Biotech Values

[DewDiligence]

PCVX—(+38%)—reports phase-1/2 data for VAX-31, a 31-valent pneumococcal vaccine:

https://finance.yahoo.com/news/vaxcyte-reports-positive-topline-data-110700942.html

• At Middle and High Doses, VAX-31 Met or Exceeded Regulatory Immunogenicity Criteria for All 31 Serotypes

• At All Doses Studied, VAX-31 Was Observed to be Well Tolerated and Demonstrated a Safety Profile Similar to Prevnar 20

• For Adult Indication, VAX-31 Selected to Advance to Phase 3 Program; Vaxcyte Plans to Initiate Phase 3 Pivotal, Non-Inferiority Study by Mid-2025 and Announce Topline Safety, Tolerability and Immunogenicity Data in 2026

• For Pediatric Indication, in Parallel with Ongoing VAX-24 Study, Company Plans to Initiate VAX-31 Infant Phase 2 Study in First Quarter of 2025 Following IND Application Submission and Clearance –

In the adult segment of the pneumoccal vaccine market, PCVX intends to develop VAX-31 to compete against PFE’s Prevnar-20 and MRK’s recently approved Capvaxive (#msg-174674639). In the pediatric segment of the market, PCVX plans to compete against Prevnar-20 and MRK’s Vaxneuvance, but PCVX has not yet decided whether its candidate will be (24-valent) VAX-24 or VAX-31.

Currently, PFE’s Prevnar 20 has annualized sales of about $6B and MRK’s Vaxneuvance has annualized sales of about $800M, so this is a big market. (MRK’s Capvaxive launched too recently to have reported sales, but it is expected to take meaningful market share from Prevnar-20.)

PCVX’s product candidates (VAX-31 and VAX-24) look like strong offerings from a medical standpoint; however, PFE is developing a follow-on to Prevnar-20 (with an undisclosed number of serotypes), and hence PCVX will likely be facing stronger competition by the time VAX-31/VAX-24 come to market. In my opinion, PCVX is somewhat overvalued at an enterprise value of about $12B.