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What Are the Odds That Novavax's Coronavirus Vaccine Is 90% Effective?

By Taylor Carmichael – Nov 22, 2020 at 5:59AM

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Pfizer and Moderna have reported vaccine efficacy of over 90%. What should Novavax investors expect?

Last week, Pfizer (PFE 1.40%) and BioNTech (BNTX 2.08%) announced positive results from the phase 3 trial for their coronavirus vaccine. The drug, BNT162b2, met all of the study's primary and secondary endpoints, with an incredible 95% efficacy rate. Out of a subset of 8,000 volunteers, 162 people in the placebo group contracted COVID-19, and only eight people in the vaccinated group did. 

Not to be outdone, Moderna (MRNA -2.66%) announced similar outstanding news. Ninety people in the placebo group tested positive for COVID-19, and only five in the vaccinated group. And finally, the vaccine named after the Russian satellite that was first in space -- Sputnik -- recently reported 92% efficacy.

Vials labeled Covid-19 Vaccine

Image source: Getty Images.

Of course the world is desperate for a COVID-19 vaccine. Is every vaccine going to be 90% effective? Will some vaccines fall short? What will happen if the vaccine from Novavax (NVAX 2.44%) is only 79% effective? Will that be high enough for FDA approval? Let's dig in.

mRNA drugs are rocking, so don't bother knocking

mRNA vaccines might be best-in-class. This approach differs from a traditional vaccination, in which an inactive, non-infectious version of the virus in question is given to patients whose immune systems then respond to the "antigens," or "spike proteins," on the outside of the virus. mRNA vaccines, on the other hand, provide the body with a specific messenger RNA molecule that has been engineered to express the same spike proteins; the patient's immune system responds the same way, but no actual virus is required.

Using mRNA technology, scientists can find drug candidates very quickly and get the drugs into clinical trials at startling speed. We've seen that from the very start, with mRNA drugs sprinting to an early lead as other vaccines racing to catch up.

It's possible that the mRNA vaccines are not just speedy, but qualitatively better than other vaccine candidates. The Russian vaccine cuts against this theory -- it's not an mRNA drug. On the other hand, some observers believe the Russian positive data is actually politicized science. Even the name of the vaccine, Sputnik, has a political history ("first in space!"). So if we discount the Russian vaccine, maybe the mRNA vaccines have already won this vaccine race. Maybe these vaccines won the sprint (first to finish) but also the marathon (best-in-class).

Certainly in the U.S., the spectacular early results of the mRNA vaccines have raised the bar on what level of efficacy we might expect from our coronavirus vaccines. The U.S. Food and Drug Administration (FDA) gave guidance that it wants to see, at a minimum, 50% efficacy levels. But now with two drug companies announcing over 90% efficacy, it's possible the agency will raise its review target to something higher, like 70%, and reject vaccines that don't reach that level. 

Why not require every vaccine to be 90% effective? Well, the mRNA vaccines have distribution issues. The Pfizer vaccine needs to be stored at minus 94 degrees Fahrenheit. But more importantly, the announced results are from data subsets. 44,000 people have been enrolled in the Pfizer study. We don't have the numbers yet from all the volunteers. As more data comes in, it's possible the efficacy rates might drop a bit. And different vaccines might have different results for different populations -- for instance, the elderly, who are a high-risk population.

Drawing of spike proteins on virus cells

Image source: Getty Images.

Maybe it's the spike protein

Early in the COVID-19 race, scientific researchers at the University of Texas and the National Institute of Health released the chemical structure of the spike protein of SARS-CoV-2, the coronavirus that has killed so many people. This coronavirus has many spikes that latch on to proteins in order to infect people. The theory is that by targeting the spike protein, as Moderna and other mRNA vaccine makers are doing, a vaccine can create antibodies that prevent this fusion.

Jason McLellan and Barney Graham at the US National Institute of Allergy and Infectious Diseases (NIAID) solved this problem with the MERS vaccine. What McLellan discovered, according to Chemical & Engineering News, is that adding two prolines to a vaccine's spike protein could make it more stable and more effective. This focus on the spike protein -- and the 2P mutation technique -- was widely adopted by several drug companies early in the race, including Moderna, Pfizer, Novavax, and Johnson & Johnson.

Another leading vaccine competitor, AstraZeneca (AZN -0.71%), also focuses on the spike protein. However, unlike its rivals, the company is not using the 2P mutation in formulating its vaccine candidate. AstraZeneca's trials were halted twice because of two serious adverse events.

In Moderna's press release announcing phase 3 success, CEO Stephane Bancel credited this NIAID research into the spike protein: "I want to thank the NIH, particularly NIAID, for their scientific leadership...that led to the discovery of the best way to make spike protein antigens that are being used in our vaccine and others."

Similarly, when Novavax CEO Stan Erck congratulated Pfizer on the company's success, he too mentioned the spike protein:

It's a remarkable effort on their part. And it's great for global health. It's great for the vaccine industry. And truly it's great for all the efforts of our colleagues developing a spike protein to stop the coronavirus pandemic. It shows that the vaccine will work, and congratulations to Pfizer.

Novavax has signed distribution deals with multiple countries to supply its COVID-19 vaccine, if the company's drug is approved by medical authorities. Overall, the biotech has lined up purchase agreements for 276 million doses of its vaccine. (That number does not include collaboration agreements with drug companies in India, Japan, or South Korea.) At a price point of $16 a dose (what the U.S. government paid to reserve 100 million doses), Novavax stands to make billions if its drug is approved. With its focus on the spike protein and its use of the 2P mutation technique, Novavax might enjoy similar efficacy levels as Moderna and Pfizer. But what's really important is FDA approval, not a 95% success rate.  

Taylor Carmichael owns shares of Novavax. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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