BCRX and NVAX receive positive news

Leerink Swann, an investment bank specializing in biotech and life science companies, upgraded their price target on BCRX from $5 to $10, on an estimated Emergency Use Authorization order of $394 million for US stockpiling of the anti-viral Peramivir. The report was curious in the exact amount of $394, as the specificity could be a telegraph that an order is imminent. In any case, longs have been anticipating EUA for weeks, so the waiting game continues, as longs and shorts battle for positioning.

NVAX received good news this morning, according to an article in Indian Times. Cadila, a NVAX partner for their vaccine-like particle (VLP) flu vaccine, announced they are the first pharma company to produce a vaccine for the novel H1N1 virus in India. NVAX, in addition to receiving milestone payments, will receive 20% royalties on sales of the vaccine in India, meaning revenue from the Cadila partnership will go directly to NVAX's bottom line, as Cadila picks up all clinical development costs. Approval is expected by the end of this year. See previous blogs for NVAX value proposition and our investment thesis, mainly higher vaccine yields, faster vaccine production, and lower in-border manufacturing costs. All of these benefits are due to not needing eggs to produce the VLP vaccine. Under- and un-developed countries will greatly benefit due to faster ramp and lower cost structure, as well as the ability to control domestic manufacturing capacity. They won't be held hostage to foreign healthcare resources.

In fact, in a bit of irony, with India fast-tracking NVAX's VLP vaccine, the US may be on the outside looking in if vaccine production falls short. That would be a travesty considering NVAX is a US supplier of vaccines. This is another shameful example of the FDA dragging their feet, partly due to insidious pressure from incumbent big pharmaceutical companies to impede progress of promising competitive solutions from innovative upstarts like NVAX.