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How Important Is Novavax's COVID Vaccine Manufacturing Deal With GlaxoSmithKline?

By Keith Speights and Brian Orelli, PhD - Apr 10, 2021 at 9:03AM

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The small biotech is getting critical help from a big pharma company.

GlaxoSmithKline (GSK -0.23%) has teamed up with several other companies to develop COVID-19 vaccine candidates. However, the big drugmaker is also helping support the manufacturing of Novavax's (NVAX -2.93%) COVID-19 vaccine -- a vaccine for which it was completely uninvolved in the development. In this Motley Fool Live video, recorded on March 31, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss how important this manufacturing deal with GlaxoSmithKline is for Novavax.

Keith Speights: Novavax -- the ticker there is NVAX -- announced this week that it's teamed up with GlaxoSmithKline -- ticker there is GSK -- to support the manufacturing of its COVID vaccine in the United Kingdom. GlaxoSmithKline is going to make up to 60 million doses, or to help make up to 60 million doses, there's a key there. How important Brian, do you think this news is for Novavax?

Brian Orelli: Glaxo isn't actually making the drug product, that's being done by Novavax's contract manufacturers which is Fujifilm Diosynth Biotechnologies, and Glaxo is actually just putting it in the bottles, putting the stoppers on, slapping on the label, putting in a box, and sending on its way, so that's called fill and finish. It's a routine step, but certainly, obviously, a necessarily one.

Then we've heard reports about Novavax having trouble sourcing supplies specifically for the fill and finish step, and so it seems like it could benefit Novavax substantially if those reports were true, that the main issue is that fill finish step and now they have a lot of help for the fill and finish.

This seems like the UK government got involved I think in this deal. It feels like this might be tied to the back and forth with Novavax and the EU contract. The drug is being made by a contractor in the UK, and then Glaxo, of course, is a UK company, and the plant that they're going to fill it in, is in the EU.

This may be the UK trying to keep the vaccine away from the European Union or at least keep the European Union from doing the last step in filling it, and not giving any back to the United Kingdom if they need it. I think there may be some government play here as well it's just Novavax gets a fill and finish contractor.

Speights: Brian, I'm shocked, shocked I tell you that you're saying politics could be involved here.

Orelli: Yeah.

Speights: [laughs] So this is good news for Novavax overall, right?

Orelli: Yeah, I mean, I would say. Definitely, I don't think Novavax had a way of building a plant and filling and finishing their own stuff that quickly as compared to just getting Glaxo to open up some space in their plant to do it. So yes, I think it's definitely good news for Novavax.

Brian Orelli, PhD owns shares of Novavax. Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends GlaxoSmithKline. The Motley Fool has a disclosure policy.

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Novavax, Inc. Stock Quote
Novavax, Inc.
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GSK Stock Quote
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