On Wednesday, Leerink Partners reiterated its Outperform rating and a $135.00 price target on shares of Vaxcyte (NASDAQ:PCVX). The firm's analysis followed Vaxcyte's operational expenditure report, which indicated a slight increase over estimates, with expenses totaling $140 million compared to the anticipated $137 million. The company's progress with its pipeline, including the upcoming VAX-24 Phase 2 infant data expected at the end of the first quarter of 2025, was noted as a key development to monitor.
Leerink's commentary highlighted competitive dynamics within the pneumococcal conjugate vaccine (PCV) market, referencing recent disclosures by Pfizer (NYSE:PFE) and GlaxoSmithKline (NYSE:GSK), neither of which are rated by Leerink. Pfizer mentioned a greater than 30-valent (V) PCV under preclinical development during its October 29 call, a move perceived as defensive in light of Vaxcyte's promising VAX-31 results and the potential threat to Pfizer's Prevnar vaccine. Leerink also pointed out that Pfizer's early-stage efforts and its novel adjuvant technology might not be suitable for infants, a significant market segment for PCV.
Furthermore, GlaxoSmithKline's October 30 call revealed the discontinuation of its 24-valent PCV in adults while continuing to evaluate it in a Phase 2 trial for infants, with an estimated primary completion in July 2026. GSK also announced intentions to initiate a Phase 1 trial for its greater than 30-valent PCV vaccine in adults in 2025, with aspirations to extend it to infant populations.
In terms of financials, Vaxcyte reported having $3.3 billion in cash, cash equivalents, and investments as of September 30, which includes net proceeds of $1.4 billion from a follow-on offering in September. Leerink has updated its financial model for Vaxcyte to reflect the third-quarter results and maintains its Outperform rating and $153 price target for the company's shares.
In other recent news, Vaxcyte has been the subject of significant attention due to promising developments. The company's lead vaccine candidate, VAX-31, has shown potential to be more efficacious than existing options, according to data presented by the Advisory Committee on Immunization Practices. This has led to favorable analyst reports from BTIG, TD Cowen, Mizuho (NYSE:MFG), and BofA Securities, all maintaining positive ratings and raising their price targets for Vaxcyte.
Vaxcyte has also completed a significant public offering, raising approximately $1.5 billion which is expected to support the continued development of its vaccine candidates. This funding initiative was managed by several financial institutions, including BofA Securities, Jefferies, and Goldman Sachs & Co. LLC. Furthermore, the company has made changes to its corporate structure with the recent appointment of John P. Furey to its Board of Directors.
The company's vaccine candidate, VAX-31, has demonstrated promising results in Phase 1/2 trials, leading to increased price targets by several firms. The vaccine has been shown to provide broader protection against invasive pneumococcal disease compared to current market leaders. Vaxcyte plans to progress VAX-31 into Phase 3 trials for adult indication by mid-2025.
InvestingPro Insights
Vaxcyte's financial landscape, as revealed by InvestingPro data, offers additional context to Leerink Partners' analysis. The company's market capitalization stands at $13.3 billion, reflecting significant investor confidence despite current profitability challenges. InvestingPro Tips highlight that Vaxcyte holds more cash than debt on its balance sheet, aligning with the reported $3.3 billion in cash and investments mentioned in the article. This strong liquidity position is further supported by the tip indicating that liquid assets exceed short-term obligations, providing Vaxcyte with financial flexibility to fund its ongoing research and development efforts.
The company's stock performance has been impressive, with InvestingPro data showing a 122.92% price total return over the past year and a 61.99% return over the last six months. This robust performance underscores investor optimism about Vaxcyte's pipeline potential, particularly its VAX-24 and VAX-31 candidates mentioned in the article.
However, it's important to note that Vaxcyte is not currently profitable, with a negative gross profit of $75 million in the last twelve months. This aligns with the InvestingPro Tip stating that analysts do not anticipate the company to be profitable this year. The substantial operating loss of $577.16 million reflects the significant investment in research and development typical of biotech companies in the pre-revenue stage.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Vaxcyte, providing a deeper understanding of the company's financial health and market position.
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