A clear example of why it's so incredibly urgent to enact AI regulations and deploy safeguards immediately. Think about what a system that is a million times smarter than us would do in this case . . .

I do these posts to test my thesis, so I welcome feedback of any kind, including thoughtful criticisms. Thank you!

The main risks are clinical (i.e. possible safety issue), an underwhelming appreciation for hMPV need (maybe I’m wrong?), future dilution to support large studies, and competition from other vaccine developers.

In conclusion, $ICVX is in a very enviable strategic situation for a biotech. They are 1) fundamentally undervalued. 2) have a strong competitive lead in a potential blockbuster indication, 3) have plenty of cash (>$250 M), and 4) have strong proof of concept data.

Importantly, *The Virologist* (RA Capital) has a 12% stake in the company. I find it hard to believe RA would place such a concentrated bet on a vaccine with a weak peak sales opportunity. Vivo, Logos and TCG crossover are nice new additions from the recent offering.

But once RSV is being addressed by multiple vaccines, RSV health burden will diminish, and there is a greater chance hMPV “stands out” as a high burden respiratory illness identified by health systems. This awareness could increase as $ICVX nears commercialization in a few years.

This comes full circle to the main thing holding the stock back. It isn’t fundamentals, it’s awareness; of hMPV as a health burden, of the company because it’s not big pharma, and because RSV and pneumococcal has taken all the attention in the vaccine space recently.

Early data looks promising, and early vaccine titers / GMFRs tend to be predictive of future efficacy. $ICVX could be sold for $7-10B in a few years (current valuation ~$500M). Or it could be partnered earlier, after Phase 2, given the synergy of a large partner for P3 trials.

With a considerable health burden for both RSV and HMPV, why wouldn’t HCPs use the bivalent in lieu of a monovalent RSV? The seasons are similar, and durability of A12 could also be better than current vaccines. The potential to cannibalize RSV players is very underappreciated.

I could see this dynamic resulting in an additional $1B in sales due to a combination of premium pricing and greater penetration driven by the fact that this is a more sensible vaccine delivery solution than monovalent RSV for adults.

I also think $ICVX could be a highly sought-after partner / takeover target because of the ability for BP to enhance the market potential. The health burden is real, but the market would be best built by a company with a lot of marketing firepower to improve awareness.

I think it’s reasonable to assume $ICVX’s bivalent A12 hMPV / RSV vaccine could be a $2B peak sales product, especially if bought or partnered by big pharma, primarily due to the quality of their data to date, and their significant lead in hMPV vaccines.

Arguably, this estimate could be much higher, because it doesn’t account for the potential for IVX-A12 to take share in the RSV market. Let’s look at this last point in more detail.

Overall, this leads me to believe hMPV in adults is a real health burden, and could be 50% or more the size of RSV. RSV has multiple heavy-weights duking it out for a $10B + market by 2030 (70-80% adult). So how big could hMPV be?

In comparison, we had previously reported the incidence of influenza A and RSV in this group at 10.5% and 9.6%, respectively.”

Over 3 years, average annual rates of hospitalization were 15.01, 9.82, and 11.81 per 10 000 county residents due to RSV, HMPV, and influenza, respectively.”

From this NIH study; “Respiratory syncytial virus was detected in 31 participants (6.1%); hMPV was detected in 23 (4.5%) patients; and influenza was detected in 33 (6.5%) patients. …

According to this NEJM study, hMPV is about 1/5 to 1/3 the burden of RSV in young children, (similar to Influenza). While this is still a viable market, the company is rightfully focusing on older adults as the larger opportunity.

From this JAMA study on hospitalizations for acute respiratory tract infections in adults; “During the 4-year period, hMPV infection was identified in 118 of 1471 illnesses (8.0%), 56.1% of which were RT-PCR positive...

Let’s explore hMPV. I think this is where the market is having trouble assigning a higher valuation; because of lack of awareness and little attention placed on hMPV. But just because there is little awareness doesn’t mean it’s not a significant health problem.

Recently the company showed promising titers / GMFRs as initial proof of concept for their bivalent vaccine IVX-A12 for RSV and hMPV. This will be in phase 2 studies in mid-2023. This is the main value driver; hMPV has no approved vaccines and $ICVX is in the lead.

Icosavax has a Virus-Like-Particle platform which may have advantages in terms of longer vaccine durability and the ability to have more multivalent vaccines. Monovalent RSV data showed decent durability but we should know more (12 month data) in a few months.

Biotech Idea of the day: $ICVX. Icosavax is a low-profile vaccine player that has the potential for attractive long term appreciation due to its strong strategic positioning and the scarcity value of its hMPV vaccine.