Is CureVac Stock Still a Buy Following Disappointing COVID-19 Vaccine Data?

If you’re going to be late to the party, at least don’t fall flat on your face as you enter the room.

In Thursday’s trading, shares of CureVac (CVAC) shed nearly half of their value, after the company’s Covid-19 vaccine candidate made an embarrassing late-stage entrance.

Specifically, in the Phase 3 trial of CVnCoV, an interim analysis of 134 Covid-19 cases showed the vaccine had an efficacy rate of 47%. Considering other already approved mRNA vaccines from Pfizer/BioNTech and Moderna showed efficacy rates in the mid-90% range, the data is particularly disappointing.

The German drugmaker said that 57% of the cases were from “strains of concern,” which Berenberg analyst Zhiqiang Shu says may cause “resistance to the vaccine and hence cloud our interpretation of the efficacy.”

However, there’s no getting around the fact the data is weak. “As far as we can tell,” Shu added, “the final data analysis with 80 more cases is unlikely to move the needle.”

That said, Shu thinks hope for potential regulatory approvals is “not entirely lost.”

Although the EMA’s (European Medicines Agency) requirement for approval is for the efficacy rate to be at least 50% and the lower bound of the 95% confidence interval to be more than 30%, the agency has not closed the door on vaccines with efficacy under 50% so long as the confidence interval is “above zero.”

“Considering the significant demand for a COVID-19 vaccine,” Shu said, “We think the EMA may be lenient.”

Further boosting hope is the fact CureVac management has said the EMA has shown its support by recognizing the “complexity of different variants” and recommended the company file its application with the final dataset. As such, following a final analysis, CureVac plans on completing its rolling submission to the EMA.

According to the analyst’s overall assessment, investors can now pick up shares on the cheap. Shu’s rating remains a Buy, while there’s also no change to the $123 price target. Following Thursday’s bloodbath, there’s ~116% upside potential, at least according to the analyst. (To watch Shu’s track record, click here)

Shu’s colleagues also see the share price recovering; the forecast is for one-year gains of 60%, given the average price target clocks in at $86.50. Rating wise, the analysts are split; Based on 2 Buys and Holds, each, the stock has a Moderate Buy consensus rating. (See CVAC stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.