Shares of the Gaithersburg, Maryland company were surging 65.67% to $222.02 at last check.
Novavax said a Phase 3 trial of its Covid-19 vaccine candidate known as NVX-CoV2373 showed 89.3% efficacy against the disease, including against the fast-spreading U.K. variant. But it was found to be less effective against an emerging South African variant.
The study also found that being infected once with the virus did not seem to give automatic protection from being infected again, according to Bloomberg.
Jefferies analyst Kelechi Chikere, who reiterated his buy rating on the stock, said in an investors note that "efficacy against the much talked about South Africa variant strain came in at 60%, which has significant implications for all the vaccine companies and the potential/size of an endemic market."
"With these results in hand, we think NVAX will be able to file for emergency use authorization (or its equivalent) in multiple territories," Chikere added.
Novavax's vaccine candidate, the analyst said, is shipped and stored at normal refrigeration, which is more convenient than other effective vaccines such as Moderna's (MRNA) - Get Moderna, Inc. Report and Pfizer's (PFE) - Get Pfizer Inc. Report that have to be either shipped or stored under freezer conditions.
A Guggenheim analyst said “SARS-CoV-2 is here to stay,” noting the variants and the finding about prior infections.
J.P. Morgan analyst Eric Joseph raised his price target on Novavax to $295 from $215 and said "on the whole, we believe the data are highly impressive and pave the way forward for NVX-CoV2373 as an approvable as well as commercially competitive vaccine product."
With respect to the issues with the South African variant, Joseph, who rates the stock overweight, said he didn't believe "the outcome gives specific reason for pause with NVX-CoV2373."
"Perhaps the more consequential takeaway from the SA trial, in our view, is the lack of protection provided by prior COVID-19 infection, suggesting a wider and more durable vaccine market opportunity on the road to reaching and maintaining herd immunity," the analyst said.
Meanwhile, Cantor Fitzgerald analyst Charles Duncan raised his price target on Novavax to $248 from $211 and kept an overweight rating on the shares, noting enhanced conviction about a differentiated clinical and logistics profile for NVX-CoV2373.