This Danish Vaccine Maker Is a Leader in Monkeypox. The Stock Could Take Off.
Danish vaccine maker Bavarian Nordic is still in the trials stage with its Covid shot, making it a latecomer and dragging down its stock price.
But its smallpox vaccine, alone in having been approved for use against monkeypox, gives the Copenhagen-listed firm a virtual monopoly. This could make the shares a buying opportunity.
The stock (ticker: BAVA.Denmark) has tumbled from its March 2021 peak of 356 Danish kroner ($50.41) to a recent DKK243.
The company released midstage data at the end of last year for its Covid-19 vaccine, ABNCoV2. But it needs to surmount more research and regulatory hurdles. Bavarian Nordic also has failed to find a partner for its flu shot, which has the potential to be a blockbuster in many markets. Meanwhile, the company is raising funds for the Phase 3 study of its MVA-BN RSV vaccine candidate for respiratory syncytial virus.
On the upside, Bavarian Nordic has signed a number of deals for its Imvanex vaccine, which was originally developed to combat smallpox under the brand name Jynneos. The U.S. Biomedical Advanced Research and Development Authority (Barda) has authorized it for use in the U.S. and Canada as the only vaccine for monekypox, a viral infection endemic in some parts of the world.
The European Union’s drug regulator is now reviewing use of Imvanex for monkeypox, and the U.S. said it would expand the availability of the vaccine and broaden testing capacity.
The World Health Organization will soon decide whether monkeypox is a global health emergency. As of June 27, the Centers for Disease Control and Prevention puts the number of confirmed cases at 4,357 globally.
While Bavarian Nordic has jumped 41.3% over the past three months, the shares could have further to go. Demand has been strong—Barda has ordered 500,000 doses for 2022. The European Health Emergency Preparedness and Response Authority (HERA) has ordered 110,000 doses.
The number of new monkeypox cases “will need to be carefully monitored,” Frédéric Gomez, an analyst at Pharmium Securities, wrote in a note, adding that if cases rise and the company gets more orders for the vaccine, “it would not be surprising if Bavarian Nordic revises upwards the financial guidance provided.”
Analysts at broker Nordea estimate Bavarian Nordic shares could jump to a price target of DKK400. For the 2021 calendar year the company reported a loss before interest and tax of DKK313 million from a profit of DKK379 million in 2020. Sales were flat at DKK1.8 billion.
Chief Executive Officer Paul Chaplin said when reviewing annual results that Bavarian Nordic expects to launch its Covid vaccine in 2023, while the flu shot has a projected 2025 launch.
“At Bavarian Nordic, we are working tirelessly to make novel vaccines available to counter threats, whether big or small, thus helping to improve public health globally,” he told Barron’s in a statement.
Bavarian Nordic says it expects overall sales for the year—previously forecast for a range of DKK1.4 billion to DKK1.6 billion—to now reach DKK1.9 billion to DKK2.1 billion.
Monkeypox is less contagious than Covid, and the current global outbreak is likely to be brought under control by next year. But it’s endemic in Africa, so the need for vaccines will likely continue into the future.
There’s a good chance Bavarian Nordic will raise its fiscal year revenue guidance because “Jynneos is the best vaccine option based on its safety and efficacy profile,” Boris Peaker, an analyst at Cowen, tells Barron’s.