What happened
Shares of Novavax (NASDAQ:NVAX) were soaring 14.9% as of 3 p.m. EDT on Monday. The big jump came after B. Riley FBR analyst Mayank Mamtani boosted his 12-month price target on the biotech stock to $61 per share from $53.
So what
Investors should take analysts' price targets with a grain of salt. However, it's good to understand what influences analysts' thinking.
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In this case, Mamtani believes that Novavax's recently announced acquisition of Praha Vaccines will enable the small biotech to go head to head with larger drugmakers who are also racing to develop a COVID-19 vaccine. He also views Novavax's experimental COVID-19 vaccine as one of the most promising candidates in development. Mamtani stated that Novavax's NVX?CoV2373 has "the most extensive/differentiated preclinical data generated to date."
Novavax's acquisition of Czech-based Praha Vaccines for $167 million should enable the company to produce more than 1 billion doses of its COVID-19 vaccine candidate next year. The company is paying for this acquisition with the $388 million investment that Coalition for Epidemic Preparedness Innovations (CEPI) is making to fund its COVID-19 vaccine program.
Now what
The main thing to watch for now with Novavax is its phase 1 study of NVX?CoV2373. Novavax initiated this study last week and expects to report preliminary immunogenicity and safety results in July.
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