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Could Novavax Be Too Late to the Party to Win in the U.S. COVID Vaccine Market?

By Keith Speights and Brian Orelli, PhD - Mar 31, 2021 at 6:04AM

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Not necessarily.

Novavax (NVAX 4.18%) seems to be on its way toward winning U.S. Emergency Use Authorization (EUA) for its COVID-19 vaccine within the next few months. However, the biotech's vaccine is likely to be the fifth one available to Americans. In this Motley Fool Live video recorded on March 24, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss whether or not Novavax could be too late to the party to win in the U.S. market.

Keith Speights: One of our viewers, Maris, has a question, "When is the Novavax vaccine going to be approved?"

To me, there's a bigger story here that we can address with Maris' question. AstraZeneca appears to be in pretty good shape to still become the fourth vaccine to win Emergency Use Authorization in the U.S. even with the confusion over their efficacy results. Novavax did report great results from its U.K. late-stage study not too long ago.

When do you think they might win U.S. authorization? Brian, do you think Novavax could be too late to the party to be a winner in the U.S. market by being in fifth place?

Brian Orelli: I guess they're going to get data toward the summertime and then figure a month or maybe a little bit more between when they announced the data and when they might get Emergency Use Authorization. That's pretty late to get used in the U.S. We should have enough vaccine for all adults at least by the summertime.

But it doesn't really matter because the U.S. is already committed to buying hundreds of millions of doses. Those are going to get sold to the U.S., and then presumably donated to other countries. They did miss out on getting the extra doses. So Moderna and Pfizer like Novavax did the initial sale before they had an emergency authorization. But then the government came back and ordered more from Moderna and Pfizer. Novavax is also going to miss out on that, the U.S. government is going to buy more from Novavax.

Longer term, I think the clock has reset. The variants are likely to be a big deal. It seems that way. Novavax looks like it's in pretty good shape to compete in COVID 2.0 assuming it materializes.

The main reason it was behind was because it was due to setting up manufacturing before the Phase 3 clinical trial. That's why the data from the U.K. clinical trial ended up so much earlier than the US because they were setting up manufacturing in the US and then that delay started the clinical trials. Now that they have that setup, I think they're set up quite nicely to start testing variants, just like all the other companies at approximately the same amount of time.

They should get authorizations or approvals depending on how the FDA ends up setting it up for the variants at about the same time as the mRNA-based vaccines. Then Novavax also has a flu vaccine that could be used with the COVID boosters in one shot. That gives them a little bit of an advantage over Moderna who doesn't have a COVID vaccine.

Speights: I like how you put that, Brian, that over the longer term the clock has reset. I think that's important for investors to remember, and to think about how the dynamics play out during the pandemic this year, particularly.

But it's going to be a lot different going forward. If Novavax has the strong efficacy that we think it does, and like you say, if it comes out with the flu vaccine that could even combine with its COVID vaccine, this company could have a long life of growth. That's not a good way of putting it. But it could have plenty of room to grow if all goes well over the long run.

Orelli: I should point out, I'm a Novavax shareholder, so take my bullish stance [laughs] for what it is.

Speights: I suspect you would be saying the same thing even if you didn't own a share, Brian.

Orelli: Yeah.

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Stocks Mentioned

Novavax, Inc. Stock Quote
Novavax, Inc.
NVAX
$50.01 (4.18%) $2.00
AstraZeneca PLC Stock Quote
AstraZeneca PLC
AZN
$65.30 (1.26%) $0.81
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$50.39 (-0.55%) $0.28
Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$138.25 (1.46%) $2.00

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