BTIG Reiterates Buy Rating on Vaxcyte (PCVX)

BTIG analyst Tom Shrader reiterated a Buy rating and $160.00 price target on Vaxcyte (NASDAQ: PCVX).

The analyst comments "This recommendation by ACIP has been in the works for some time and was discussed briefly at the prior meeting with some questions as to which vaccines should be recommended (notes HERE and HERE). As we commented, VAX-31 removes those uncertainties as, based on the P2 data, the Vaxcyte lead vaccine is likely to be more efficacious than anything else available. As a result, it's not surprising that the VAX-31 serotype coverage was presented at the ACIP meeting (Exhibit 1). In other words, the ACIP decision seemed motivated by both the current medical need PLUS vaccines in the pipeline. Along these lines, a financial analysis was also presented for the $/QALY and these numbers seem high (Exhibit 2) relative to the accepted levels for a cost-effective intervention of $50,000-$60,000/QALY. These values were based on less-effective current vaccines, with less broad coverage and a cost >$250/dose — each of which might (perhaps, not cost) be improved by VAX-31. The ACIP recommendation needs to lead to a formal recommendation by the CDC to have a significant impact. However, this impact could be significant as a general age-based recommendation has much more impact than specific risk-group recommendations. For example, PCV20 is already recommended for the ~50% of people ≥50yo with a risk factor for invasive pneumococcal disease (ICD). However, this recommendation results in very modest use relative to people >65 where the broadbased recommendation exists. Risks to the story: with so much going well, the biggest unknown to the story seems to be patient-level safety data. We have seen a fair bit of population-wide data suggesting VAX-31 has similar safety to PCV20, but the details should be interesting. On the competitive front, we see none of the other vaccines in their current form as a real threat. The one innovation we have seen is the idea that the newer vaccine adjuvants might be used with PCVs. For Example, Novavax (NVAX, not rated) has added the idea to their recent slide deck. Adjuvants can improve T-cell help (the Vaxcyte secret sauce) but can also make vaccines less tolerable. We expect these ideas are being widely explored and early safety data should be reasonably telling."

For an analyst ratings summary and ratings history on Vaxcyte click here. For more ratings news on Vaxcyte click here.

Shares of Vaxcyte closed at $112.14 yesterday.

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