Vaxcyte Inc. (PCVX:NASDAQ) released data on the use of VAX-24 in the Phase 2 trial's age 65 and up subgroup, and they "look compelling," reported BTIG analyst Dr. Thomas Shrader in an April 17 research note. VAX-24 is the biotech's lead, broad-spectrum, 24-valent pneumococcal conjugate vaccine (PCV) candidate, being evaluated to prevent invasive pneumococcal disease.
"Based on what we see, the VAX-24 results look more than good enough to drive the recommendation of the Centers for Disease Control's Advisory Committee on Immunization Practices (ACIP) to immunize adults over 50, and we see this recommendation to be the biggest value driver for the story," Shrader wrote.
The current market opportunity for PCV is already "huge," added Shrader. However, it would be expanded, and in a significant way, were the ACIP to broaden its universal PCV recommendation (currently for adults 65 and up).
Attractive Potential Return
BTIG has a Buy rating and a US$69 per share target price on Vaxcyte, currently trading at US$42.57.
The difference between these prices reflects a potential 89% return for investors in the company.
Immune Response, Safety Shown
In the Phase 2 study in adults aged 65 and older, VAX-24 demonstrated robust opsonophagocytic activity (OPA) immune responses for all 24 serotypes at all three doses investigated, Shrader relayed.
The analyst emphasized that with 2.2 micrograms (2.2 mcg) of VAX-24, immune responses were at least an estimated 30% better than PCV20 when compared to data from the prior Phase 2 study in adults ages 50 to 64. PCV20 is the current standard of care for patients over age 65.
"There is no reason to think this [30%] estimate won't hold up for any antigen tested if you test enough patients," the analyst added.
These data bode well for approval of VAX-24, which has fast-track status in the U.S., and for the ACIP lowering its recommended minimum age for getting a PCV. Vaxcyte plans to advance the 2.2 mcg dose to Phase 3.
Shrader also pointed out that "a new vaccine doesn't need to be 'better' or rigorously superior for all serotypes to be approved. It needs to be non-inferior against most serotypes but also bring some new coverage."
VAX-24 does this, he noted, and according to full six-month safety data, has a favorable tolerability and safety profile.
"The Phase 1/2 data derisked VAX-24 by 'hitting' on every serotype included in the vaccine (superior on 20, non-inferior on four)," added Shrader.
What's Next for Pipeline
This year, catalysts are expected with three of Vaxcyte's vaccine candidates, Shrader noted and listed the events. Regarding VAX-24, the company expects to receive feedback from vaccine regulators in H2/23.
Also, within that same time period, Vaxcyte is slated to submit an investigational new drug (IND) application for VAX-31, its 31-valent PCV, for use in adults (though it is being evaluated for use in infants as well).
Sometime this year, Vaxcyte should hear back on its IND filing for VAX-A1, its vaccine candidate for group A strep in adults and infants.
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Disclosures For BTIG Research, Vaxcyte Inc., April 17, 2023
Analyst Certification: I, Thomas Shrader, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report. I, Sung Jun Hong, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report.
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