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Novavax to delay FDA submission and U.S. to pause funding for production of its vaccine
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- Novavax (NASDAQ:NVAX)shares continue to slide after the company reported that it expects to submit for emergency use authorization of its COVID-19 vaccine in the U.S. in Q4 2021, which was previously scheduled in Q3.
- The company plans to complete regulatory filing with the U.K. Medicines and Healthcare products Regulatory Agency in Q3.
- The Maryland firm earlier secured $1.75B federal contract (OWS Agreement) to support development of its COVID-19 vaccine. However, in its recent SEC filing, the company said that the federal government would not fund further production of COVID-19 vaccine until it resolves concerns of federal regulators about its work.
- In Form 10-Q, company said, "The U.S. government has recently instructed us to prioritize alignment with the FDA on our analytic methods before conducting additional U.S. manufacturing and further indicated that the U.S. government will not fund additional U.S. manufacturing until such agreement has been made."
- In a statement, the company also said that the U.S. government instructed it to continue with other work it had underway, including clinical trials.
- NVAX anticipates to complete additional regulatory filings in other markets in Australia, Canada and New Zealand within weeks of U.K. filing, including with the EMA.
- Filing of emergency use listing with the WHO is projected in August 2021.
- The company also submitted regulatory filings with the Drugs Controller General of India and regulatory agencies in Indonesia and the Philippines.
- NVAX missed analyst expectations for both top and bottom-line and is down 11.7% premarket following COVID-19 vaccine setback.
- Q2 revenue surged ~739% to $298M due to increased development activities relating to NVX-CoV2373 but net loss widened to $352M from $18M in the prior year.
- Novavax is on track to achieve capacity of 100M doses per month by the end of Q3 2021 and 150M doses per month by the end of Q4 2021.
- Net cash provided by operating activities for H1 2021 was $807M, compared to $93M for the same period in 2020. The increase in cash provided was primarily due to $1.1B in payments under advance purchase agreements recorded as deferred revenue and the timing of payments to third parties.
- As of June 30, 2021, Novavax had $2.1B in cash, cash equivalents and restricted cash, compared to $806M as of December 31, 2020.
- The company has completed enrollment of pediatric expansion of PREVENT-19 Phase 3 trial.
- During the quarter, NVAX announced preclinical data for NanoFlu/NVX-CoV2373 combination Vaccine (qNIV/CoV2373) and expects to initiate Phase 1 clinical trial in Australia later this year.
- Previously (Aug. 5): Novavax slides after delaying FDA submission for COVID vaccine
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Novavax: The Finish Line Keeps Getting Extended
Aug. 06, 2021 11:04 AM ETNovavax, Inc. (NVAX)AZN, JNJ, MRNA...25 Comments
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Summary
- Novavax has once again had to extend its timeline for seeking emergency use authorization from the FDA for its coronavirus vaccine, this time until the fourth quarter of this year.
- The Novavax vaccine likely avoids the rare, but very serious side effects from the other vaccines due to its use of saponins from the Chilean soapbark tree as an adjuvant.
- Once approved, the value of Novavax's stock should go significantly higher.
- In the long term, it is uncertain whether vaccine only companies like Novavax can continue to receive major investor support.
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Novavax (NVAX) is a company that has run into multiple problems including a series supply chain problems and manufacturing problems. The U.S. government gave the company 1.6 billion dollars as part of its Warp Speed vaccine program, but delays have worn on investors and those waiting for what might be the safest vaccine available.
Novavax is more likely to be approved in parts of Europe and Asia than it is to be approved in the United States (the latest timetable for the latter is some time in the fourth quarter). Novavax announced that the European Union will buy up to two hundred million doses of their vaccine the day before announcing the U.S. delay. The European Union announcement was probably a preemptive effort to try to deflect attention away from the bad news that the company knew was coming. That gambit appears not to be working.
Novavax is more likely to be approved in parts of Europe and Asia than it is to be approved in the United States (the latest timetable for the latter is some time in the fourth quarter). Novavax announced that the European Union will buy up to two hundred million doses of their vaccine the day before announcing the U.S. delay. The European Union announcement was probably a preemptive effort to try to deflect attention away from the bad news that the company knew was coming. That gambit appears not to be working.
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Novavax's vaccine has a few disadvantages and a few advantages over the vaccines currently being used in the United States and Europe. The Novavax vaccine is more expensive than the other vaccines. The company has promised to scale costs to the economic level of countries that purchase their vaccine. Given the different levels of wealth and poverty between countries and within countries and given different systems of public health care programs cost may still be a factor in terms of vaccine choices.
Novavax's adjuvant is a saponin from the Chilean soapbox tree. How much this resource can bear is still an open question (back story). Despite forest conservation laws that date back as far as the 1870s, Chile has decimated much of its native forests over the last century and a half. Since the mid-1970s the nation has replaced many of these forests with tree plantations (Chilean forestry policy). This may or may not be the fate of the Chilean soapbox tree. To put it more bluntly can the natural resource be sustained in view of the huge demand?
Another disadvantage for Novavax is that by the time that it reaches the market in the United States it is likely that somewhere between 70 to 80 percent of the United States population will have already been vaccinated. Much of the rest of the world will not be vaccinated, though, for quite a while longer. Investors, however, may look somewhat myopically at this and avoid investing in the company given how far it is behind its competitors in the United States.
Novavax does have several advantages over the mRNA vaccines. The first one which requires little explanation is that it can be stored in a refrigerator rather than having to be kept in extremely cold storage.
Another major advantage is that the vaccine seems quite effective against several variants (although it has not been tested against the Delta variant). It is also likely a safer vaccine than both the adenovirus vaccines from Johnson & Johnson (JNJ) and AstraZeneca (AZN), for instance, and the mRNA vaccines such as from Pfizer (PFE) and Moderna (MRNA). One reason for this is that the saponin adjuvant reduces the amount of spike protein that needs to be present to provide sufficient immunity against the coronavirus. Johnson & Johnson and AstraZeneca are working on trying to make their vaccines safer particularly by reducing the rare cases of serious and sometimes fatal blood clots (effort). Unfortunately, Pfizer and Moderna have declined to take part in this endeavor because they feel it would tarnish the reputation of their vaccines (even though the risk for clotting is present for all these vaccines: about one in every one hundred thousand first shots, with a mortality rate of about 20 percent).
Novavax's adjuvant is a saponin from the Chilean soapbox tree. How much this resource can bear is still an open question (back story). Despite forest conservation laws that date back as far as the 1870s, Chile has decimated much of its native forests over the last century and a half. Since the mid-1970s the nation has replaced many of these forests with tree plantations (Chilean forestry policy). This may or may not be the fate of the Chilean soapbox tree. To put it more bluntly can the natural resource be sustained in view of the huge demand?
Another disadvantage for Novavax is that by the time that it reaches the market in the United States it is likely that somewhere between 70 to 80 percent of the United States population will have already been vaccinated. Much of the rest of the world will not be vaccinated, though, for quite a while longer. Investors, however, may look somewhat myopically at this and avoid investing in the company given how far it is behind its competitors in the United States.
Novavax does have several advantages over the mRNA vaccines. The first one which requires little explanation is that it can be stored in a refrigerator rather than having to be kept in extremely cold storage.
Another major advantage is that the vaccine seems quite effective against several variants (although it has not been tested against the Delta variant). It is also likely a safer vaccine than both the adenovirus vaccines from Johnson & Johnson (JNJ) and AstraZeneca (AZN), for instance, and the mRNA vaccines such as from Pfizer (PFE) and Moderna (MRNA). One reason for this is that the saponin adjuvant reduces the amount of spike protein that needs to be present to provide sufficient immunity against the coronavirus. Johnson & Johnson and AstraZeneca are working on trying to make their vaccines safer particularly by reducing the rare cases of serious and sometimes fatal blood clots (effort). Unfortunately, Pfizer and Moderna have declined to take part in this endeavor because they feel it would tarnish the reputation of their vaccines (even though the risk for clotting is present for all these vaccines: about one in every one hundred thousand first shots, with a mortality rate of about 20 percent).
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The saponins in the Novavax vaccine may further reduce the oxidative stress and inflammation caused by the spike protein generally, and specifically reduce immune thrombocytopenia(unusual blood clotting). It is unclear how many remaining individuals would get the vaccine in the United States if they felt a particular vaccine was safe, especially for those already at high risk for immune thrombocytopenia (example). In any case, Novavax may still be able to carve out a part of the market by offering booster shots.
In the long-term, the company is working on a combination flu-coronavirus vaccine. Whether vaccine-centric companies can continue to draw broad-based investment support even with successful vaccines after the pandemic is hopefully over is difficult to predict. Novavax is likely to go down, then go up again, and then perhaps down again. It is difficult to time the market, because it is impossible to time when Novavax will actually get FDA emergency use authorization approval. Although hopefully for investors and those waiting for a better vaccine option; maybe in the fourth quarter, they finally will.
This article was written by
Lane Simonian
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In the long-term, the company is working on a combination flu-coronavirus vaccine. Whether vaccine-centric companies can continue to draw broad-based investment support even with successful vaccines after the pandemic is hopefully over is difficult to predict. Novavax is likely to go down, then go up again, and then perhaps down again. It is difficult to time the market, because it is impossible to time when Novavax will actually get FDA emergency use authorization approval. Although hopefully for investors and those waiting for a better vaccine option; maybe in the fourth quarter, they finally will.
This article was written by
Lane Simonian
1.6K Followers
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