Analysts for Stifel and SVB Securities initiated coverage of HilleVax (NASDAQ:HLVX) with “buy” and “outperform” ratings, and price targets of $34 and $30, respectively. The stock closed at $9.50 on May 23.
The company’s most-advanced and only clinical-stage and wholly-owned vaccine candidate, HIL-214, which is currently in a recently-initiated Phase 2b development for the prevention of moderate-to-severe acute gastroenteritis (AGE) caused by norovirus in infants, “serves as the focal point of our investment thesis and valuation,” writes Stifel analyst Stephen Willey.
Norovirus represents the most common cause of virally-induced AGE worldwide and “we believe the burden of disease and direct/indirect healthcare costs associated with norovirus-caused AGE, which falls disproportionately on young children under the age of four and adults aged 65 and older, constitutes a compelling opportunity for widespread vaccination in those aforementioned at-risk populations,” he added.
Mr. Willey said HIL-214, a bivalent VLP-based vaccine candidate against the most epidemiologically-relevant norovirus genotypes, represents an optimal solution for addressing norovirus genetic/antigenic diversity and is clinically de-risked via safety/immunogenicity data already generated across nine clinical trials.
“We believe the recently-initiated Phase 2b infant trial will meaningfully de-risk a future path to HIL-214 registration in this target population, with efficacy data expected in the second half of 2023,” Mr. Willey said. “The opportunity in older adults represents a compelling/ significantly larger source of longer-term optionality within our model.”
SVB analyst David Risinger said HilleVax shares have traded down 41% post IPO vs. a 5% drop for the biotech BXI, likely due to market dislocation.
“We believe this provides an attractive entry point for investors as HilleVax’s $380-million market cap appears heavily discounted vs. our $1.2-billionn discounted cash flow-based valuation,” he added.
