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The Flu Gives This Coronavirus Vaccine Stock A Surprising Edge

By Brian Orelli, PhD - Dec 5, 2020 at 8:17AM

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Combining vaccines for multiple viruses could boost sales.

The flu season coinciding with an uptick in the COVID-19 could complicate the pandemic. But Novavax ( NVAX -0.92% ) might actually benefit from the trend since the biotech has vaccines to protect against both the flu virus and the coronavirus.

In this video from Motley Fool Live recorded on Nov. 30, Healthcare and Cannabis Bureau Chief Corinne Cardina and Brian Orelli, contributor, discuss the potential benefits from combining the vaccines and how it could affect sales of the coronavirus vaccines.

Corinne Cardina: Flu season is a bit of a different animal this year with the coronavirus pandemic. I don't think it's anything like we've seen before. I got to talk to a few doctors on Fool live a couple of weeks ago, and they said that we could actually see fewer flu deaths this year because people are being more diligent, including hand hygiene, wearing masks, staying home, social distancing, and people might be more likely to get the flu vaccine this year in absence of a coronavirus vaccine, anything to stay healthy.

I think something that is top of mind is a stock called Novavax. Novavax has a technology that is using for a couple of different products in its pipeline. It has a NanoFlu product that has in clinical trial, shown to be superior compared to Fluzone, which is sold by Sanofi ( SNY -1.30% ). Brian, can you tell us a little bit about what NanoFlu is, and what its timeline is?

Brian Orelli: They use sort of microparticles and then they put the protein on the flu protein virus. It's not the whole virus, it's just part of the virus on the outside of the nanoparticles that helps the immune system recognize the protein as foreign and then create antibodies. They got Phase 3 data in March, and it showed that, as you said, it showed that it was better than Fluzone. They used antibody response as a marker for whether the vaccine worked or not.

Being in March, they missed the opportunity for this flu season, so they haven't really been in a big hurry to submit it to the FDA and approved because I think they're going to have to redo it probably every year, just like any other vaccine. I think that they are waiting for when the next set of flu viruses come through, then they'll make the decision on the vaccine. They've promoted somebody to lead the marketing, and that's where they are with that.

Corinne Cardina: Awesome. They actually said that it is possible that they could combine this flu vaccine if it's approved with its coronavirus vaccine candidate if that is approved. In theory, we could have one vaccine for both. Do you think that that could help Novavax take market share from Sanofi in the flu market? What do you think about this potential combination?

Brian Orelli: I think it probably only matters if we need the coronavirus vaccine post-pandemic. If the vaccine doesn't cover us for multiple years, then we probably would have to take it every year. Then, in that case, definitely that would be the case. But Sanofi also has a coronavirus vaccine. It's not quite as far along or maybe, it is about the same just as far along as Novavax. It's a more traditional protein-based vaccine, but it seems like they can combine theirs as well, their COVID and flu vaccines as well. So maybe not as big of an advantage for Novavax.

Corinne Cardina: What about the timeline? Where is Novavax on the COVID-19 vaccine? Are you hopeful about it?

Brian Orelli: Yes. They're running 15,000 participants study in the UK. Today, they announced they'd completed enrollment there, and they're looking for a readout in the first quarter of next year. Then they were shooting for launching a phase 3 study at the U.S. and Mexico by the end of November, which is today, and so they announced today that they missed that goal. Now they say it will start in the coming weeks. Sounds like they've start to setup to run the clinical trial. They have 100 sites set up, and some alternatives if they need them.

It sounds like the issue might be with manufacturing, so they want to use the same manufacturing scale that they're going to use commercially. Sometimes companies will use a smaller scale for clinical trials but then when you do that then the FDA wants you to prove that the stuff you use for clinical trials is the same as the stuff you're selling. Sometimes you can get away with just doing laboratory tests to prove that they are the same, but often times the FDA will make you do a crossover study where you gives half the people the stuff made with a small-scale and half the people with stuff with a large-scale so that they're the same. Now they're trying to avoid doing that and to do that, they need get their manufacturing all set up so that they can use the large-scale manufacturing.

As far as being hopeful, it's a different technology than the mRNA technology from Moderna ( MRNA 1.74% ) and BioNTech ( BNTX 3.17% ) and it's different from the adenovirus technology from AstraZeneca and Johnson & Johnson. As I said, it uses nanoparticles. It's hard to know for sure, definitely, in fact that the flu vaccine worked, means that the technology seems to be working. As long as they pick the right coronavirus protein to put on the outside of the nanoparticles, I think it's likely that they'll get protection.

Corinne Cardina: Awesome. Novavax, as an investment, is a little bit different from the big companies like Pfizer and Johnson & Johnson. It's a little bit different from Moderna, which has seen its stock up over 400% this year. What do you think of Novavax as a potential investment for investors who are risk-tolerant and somewhat knowledgeable about the biotech industry?

Brian Orelli: I think it's a better valuation. I think I've been asked previously, if I had to buy one, which one would I buy? I think it would probably be Novavax just based on the valuation. It's a $8 billion market cap compared to Moderna, which is $50 billion, and BioNTech, which is $26 and a half billion. The biggest risk is that they're behind the leader, so both Moderna and BioNTech are filing emergency use authorizations where Novavax, as we talked about, still waiting for their data. The question is whether later is a big issue, it's hard to tell because you don't know what the coronavirus vaccine market's going to look like in the long term. If the leaders are able to get a majority of the people vaccinated, then it will be more difficult for Novavax to come on to the market. But again, the efficacy and safety are also going to be in a play here.

Corinne Cardina: Awesome. We will keep an eye on Novavax for sure.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Novavax, Inc. Stock Quote
Novavax, Inc.
$160.48 (-0.92%) $-1.49
Sanofi Stock Quote
$47.07 (-1.30%) $0.62
Moderna, Inc. Stock Quote
Moderna, Inc.
$306.72 (1.74%) $5.23
BioNTech SE Stock Quote
BioNTech SE
$344.06 (3.17%) $10.57

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