Red Hot Novavax in talks with "half dozen" countries

This article was posted on Reuters Today about the future of Novavax.
Recent quote: NVAX Google Finance

Another great insight on the company's new vaccine technology was written by Mike Garza of BioMedReports.com and Seeking Alpha. Here is a link to that article titled:
Novavax's (Nasdaq:NVAX) VLP technology may be big news for mankind


Novavax in talks with "half dozen" countries-CEO
* Countries drawn to quicker, cheaper vaccine, CEO says
* Method 80 percent cheaper than egg-based flu vaccine

By Julie Steenhuysen

CHICAGO, Sept 8 (Reuters) - U.S. biotech company Novavax (NVAX.O) is in discussions with officials from several different countries looking for quick ways to make flu vaccines to protect their populations from swine flu and other potential pandemics, the company's chief executive told Reuters.

"We're talking with at least half a dozen countries if not more," Novavax Chief Executive Rahul Singhvi said in a telephone interview.

Although the clinical-stage biotechnology company does not expect to have a flu vaccine approved for use in the United States until 2012, it has already signed a licensing deal with Spanish drugmaker Rovi(ROVI.MC) and started a vaccine joint venture with Indian drugmaker Cadila Pharmaceuticals.

The World Health Organization predicts a third of the world's population -- roughly 2 billion people -- will eventually be infected with the new H1N1 virus, and has warned there is not enough production capacity to make vaccine for everyone.

Singhvi said the H1N1 pandemic has been a wake-up call for many governments who rely on foreign suppliers for flu vaccines. "A lot of these countries are finding out it is better to have control of vaccine supply within their own borders," he said.

He said the Rockville, Maryland-based company's technology, uses engineered bits of genetic material called virus-like particles or VLPs that mimic a flu virus. Vaccines based on VLPs can be made more cheaply in about half the time of old-fashioned vaccine methods, which use specially grown chicken eggs, Singhvi added.

Investors have embraced the stock. Since April, when the new H1N1 strain emerged, Novavax shares have risen more than 1,000 percent. The shares were up 29 cents in Tuesday's mid-afternoon trade on the Nasdaq to $5.81, up more than 1,000 percent off its 52-week low of 52 cents on April 2.

Some analysts, including Oppenheimer, cut their ratings on the company's stock to "perform" from "outperform" last week.

"They think the stock went up too much too fast," Singhvi said. "I think they're wrong, but that is for us to prove."

SIMILAR VACCINES

Several companies are working on vaccines that use similar technology. Novavax grows them in caterpillar cells, which are harvested and purified. The process is done in disposable, ready-to-use equipment.

While no flu vaccines made this way are licensed yet, VLPs have been used to make Merck & Co Inc's (MRK.N) cervical cancer vaccine Gardasil, which has been used in more than 7 million girls and women.

Singhvi, a former Merck vaccine researcher, estimates it could cost 80 percent less to build plants to make his VLP flu vaccine than conventional egg-based manufacturing facilities

"That has been attractive to other countries, and other companies in other countries, not only because it's cheaper, but also because the technology transfer is simpler," he said.

Developing a pandemic vaccine has been the company's focus since 2005, when it began making a vaccine for H5N1 avian flu. "This is not something we just started dabbling in because flu became a sexy thing," Singhvi said.

The company's seasonal flu vaccine has been through two rounds of mid-stage testing in humans. The company hopes to test its seasonal flu vaccine in the elderly this fall.

"We demonstrated our capability in this current pandemic by making H1N1 -- the novel swine flu strain -- within 4 weeks of identifying the strain and sent that to the CDC for testing," Singhvi said.

Those tests showed the vaccine protected ferrets -- which get human-like flu.

Novavax will seek approval to start human trials of its H1N1 vaccine in the fourth quarter, and it hopes to start late-stage trials in 2011. "The earliest we could get on the market would be 2012. That is under standard licensing conditions. But these are not standard times," Singhvi said.

"If the pandemic becomes very severe, I think whatever would need to be done, the U.S. government would do," he added, saying that other countries have expressed interest in a faster approval process.

Sinovac Biotech China's Premiere Vaccine Maker

Breaking news was reported Friday as Sinovac wins Beijing Public Health Bureau's bid to supply seasonal flu vaccine Anflu(R) to Beijing citizens on August 28, 2009. China-based Sinovac is one of four companies that won supplier contracts for seasonal flu vaccines. Sinovac (SVA) is China's premiere vaccine maker that focuses on the research, development, manufacture and commercialization of vaccines that protect against human infectious diseases. Current Vaccines produced by Sinovac include vaccines for Hepatitis A and B, Influenza, and H5N1(Avian Flu) pandemic flu for government stockpiling.

This is reminescent of Novavax's (NVAX) bid to supply Spain's vaccine for H1N1 swine flu. On June 30th 2009 Spanish officials committed €60 million to develop vaccines and establish the country's first vaccine plant to be built in Granada. This news sent the stock up 31% up 0.78 to 3.28. News from that can be found here titled Novavax in multi-million Spanish deal on vaccines. Since this announcement Novavax's stock has climbed to Friday's high of 5.89 +0.24.

Sinovac is a flourishing stock that was trading around 1.50 in April and month by month has a steady climb to today's 6.32 trade value. Q2 2009 saw 20.02M in revenue compared to 6.57M in Q1 2009. Gross profit rose to 16.25M with Net Income of 5.81M and a market cap of 268.12M. Sinovac has 46.70 million in current cash. Total Assets were 116.81M with Total Liabilities of 61.45M. Total Debt rose considerably to 26.30M.

But what about the future of Sinovac? I think that this year's flu season will not reach pandemic state as predicted but a slightly elevated outbreak status. I could be wrong but schools and the public will eventually start taking precautions to stop the epidemic. It will get bad but not as bad as the news is making it out to be. However, I do see the financials of this company improving and it could easily be trading around the 10-12 range during this flu season. However, after that it might drop considerably until the next pandemic arrives.

I think it would be a smart play to place a limit order on SVA at a discounted price and see if it falls a bit before investing right away. A note of caution before investing, there are another 10 Chinese drug companies that will obtain the flu strain samples "NYMCX-179A" from the WHO. China has a total of 11 drug companies that can produce seasonal flu vaccines, but Sinovac Biotech Company is the only one that can make pandemic flu vaccines. They are producing 5 million doses right now and under Pandemic status can produce up to 20 million doses.

A nice look at their previous pipeline and sales data from 2006 can be found here from China Analyst. Recent positive news from their current clinical trial can be found on News-Medical.net from August 19, 2009. The clinical trial is active currently and the estimated completion is January 2010. A closer look at the trial can be found on ClinicalTrials.gov as it is in Phase IV and is seeking approval for Swine Flu H1N1 influenza vaccine.

Another article on Swine Flu was published on USA Today titled US: 160M doses of swine flu vaccine due in Oct. from July 23, 2009. The article discusses Swine Flu vaccines due in October and the rush to get them to the public. It also mentions the state of the Flu season in the Southern Hemisphere.

Disclosure: Long SVA