-31's clinical success for the company's future profitability.
Despite these challenges, Vaxcyte has shown a strong return over the last year, with a 52.09% price total return, hinting at investor optimism regarding the company's long-term prospects. The stock is currently trading at 92.35% of its 52-week high, with a previous close at 80.76 USD. Investors seeking more in-depth analysis can find additional InvestingPro Tips for Vaxcyte at InvestingPro.
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