NASDAQ:EVAX
READ THE FULL EVAX RESEARCH REPORT
Evaxion (NASDAQ:EVAX) is a clinical stage company that is making AI useful in the current environment by using the technology to develop new cancer-fighting vaccines. The company notes that it has demonstrated that it can identify, through the company’s AI models, novel targets within days, rather than the traditional years it commonly takes with standard drug discovery methods. The use of AI also allows the company to decrease the risk of failure as the technology filters out those results that may result in low efficacy or unacceptable toxicity.
The company announced that it has entered into an option and license agreement with MSD (which is the tradename of Merck & Co., Inc., Rahway, NJ) (NYSE:MRK) for two preclinical vaccine candidates. The company has collaborated with MSD in the past and we are pleased to see the relationship expand—as it will benefit both the company and potential patients. Under the terms of the agreement, Evaxion grants MSD the option to exclusively license two preclinical vaccine candidates: EVX-B2 and EVX-B3—the former of which is a protein-based candidate for gonorrhea and the latter targeting an undisclosed infectious agent. In return, Evaxion will receive an upfront payment of between $3.2 million and $10 million in 2025, the payment amount dependent on MSD exercising it option to license one or both candidates. The company also announced it will be eligible for development, regulatory and milestone payments with a potential value up to $592 million per product, as well as being able to receive royalties on net sales.
This announcement provided Evaxion with a cash infusion, while also further validating the company’s research and business models, which have been convinced of for some time.
We continue to believe Evaxion is at an inflection point and these announcements further indicate to us that the company is turning the corner, and we are starting to see the beginnings of what we believe will be a flow of positive data. Moving from a cash burn company, as we’ve discussed in previous writings, to one that is at least cash neutral, while seeing important trial results and collaboration announcements that validate the company’s process and AI technology should induce investors to start paying attention. If events for Evaxion continue to proceed along the lines as we’ve seen to this point, EVAX should start to rise in concert with the improving prospects. We urge investors with a modestly higher risk tolerance to take a look at EVAX at the current time, before even more potential market-moving news gets announced.
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