In early pandemic days, Novavax (NASDAQ: NVAX) shares soared as buyers wager on the corporate’s means to carry a coronavirus vaccine to market. However because the biotech fell behind within the race and commercialized its vaccine later than anticipated, the shares suffered. Earnings additionally weren’t as vibrant as buyers had hoped, as a result of this late market entrance. Shifting ahead, the corporate aimed to carry a doubtlessly game-changing product to market: A mixed coronavirus and flu shot.
Rival Moderna can be engaged on such a vaccine, however with virtually half of the U.S. grownup inhabitants usually going for an annual flu shot, the mixed flu/COVID vaccine market gives potential for a couple of participant. Nevertheless, current information represents a setback for Novavax’s mixed vaccine candidate. The U.S. Meals and Drug Administration (FDA) ordered a short lived halt to this system and to the corporate’s stand-alone vaccine candidate this previous week — and Novavax shares slid virtually 20% in a single buying and selling session.
How dangerous is that this information for Novavax? Let’s discover out.
Picture supply: Getty Photographs.
Novavax’s mixed vaccine program
Novavax has introduced collectively its coronavirus vaccine with its experience in flu to create a candidate that might shield individuals from each flu and COVID for the season. This may very well be notably enticing to those that commonly go for flu vaccines, as a result of it gives them safety in opposition to two viruses with only one shot. About 45% of grownup People went for a flu vaccine over the past season.
Moderna lately reported constructive part 3 information for its mixed vaccine, so it is a step forward. If Novavax brings such a product to market even a bit later than Moderna, each corporations are more likely to carve out an attention-grabbing market share and pave their strategy to important recurrent income each flu season.
Novavax efficiently accomplished a part 2 trial of its candidate, and lately utilized to the FDA for authorization to maneuver on to part 3. However simply this week, the corporate mentioned the FDA positioned a scientific maintain on its software to maneuver ahead with a part 3 trial. This adopted a report of a severe antagonistic occasion — motor neuropathy — in a participant within the part 2 trial outdoors of the U.S. The participant obtained the vaccine in January 2023 and reported the occasion final month.
In a scientific maintain, the FDA halts additional improvement of a candidate whereas it investigates a selected challenge. As soon as the difficulty is resolved and the candidate is taken into account protected to be used, scientific improvement could proceed. Novavax issued an announcement saying it does not “consider causality has been established” for the participant’s antagonistic occasion, however the firm plans on working shortly and effectively to supply the FDA with all needed info.
A threat for Novavax
Clearly, this is not excellent news for Novavax — however how dangerous is it, precisely? It is not possible for us to foretell the end result of the FDA’s investigation, however we do know that no different circumstances of motor neuropathy have been reported in prior Novavax coronavirus and flu vaccine candidate trials. That is a constructive level. Nonetheless, the scientific maintain represents a threat for Novavax, because it’s delaying what might turn out to be a significant product for the biotech.
It is essential to remember, although, that Novavax is not relying solely on this candidate. It lately launched its newest coronavirus vaccine for the present season. The corporate mentioned it is accessible at main pharmacies throughout the U.S. Novavax may get a lift this time round as a result of its vaccine is accessible in double the variety of areas in comparison with final yr and is available in a prefilled syringe. This makes the vaccine simpler to search out and simpler to manage. After final yr’s disappointing vaccine season, it will likely be key to observe how this season progresses. Novavax additionally mentioned throughout its newest earnings report that it could unveil an “expanded scientific pipeline” by year-end.
So, what does all this imply for buyers? Novavax stays in a interval of uncertainty. We do not but know if the corporate’s income will achieve momentum throughout this flu season. We additionally do not know if the FDA scientific maintain will lead to a severe setback or a fast and innocent halt for the mixed vaccine program. All this makes the inventory a dangerous wager for most investors proper now, which means it is in all probability finest left in your watch checklist until you are an aggressive investor in search of a possible restoration story.
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Adria Cimino has no place in any of the shares talked about. The Motley Idiot recommends Moderna. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
