An enormous medical win for mid-sized biotech Vaxcyte’s pneumococcal vaccine is giving Pfizer a run for its cash, besting the blockbuster shot Prevnar 20 in a research that Mizuho analyst Salim Syed yesterday referred to as “the very best case state of affairs with zero misses.”
And when a little bit vaccine maker with no marketed property faces a pharma large — and wins — it’s sufficient to spur a change in fortunes. Shares of Vaxcyte opened yesterday up greater than 33% from Friday’s shut, whereas Pfizer’s inventory took a dip.
Right here’s what occurred: In a section 1/2 research of Vaxcyte’s pneumococcal shot referred to as VAX-31, the vaccine gave sufferers a big immune response for all 31 varieties of the virus it addresses. That included non-inferiority to all 20 of the categories Pfizer’s shot incorporates, in response to Syed’s notice to purchasers, which is about 95% of these inflicting illness.
The Prevnar franchise, which incorporates each Prevnar 20 and the sooner Prevnar 13, has held a “near-monopoly” on the $8 billion pneumococcal house for greater than 20 years, Syed stated in a notice final month. Final 12 months, the vaccines made $6.4 billion in income for the corporate.
The outcomes have garnered acclaim from analysts throughout the board, touted as “tremendous clear” and a “clear win” by Mizuho’s Syed and a “grand slam readout” by Cantor Fitzgerald analyst Louise Chen, who additionally noticed large upside for Vaxcyte’s future.
“We predict the [pneumococcal vaccine] alternative, together with different vaccines in Vaxcyte’s pipeline … may enhance Vaxcyte’s market cap from about $8 billion as we speak to about $20 billion throughout the subsequent a number of years,” Chen stated yesterday in a notice to purchasers.
Apart from Pfizer, the outcomes from Vaxcyte may additionally throw a wrench into Merck & Co.’s plans for its newly accepted pneumococcal vaccine Cabvaxive, which covers 21 varieties of the virus, nonetheless 10 fewer than VAX-31.
‘A profound shift’
Vaxcyte CEO Grant Pickering didn’t mince phrases when it got here to VAX-31’s potential affect as he spoke to buyers yesterday morning, calling the outcomes “a profound shift for the pneumococcal vaccine class” that exceeded expectations.
“The unprecedented outcomes from the … grownup section 2 program validated our underlying speculation and set the stage for VAX-31 to doubtlessly remodel the class,” Pickering stated. “We imagine VAX-31 is positioned to set a brand new customary of care with the broadest protection and to boost the bar on immunogenicity — these outcomes give us confidence we are able to keep away from the tradeoffs that different sponsors have required to make to chase protection.”
If VAX-31 is accepted following a deliberate section 3 trial, it “has the potential to obtain preferential suggestion by the [CDC’s Advisory Committee on Immunization Practices], which may translate into billions of {dollars} of gross sales to Vaxcyte, and this may permit Vaxcyte to successfully compete with its bigger counterparts,” Chen stated.
Whereas the vaccine business has traditionally comprised pharma giants like Pfizer, Merck, GSK, AstraZeneca, Sanofi, Johnson & Johnson and China’s Sinovac, smaller firms have been making extra of a mark in recent times, significantly with the rise of latest applied sciences.
“We predict the [pneumococcal vaccine] alternative, together with different vaccines in Vaxcyte’s pipeline … may enhance Vaxcyte’s market cap from about $8 billion as we speak to about $20 billion throughout the subsequent a number of years.”
Louise Chen
Inventory analyst, Cantor Fitzgerald
The COVID-19 pandemic boosted mRNA firms Moderna and BioNTech to the stratosphere, they usually now have the capital and clout to chase different infectious targets like flu that have been monopolized by just a few of the larger gamers in a long time prior, or newer ones like RSV. Even those that fell brief through the pandemic, like CureVac, have a number of flu vaccines within the works utilizing mRNA.
Like mRNA did for these once-smaller biotechs, Vaxcyte’s broad-spectrum know-how has allowed the corporate to get within the ring with the heavyweights. By incorporating a safety mechanism that preserves the essential motion of the vaccine within the physique, the know-how does the job with “half as a lot protein as typical vaccines,” in response to the corporate. This method additionally permits them to suit extra virus sorts into one shot.
“At the moment marks a serious milestone on the trail towards doubtlessly going past what some other firm has achieved on this subject,” Pickering stated.
