Ladenburg starts Evaxion Biotech at buy; PT $23

Ladenburg Thalmann initiated coverage of Evaxion Biotech A/S (NASDAQ:EVAX) with a “buy” rating and $23 price target. The stock closed at $7.08 on March 1.

Evaxion is a clinical-stage artificial intelligence (AI)-immunology platform company developing personalized neoantigen (neoAgs) vaccine therapy for cancer and prophylactic vaccines for bacterial and viral diseases, “at a faster speed and lower cost than conventional approaches,” writes analyst Wangzhi Li, Ph.D.

It has developed three proprietary AI-powered platforms: PIONEER for neoAgs cancer vaccine development; EDEN for prophylactic bacterial vaccine development; and RAVEN for rapid vaccine development response to coronaviruses and other viruses.

Dr. Li said Evaxion currently has two neoAgs cancer vaccines, EVX-01 and EVX-02, in ongoing Phase 1/2a clinical trials for various cancers, with an upcoming data report in the first half of 2021. A third neoAgs cancer vaccine, EVX-03, is expected to make a regulatory filing in second half of 2021.

Preliminary Phase 1 dose escalation for the first five patients treated with EVX-01 in combination with a PD-1 showed induction of neoAgs-specific T-cells in 100% of patients and a “high prediction success rate with 80.5% of PIONEER-predicted neoepitopes-induced reactive T-cells in the five patients,” Dr. Li pointed out.

In addition, three out of the five patients achieved an objective response, including one long-lasting complete response. “While a small patient size, these initial clinical results appear highly encouraging and provide initial clinical validation of the strong performance of Evaxion’s AI-powered PIONEER platform,” he added.

Evaxion is also applying its EDEN platform to develop vaccines for various bacterial diseases and expects to file an IND of the lead program, EVX-B1, in the second half of 2022 as prophylactic vaccine for the prevention of Staphylococcus aureus infection, which presents a large unmet medical need and market opportunities globally, Dr. Li said.

Overall, given the current approximate $140-million market cap and under-recognition of Evaxion after its recent IPO, “we see attractive value creation and upside potential over time for Evaxion stock, with also upcoming key near-term potential catalysts in the first half of 2021,” he added.