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Overlooked Covid-19 Vaccine Runners Up Defended by Wall Street

June 4, 2020, 6:42 PM

Don’t give up hope for Novavax Inc. and Inovio Pharmaceuticals Inc., Wall Street analysts said after the two failed to appear on a Trump administration list of Covid-19 vaccine developers picked for Operation Warp Speed.

The pair slid more than 10% on Wednesday following a New York Times report saying that the White House’s list included larger drugmakers such as AstraZeneca PLC, Johnson & Johnson, Merck & Co. and Pfizer Inc., but not the pair of small-caps.

Bloomberg reporting shows that two other, as yet unnamed, companies have also been selected for the U.S. government’s effort. An official announcement is expected within weeks.

Read more: White House Works With Seven Drugmakers in ‘Warp Speed’ Push

One analyst thought Inovio must be one of the missing finalists from the White House’s effort. “INO-4800 is more-than-likely on the short list of remaining vaccine candidates,” Stifel’s Stephen Willey wrote, pointing to safety and immunogenicity results expected by the end of the month as well as Inovio’s “competitive advantages.” The Plymouth Meeting, Pennsylvania-based company’s experimental vaccine, INO-4800, uses part of the virus’s DNA to trigger an immune response.

“WARP Speed finalists may not be final” and the initial list may be short-sighted, Cantor Fitzgerald analyst Charles Duncan said. “Show me the data,” he said, noting the vaccine developers mentioned were “high-profile, large pharma candidates, all of which lack significant clinical experience.”

Duncan expects that different approaches to developing an immunization against Covid-19 will be needed and saw both Inovio and Novavax’s candidates as good options, though neither has yet to commercialize a product. He gives Inovio and Novavax buy-equivalent ratings.

The two U.S.-based biotechs are each working on one of the 10 vaccines for Covid-19 currently being tested in humans, according to the World Health Organization. More than 120 others are being tested in animals. Also in the clinical stages of vaccine development, but not mentioned in the Bloomberg or N.Y.Times reports, are Chinese vaccine developers Sinovac Biotech Ltd., CanSino Biologics Inc. and SinoPharm Group Co., all three of whom are conducting human trials of vaccines.

Read more: Vaccine Nationalism Puts Global Advocate on Covid Front Line

Moderna Inc., another unproven vaccine developer that’s working on an RNA-based immunization, was selected. The Cambridge, Massachusetts-based biotech has been working with the National Institutes of Health since the start of the pandemic and is already backed by more than $400 million in federal funding. One problem with Moderna’s and other rival’s methods will be cold storage and finding enough facilities to house their vaccines. That’s not a problem for Novavax’s protein based approach or Inovio’s DNA-based platform, Cantor’s Duncan said.

Novavax is not without backers. The biotech secured $388 million in May, the single largest grant from the Coalition for Epidemic Preparedness Innovations (CEPI) at the time. Inovio has received $17 million from the Oslo-based group.

Another blow to confidence in untested vaccine developers came on Thursday after AstraZeneca secured $750 million from CEPI and Gavi, the Vaccine Alliance, a non-profit organization.

Prominent makers of vaccines such as Sanofi and GlaxoSmithKline Plc, were also notably absent from the White House list. Operation Warp Speed is headed up by Moncef Slaoui, a former Glaxo executive.

Inovio fell as much as 4.3% Thursday. Novavax rose as much as 5.5% before paring most of those gains.

Inovio and Novavax didn’t immediately respond to emails seeking comment.

To contact the reporter on this story:
Cristin Flanagan in New York at cflanagan1@bloomberg.net

To contact the editors responsible for this story:
Catherine Larkin at clarkin4@bloomberg.net

Scott Schnipper, Steven Fromm

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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