Actions of VBI vaccines (NASDAQ: VBIV) were up 45% as of 11:18 a.m. EDT Thursday after rising to 62% earlier in the session. The huge jump came after Raymond James analyst Steven Seedhouse shifted the stock from outperformance to a strong buy and raised his price target from $ 8 to $ 9.
Analysts upgrades usually help stocks – and smaller biotech stocks in particular. But the huge payoff for VBI vaccines is certainly out of the ordinary.
The main reason investors are so excited stems more from the analyst’s comments than from the upgrade itself. Seedhouse said in a note to investors that VBI’s COVID-19 vaccine candidate “could be the best vaccine of all (including all of the first to come and members of Operation Warp Speed).” The research note added, “VBI may be at a totally different stage for potency compared to any other vaccine we’ve seen. ”
If this take is right, VBI could eventually become the leader among all drugmakers with new coronavirus vaccines in development. It’s important to note, however, that Seedhouse’s optimism is based solely on preclinical data. Clinical tests in humans do not always produce results similar to those seen in preclinical tests.
Investors shouldn’t have to wait too long to find out how VBI’s COVID-19 vaccine performs in clinical trials. The company has selected two candidate vaccines to move into a phase 1/2 clinical study. Assuming VBI receives the green light from the FDA, the study will likely begin at the end of 2020.