Novavax (NVAX) on Wednesday announced the acquisition of Praha Vaccines to help the late-stage biotech company produce over 1 billion doses of its experimental Covid-19 vaccine candidate starting in 2021.The U.S. company will buy the manufacturing plant for about $167 million in an all cash transaction. Starting in 2021, the plant is expected to provide an annual capacity of over 1 billion doses of antigen for the company’s vaccine candidate, also known as NVX‑CoV2373. As part of the transaction, about 150 employees with experience in vaccine manufacturing and support will join Novavax.“Manufacturing capacity is a critical component of our strategy to deliver a vaccine for the COVID-19 pandemic,” said Stanley C. Erck, President and CEO of Novavax. “This acquisition provides the vital assets required to produce more than 1 billion doses per year. We will continue efforts to expand antigen capacity in the U.S. and Asia, and increase production of Matrix-M to match antigen capacity at multiple sites globally.”NVX‑CoV2373 consists of a stable, prefusion protein antigen made using Novavax’s proprietary nanoparticle technology and includes its proprietary Matrix‑M adjuvant. On Tuesday, Novavax announced that it is starting human testing in its Phase 1/2 clinical trial of the vaccine candidate and is expecting results in July.The Praha Vaccines acquisition is supported by a funding arrangement with the Coalition for Epidemic Preparedness Innovations (CEPI), which will help the company to expand its manufacturing capacity.As part of the deal, the biotech company will work in collaboration with the Serum Institute of India (SII) to boost production levels at the Bohumil facility by the end of 2020.Novavax’s stock has jumped 10 times in value since the start of the year and was down 5.6% trading at $45.47 as of Wednesday’s close.Following the announcement, five-star analyst Mayank Mamtani at B. Riley FBR raised the stock’s price target to $61 from $53, reflecting another 34% upside potential in the shares over the coming year.Mamtani said that he now expects earlier global market entry of the 2373 vaccine candidate as well as “model additional non-dilutive funding to further accelerate development and commercialization activities.” The analyst maintained a Buy rating on the stock.“We view this as another encouraging development providing validation to the de-risked nature of NVAX's vaccine candidate, on the basis of the most extensive/differentiated preclinical data generated to date, and now reviewed closely by global scientific community residing with CEPI, WHO, and SII as well as U.S. agencies such as CDC, NIH-NIAID, and BARDA,” Mamtani wrote in a note to investors.The rest of Wall Street analysts covering the stock in the past three months join Mamtani in their recommendation to Buy the shares. The Strong Buy consensus is backed up by 5 unanimous Buy ratings. In view of the stock’s fast rally this year, the $49.20 average price target indicates a modest 8% upside potential in the coming 12 months. (See Novavax stock analysis on TipRanks).Related News: Novavax Begins Human Testing For Covid-19 Vaccine, Expects Results In July Novavax Spikes 31% on $384 Million Cash Injection for Vaccine Production Novavax Seeks To Raise $250 Million From Share Sale; Top Analyst Bumps Up PT More recent articles from Smarter Analyst: * Billionaire Ackman Exits Berkshire Hathaway, Blackstone To Fund Opportunities * HBO Max Launches, But Not Yet Available on Amazon, Roku Platforms * Apple Snaps Up AI Startup Inductiv, As Analysts Boost PTs On Store Reopenings * Microsoft Seeks $2B Stake In India’s Jio Platforms- Report
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Top news and what to watch in the markets on Thursday, May 28, 2020.
(Bloomberg Opinion) — Don’t fight the U.S. Federal Reserve — repeat that mantra until it sticks.Jamie Dimon, the boss of JPMorgan Chase & Co., put it well this week. “This wasn’t the bazooka,” he said, referring to Jay Powell’s response to the coronavirus crisis. “The Fed took out the whole military and applied it. Just announcing these programs reduced spreads (the difference between corporate bond yields and their benchmarks) in the market. It’s going to save a lot of small businesses.” In the past month, the equity market’s glass has gone from pretty much empty to at least half full and that’s down to the coordinated fiscal and monetary effort from authorities far and wide. You want some quantitative easing? Please, have some more and take some for the journey home. Even those foot draggers at the European Union are talking about radical fiscal action. We won’t really see a V-shaped economic recovery, but it seems seem like we’ve stopped the L.Nonetheless, this is a recovery based so far on asset-price inflation rather than any economic data. Central bank and government action may have restored financial valuations but real incomes will still suffer dramatically for a long while to come. Unemployment and diminished consumption cannot be magicked away.The stock market is looking even further into the distance than usual to justify its valuations, which is sometimes hard to square away against a constant stream of dire economic statistics and evaporating company earnings. Since QE came to life during the global financial crisis, it has paid for investors to cast aside their usual forward-earnings analysis and focus instead on the rising tide of money. The central banks have learned their post-2008 lessons and have barely put a foot wrong this time. This is having uneven effects, however. The bulk of the stimulus is coming into investment-grade assets because that’s where central banks feel more comfortable. Credit spreads have recovered most in BBB and A-rated bonds. High-yield yield assets improved sharply at first, but this has abated. The spread between the yields on investment-grade debt and those of junk bonds is still nearly double the levels seen in February. Similarly, new debt issuance is motoring again but only for the better-quality names. While U.S. banks such as Citigroup Inc. and Wells Fargo & Co. are returning for the fifth or sixth time this year to replenish capital, the junk sector has been restricted to one-off selective deals — often with eye-watering yields.The change in stock market sentiment isn’t just about QE. The oil price collapse has come and gone and fears of a devastating second wave of Covid-19 are easing. Short-selling bans have quietly been lifted in several European countries too, and some of the recent improvement may be explained by that. The sound of economies cranking back into life can just about be made out over the whirring of the monetary printing presses, allowing even bombed-out old economy stocks to recover, not just the new technology darlings.Notably, some of the recent action has been in high-dividend stocks, which had been forced to skip shareholder payouts at the height of the crisis. Investors had feared that the dividend bans might last several years; now they think it may be a quarter or two. Many investment funds work off a dividend-yield model.Investment managers may be doing the natural thing right now and chasing the rising stock market indexes, but that doesn’t mean they’re brimful of confidence. The Bank of America fund manager survey for May shows extreme bearishness pervades, with only 10% expecting a V-shaped recovery and 68% expecting stock prices to fall. Given the recent positive news on the virus and the gradual ending of lockdowns, the June survey might be different.The fiscal response will determine how the economy recovers over the long term but the monetary triage has worked better than anyone could have expected in those ugly days of March. For that we should be grateful, and for the stock market’s semi-rational exuberance.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.