After providing investors with a number of clinical updates, Novavax (NVAX -2.13%), a clinical-stage biotech focused on vaccines, saw its shares decline 24% as of 11:45 a.m. EDT on Tuesday.
Here's a review of the key highlights from the company's big announcement:
First, Novavax said that its phase 3 Prepare trial -- which is studying its respiratory syncytial virus candidate, RSV F Vaccine, in infants via maternal immunization -- continues to progress. The company said that it is actively enrolling patients at 80 sites in 11 countries.
Second, the company said that a post hoc analysis of its failed phase 3 RSV F trial in older adults and other data showed that the vaccine "was associated with a 61% reduction in hospitalizations due to chronic obstructive pulmonary disease (COPD) exacerbations." As a result, Novavax plans to study this association further by kicking off a phase 2 efficacy trial in older adults next year that will use COPD exacerbations as an endpoint.
Finally, the company announced top-line data from its E205 trial. This phase 2 study was designed to measure the potential benefits of using an adjuvant formulation of the RSV F Vaccine and to judge the effects of using a two-dose regimen. The data showed that adding an adjuvant "significantly increased the magnitude, duration and quality of the immune response relative to a control of 135 microgram dose of the RSV F antigen alone." In addition, the trial also showed that delivering the drug using a two-dose regimen also led to clinical gains. Management said that the data support the use of the adjuvanted formulations and two-dose regimen in future clinical trials
While these updates are largely positive, traders clearly feel that they are not exciting enough to warrant a higher share price. As a result of that disappointment, shares have fallen back to where they stood before their big spike last week.
While Novavax continues to make progress in the clinic, there's no doubt that time is not on the company's side. Despite letting go of 30% of its workforce last year, the company still lost $43.9 million in the first quarter of 2017 alone. While the company held more than $211.2 million in cash on its books as of March 31, that number is likely to dwindle quickly in the coming quarters as its clinical trials progress. With its share price down so much and $316 million in notes payable on its balance sheet, Novavax will likely have difficulties finding new sources of capital. For that reason, I plan on keeping Novavax's stock far away from my portfolio.