(NVAX) - Mad Hedge Fund Trader

The Comeback Kid Of Vaccines

What a rollercoaster it’s been for Novavax (NVAX). Their latest Q1 2024 earnings were a mixed bag—they beat EPS expectations but missed on revenue. A far cry from when they were the undisputed rising star of the biotech world, their stock soaring a mind-boggling 6000% during the peak pandemic days.

Back then, they were the hotshots, but lately, the big leagues with the right connections had been sweeping opportunities right out from under them. Until now.

Earlier this week, Novavax’s shares took off like a rocket, even hitting a mind-blowing 175% jump in premarket trading at one point. That's right – 175%!

Turns out, those Q1 earnings weren't all doom and gloom. Sure, they missed on revenue, but their net loss got chopped in half compared to last year, and revenue still managed to grow by a respectable 16%. This isn't just a rebound; it's a sign that Novavax might just be back in the game.

But let's be real, the main reason behind this stock explosion is their shiny new deal with Sanofi (SNY), a heavyweight in the pharma world. We're talking a cool $1.2 billion.

Remember, Novavax was once the darling of the biotech scene during the pandemic, their stock soaring a mind-boggling 6000%. But lately, they've struggled to secure the big partnerships needed to really make a splash in the market. This Sanofi deal? It's the lifeline they've been waiting for.

This isn't just any partnership. Sanofi's shelling out a cool $500 million upfront, with another $700 million on the line if certain milestones are met, all for a piece of the Novavax COVID-19 vaccine pie and a chance to collaborate on future projects.

Now, Sanofi isn't exactly known for throwing money around willy-nilly, so this is a major vote of confidence. What's got them so excited?

Novavax's not-so-secret weapon: Matrix-M, a revolutionary adjuvant technology that's got the potential to shake up the vaccine world.

Think of Matrix-M as a personal trainer for your immune system. It doesn't fight the disease itself, but it whips your body's defenses into shape, making them stronger and more effective at fighting off infection.

To understand this better, imagine you're going into a boxing match. The vaccine is the boxer, ready to throw punches at the virus. But Matrix-M is the coach in their corner, giving them the extra training and conditioning they need to deliver a knockout blow.

Novavax isn't just using this personal trainer for their COVID vaccine. They're exploring how to use it to coach our immune systems in fighting all kinds of diseases, even the heavyweights like cancer. It's like having a secret weapon that could revolutionize how we approach health and wellness.

That means Matrix-M technology has the potential to open up a whole new world of treatment options and revenue streams. It's like investing in a gym that's developing a revolutionary new training program – the potential gains could be huge.

Now, this tech isn't a sure thing yet, but Sanofi's backing is a big deal. It's a vote of confidence that screams, "We believe in you, Novavax!"

And when a pharma giant like Sanofi puts their money where their mouth is, you know they see serious potential in those nanoparticle innovations and adjuvant magic. After all, who better to mass-produce a vaccine than one of the biggest players in the game?

This isn't just about COVID-19, either. This is about building a foundation for a whole new generation of vaccines, the kind that could rewrite the rules of healthcare as we know it.

Novavax isn't just sitting back and waiting, either. They're already gearing up for Phase III trials of a combo COVID-19-Influenza vaccine and diving headfirst into cutting-edge mucosal vaccine technology and high-density nanoparticles.

And let's not forget the cold, hard cash this deal brings to Novavax.

With half of Sanofi's investment expected to hit their bank account in just 10 days, Novavax's 2024 financial outlook is looking a lot brighter. They're now projecting revenues between $970 million and $1.17 billion – a serious boost for a company that's seen its share of financial turbulence.

Novavax might have been down for the count, but they're not out of the fight. With Sanofi backing them up, they've got a real shot at becoming a major player in vaccine innovation again.

For investors, this could be a chance to get in on the ground floor of a comeback story that could be the stuff of legend.

May 16, 2024/by april@madhedgefundtrader.com

October 31, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
October 31, 2023
Fiat Lux

Featured Trade:

(A SEA OF POSSIBILITIES)

(PFE), (MRNA), (NVAX)

October 31, 2023/by april@madhedgefundtrader.com

A Sea of Possibilities

Biotech Letter

In the cutthroat world of pharmaceuticals, Pfizer (PFE) seems to be having a bit of a moment. And not the kind you'd want to experience yourself. With shares flirting dangerously close to their 52-week low, investors are left scratching their heads. Is this a rare stock market sale, or is Pfizer showing us warning signs?

Pfizer, a leader in the biotechnology and healthcare world, is currently wrestling with the whims of COVID-19 product sales, resulting in a not-so-insignificant 40.7% shrinkage in share value year to date. The Big Apple-based giant is feeling the heat, with revenues taking a hit and the company's crystal ball now showing a less rosy sales and profit forecast for 2023.

But let's not get lost in the sea of stock market blues. After all, Pfizer is no one-trick pony.

The company has actually been busy beefing up its portfolio with some promising assets. I’m talking Oxbryta for sickle cell disease and Nurtec ODT for those pesky migraine headaches. And let's not forget the potential show-stoppers in their pipeline: the respiratory syncytial virus vaccine Abrysvo and the mid-stage weight loss/diabetes drug Danuglipron. These could very well be the next big things in pharma.

Still, the numbers don't lie. Pfizer's second quarter showed a 54% year-over-year drop in revenue to $12.7 billion, and earnings per share took a 77% hit, plummeting to $0.41. And yes, there's the looming patent cliff, threatening to push 11 of its drugs, including heavy hitters like Eliquis, Ibrance, and Xeljanz, off the financial ledge by 2030.

But before you jump ship, consider this: Pfizer's not just sitting around waiting for the other shoe to drop. Aside from its potential blockbusters, it has a pipeline bursting at the seams with 90 programs, 23 of which are in the final stage of trials. And it’s planning to launch a whopping 19 new products in the next year and a half. Not too shabby, right?

Now, let's talk about FDA approvals. Pfizer's been collecting them like a kid collects baseball cards. Just recently, it added Velsipity for ulcerative colitis and a combination therapy for non-small-cell lung cancer to their collection. It's clear Pfizer is not just resting on its laurels.

In the vaccine arena, Pfizer, in collaboration with BioNTech (BNTX), is making waves with their combination vaccine trials. And they're not just dipping their toes in the water; they're diving in headfirst, ready to take on competitors like Moderna (MRNA) and Novavax (NVAX). It's another vaccine race, and Pfizer is in it to win it — again.

Then there's the $43 billion cherry on top: the acquisition of Seagen (SGEN). This move will inject some serious oncology magic into Pfizer's portfolio and contribute a hefty chunk of change to their revenue stream in the coming years.

Then, there’s the company’s dividend. Pfizer's not stingy when it comes to sharing the wealth. It has upped its quarterly dividend to $0.41 per share, marking 14 years of consecutive increases.

So, what's the verdict? Is Pfizer a sinking ship or a stock market treasure waiting to be discovered? The short-term might be a bit rocky, but Pfizer's long-term game looks strong. With a diversified portfolio, a robust pipeline, and a commitment to innovation, Pfizer is poised to ride out the storm and come out on top.

While the waters might be turbulent now, Pfizer's got the goods to navigate through and come out stronger on the other side. For the savvy investor with an eye on the future and a stomach for a bit of volatility, this pharma leader just might be the hidden gem you've been searching for. So, grab your financial compass and set your sights on Pfizer. It's time to dive in and discover the treasure that awaits.

October 31, 2023/by april@madhedgefundtrader.com

February 7, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
February 7, 2023
Fiat Lux

Featured Trade:

(AN ICONIC BLUE-CHIP PHARMA SELLING AT A DISCOUNTED PRICE)
(PFE), (MRNA), (NVAX), (BNTX), (LLY), (NVO)

February 7, 2023/by Mad Hedge Fund Trader

An Icon Blue-Chip Pharma Selling At Discounted Price

Biotech Letter

Pfizer (PFE) possibly contributed more than any other business in getting the world back to normal from the pandemic. It was rewarded with an impressive windfall courtesy of its twin COVID-19 programs: the blockbuster vaccine and the top-selling treatment, Paxlovid.

However, the world has already stopped fretting over COVID. As expected, Pfizer is paying the price for this turn of events. Sales of its COVID blockbusters are estimated to decline by more than 60% in 2023 after raking in a total of roughly $57 billion in 2022.

The company projects that Comirnaty vaccine sales would fall from $37.8 billion in 2022 to $13.5 billion in 2023, while Paxlovid would drop from $18.9 billion to $8 billion. After all, the United States and several countries already have massive stockpiles of the Pfizer vaccine and Paxlovid, recorded under the 2022 revenue. It would take until June 2023 to work through them.

In effect, Pfizer and other COVID plays like Moderna (MRNA), Novavax (NVAX), and BioNTech (BNTX) have fallen out of favor.

Still, Pfizer remains positive about the future of its COVID franchise. The company anticipates that 24% of Americans, or about 79 million, will get a COVID vaccine in 2023. In comparison, 31% or roughly 104 million, received the vaccine in 2022. Pfizer also expects to sustain its dominance, with a 64% market share for the vaccine alone.

Moreover, Pfizer has a robust pipeline—and pipelines are the driving force behind drug stocks.

With mRNA technology's momentum, Pfizer is optimistic about its combined flu-COVID vaccine. The company foresees around 132 million Americans lining up for this two-disease vaccine, which it hopes to launch by 2026.

Shifting the discussion away from COVID, Pfizer estimates non-COVID revenue to increase by 6% annually through 2025, then projects a similar trajectory or better every year through 2030 to hit at least $70 billion.

Announcing these projections is a bold move, especially since Pfizer faces one of the most significant patent cliffs starting 2025 to 2028. Several top-selling treatments, which generate roughly $17 billion in yearly sales, will lose patent protection and face generic competition.
Pfizer is aggressively filling these anticipated voids with acquisitions, including three exciting companies: Global Blood Therapies, Biohaven Pharmaceuticals, and Arena Pharmaceuticals.

In 2022 alone, the company spent $26 billion, which granted Pfizer access to promising drugs for sickle-cell anemia, migraines, and ulcerative colitis.

By 2030, the company projects these and its subsequent acquisitions to generate at least $25 billion in annual revenue. This means it’s still on the lookout for more acquisitions.

Actually, the company estimates that it’s just 40% on the way to hitting its target of $25 billion in 2030 revenue coming from acquired treatments. This means the company would most likely spend another $50 billion in acquisitions to reach its goal.

In terms of its internal pipeline, Pfizer’s candidates can rake in at least $20 billion in sales by 2030. Some of its key launches include vaccines for the flu, meningitis, and respiratory syncytial virus (RSV). It also has treatments targeting blood cancer and atopic dermatitis.

Meanwhile, its oral diabetes and obesity products, which are currently in clinical trials, have the potential to generate roughly $10 billion in annual sales. If approved, these would allow Pfizer to go head-to-head against Eli Lilly (LLY) and Novo Nordisk (NVO).

Overall, Pfizer is an “iconic, blue-chip company” that’s on a discount these days. It is down roughly 15% this 2023, offering an excellent window for investors who want to buy the stock.

The company trades for 13 times its estimated earnings in 2023 and yields 3.7%, which is over double the S&P’s dividend rate. With this payout, along with its solid earnings and one of the best balance sheets across the industry, Pfizer looks incredibly safe.

However, it’s essential to be realistic. Pfizer’s goal is to go through this year minimally unscathed. Although its performance in 2022 was impressively strong, with revenue surging to a whopping $100 billion compared to $42 billion in 2020, the year 2023 is a reset period for the business.

February 7, 2023/by Mad Hedge Fund Trader

August 2, 2022

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
August 2, 2022
Fiat Lux

Featured Trade:

(A RISING TIDE LIFTS ALL BOATS)
(MRNA), (PFE), (NVAX), (SNY), (BNTX)

August 2, 2022/by Mad Hedge Fund Trader

A Rising Tide Lifts All Boats

Biotech Letter

Moderna (MRNA) shareholders have one major worry in recent months: that the biotech company’s billion-dollar COVID-19 vaccine sales will eventually dry up.

After all, roughly 67% of the US population has already been fully vaccinated. Hence, it’s not surprising for investors to wonder whether the company’s glory days are over.

As a result, Moderna’s share price has taken a hit. The stock has slipped by over 35% so far in 2022. However, this looks more like an overreaction rather than a response to anything the company has done.

If anything, it seems that investors have read the situation wrong since Moderna recently received a billion-dollar vaccine dollar from the US.

The deal isn’t for the original version of its COVID-19 vaccine though. Instead, it’s for an updated booster candidate that targets the original coronavirus and the emerging omicron BA.4 and BA.5 strains.

Moderna will receive $1.74 billion to supply the US with 66 million doses of the updated booster. This means the price per dose would be $26.36.

This pricing is lower than the deal with Pfizer (PFE) for a similar booster, which had an implied price per dose of $30.48. In total, Pfizer is set to receive $3.2 billion for 105 million doses.

Nevertheless, this new Moderna contract shows a substantially higher price compared to the previous deal wherein the US paid $3.3 billion for 200 million doses.

That particular deal implied that the price per dose of the vaccine was at $16.50. in comparison, Pfizer’s vaccine was priced at $24 per dose.

A probable explanation for this disparity in pricing is the fact that Moderna received approximately $1 billion in funding from the US government courtesy of its Operation Warp Speed program. Meanwhile, Pfizer refused to participate in such a scheme.

Taken together, Moderna and Pfizer are slated to deliver 171 million doses of the updated booster by fall and winter.

Admittedly, those won’t be sufficient to cover the entire US population. This is why both contracts have options that would allow the government to add 300 million doses each as needed.

In terms of delivery, Moderna announced that its candidate should be ready for the fall vaccination campaign by the end of August.

Outside its coronavirus vaccine efforts, Moderna has a promising pipeline of candidates. To date, the company has 46 programs under development including personalized cancer vaccines.

Of these, Moderna has three candidates queued for Phase 3 trials. All of them are investigational vaccines. One is for the flu, another is for the respiratory syncytial virus (RSV), and the third targets the cytomegalovirus (CMV).

The flu vaccine has competition in Sanofi (SNY) and possibly Novavax (NVAX). However, there are no CMV and RSV vaccine candidates in existence.

Needless to say, getting the green light from the FDA for one or both of these vaccine candidates would be a massive win for Moderna.

More importantly, the company would hold the precious first-to-market competitive edge.

Another exciting candidate is Moderna’s collaboration with Vertex Pharmaceuticals (VRTX). The two are working on an inhaled candidate treatment for patients with cystic fibrosis.

Considering that Vertex is practically a monopoly in this space, its partnership with Moderna could mean a potential game changer in the industry.

Overall, Moderna’s lucrative deal with the US government could be indicative of another exciting period for coronavirus vaccine stocks.

After all, a rising tide lifts all boats.

Moreover, this group had the best performers on the market in the past years. Novavax skyrocketed by 2,700% in 2020 following the announcement of its COVID-19 program. BioNTech (BNTX) jumped by 600%, while Moderna climbed by an impressive 1,200%. Even Pfizer reaped rewards from its coronavirus candidate as it rose by 59% during the same period.

While these vaccine stocks won’t likely repeat their stellar performances, there are still several investment opportunities involving these companies.

The key is to choose a business that does not simply depend on its coronavirus vaccine gains but also leverages the opportunities to expand and diversify its portfolio.

This is what Moderna has been doing. With numerous programs in its pipeline, the company has turned itself into a multi product business that offers stability and growth. Investors eager to add a vaccine stock in their portfolio should buy the dip.

August 2, 2022/by Mad Hedge Fund Trader

May 26, 2022

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
May 26, 2022
Fiat Lux

Featured Trade:

(WAITING FOR THIS BIOTECH TO STOP MONKEYING AROUND)
(INO), (BVNKF), (EBS), (JNJ), (PFE), (MRNA), (BNTX), (AZN), (NVAX), (REGN), (QGEN)

May 26, 2022/by Mad Hedge Fund Trader

Waiting for This Biotech to Stop Monkeying Around

Biotech Letter

Almost immediately after US President Joe Biden advised that “everybody” should be concerned over the new worldwide outbreak of the monkeypox virus, the shares of biotechnology and healthcare companies working on monkeypox treatments and vaccines started to rise.

Shares of Danish company Bavarian Nordic (BVNKF), the only monkeypox vaccine developer approved in the US, were up 5.8% in premarket following the announcement.

Bavarian Nordic’s vaccine, called Jynneos, uses a live version of the smallpox virus, which has been altered so that it no longer can replicate in the recipient’s body or cause any infection.

Instead, it has been engineered to activate the immune system and prepare the body’s defenses to fight off smallpox and monkeypox viruses.

Based on data from Africa, two shots of Jynneos, administered 28 days apart, recorded up to 85% in terms of efficacy against monkeypox.

In 2019, Jynneos received regulatory approval from the US FDA for both smallpox and monkeypox.

Aside from Bavarian Nordic, shares of Emergent BioSolutions (EBS) also rose by 11.8% following Biden’s announcement.

While Emergent has no vaccine specifically for monkeypox, it has a smallpox vaccine that can be used to prevent monkeypox.

It can be recalled that Emergent BioSolutions has been an exiled ticker after the US Congress launched an investigation on the manufacturing issues in its Bayview Facility in 2021.

Although the company has managed to clean up that mess and is back to working with Johnson & Johnson (JNJ) to produce COVID-19 vaccines, EBS has yet to return to investors’ good graces.

While the scale of the threat has yet to be determined, the US has secured contracts for Jynneos and Emergent BioSolutions’ vaccine and is already stockpiling in case of an outbreak.

What’s curious, though, is that another company has benefited from this announcement despite not having any monkeypox or even smallpox vaccine candidates.

Inovio Pharmaceuticals (INO) shares rose by 12.2% following the announcement—a surge that couldn’t be adequately explained since the company has no relevant product and does not seem to have any program even remotely linked to this potential outbreak.

As far as I can tell, the last time Inovio even mentioned monkeypox was in 2010 when it discussed a potential experiment on a vaccine that could protect nonhuman primates against the virus. However, nothing came out of that plan either.

If Inovio sounds familiar to you, it’s probably because it was one of the frontrunners in the early days of the COVID-19 vaccine race.

However, it eventually lagged behind the likes of Moderna (MRNA), Pfizer (PFE), BioNTech (BNTX), and AstraZeneca (AZN).

One primary reason for this is the FDA’s decision to suspend Inovio’s Phase 3 trial in late 2020, with the study only resuming sometime in 2021.

As if that’s not enough, Inovio also faced some internal battles following the resignation of its CEO.

Now, the company has shifted gears and plans to offer its COVID-19 candidate as a booster shot instead of a primary vaccine.

The change of plans regarding the COVID-19 vaccine might be disappointing for some, but it’s essential to be realistic about expectations.

At the moment, the vaccine landscape has been dominated by Pfizer and Moderna, with AstraZeneca and Johnson & Johnson gaining ground as well.

Just recently, another challenger joined the fray: Novavax (NVAX).

Needless to say, the COVID-19 vaccine market is becoming crowded, and the competition is getting more intense.

Considering that Inovio has yet to catch up with the development of its candidate, it would be unwise to challenge the already established developers dominating the market today.

Hence, offering its COVID-19 candidate as a booster would provide it with higher marketability since health experts encourage people to mix and match their vaccines.

Outside these efforts, Inovio is a leader in developing DNA plasma-based vaccines. Before the pandemic, the company had been working on an extensive pipeline using this technology.

One of the most promising DNA-based vaccines from Inovio is VGX-3100, which targets an HPV-triggered disease called cervical dysplasia. Simply, this is a pre-cancer condition.

Inovio’s candidate is the first-ever DNA-based treatment that reached Phase 3 trials and reaped positive results.

This is an exciting development, especially in light of Inovio’s partnership with Qiagen (QGEN), as the two can leverage their work to determine which patients are at risk.

Basically, Inovio and Qiagen might just be on the verge of coming out with a preventive vaccine for cancer.

If things go according to plan, the data should be released by the second half of 2022. In terms of price, VGX-3100 is expected to cost roughly $10,000.

Aside from these, Inovio is also collaborating with Regeneron (REGN) to develop a cure for glioblastoma, an incredibly aggressive type of brain cancer. So far, Phase 2 trial results look promising, and the partners are on their way to progressing to Phase 3.

Inovio’s pipeline covers many DNA vaccines targeting infectious diseases and cancers. Most are still in the early phases of development.

While the programs in Phase 2 and 3 trials are promising, I think it’s still too early to predict whether Inovio is truly capable of delivering on its promises.

I know that Inovio shares look like such a bargain these days, especially if the company ends up receiving regulatory approvals in the coming months, but I’m not yet fully convinced.

Overall, Inovio is worth considering right now. It’s definitely on my list.

But before I commit, I’d like to see at least whether the company’s COVID-19 and HPV pipelines can move past the latest headwinds and advance to the next levels.