What happened
Shares of Novavax (NVAX 5.47%) were sinking 12.8% lower as of 12:05 p.m. EDT on Monday. The decline came after Reuters reported that Novavax plans to begin delivering COVID-19 vaccine NVX-CoV2373 to the European Union near the end of 2021 but most of its commitment of up to 200 million doses won't be shipped until next year.
So what
There's good news and bad news with Reuters' report. The good news is that Novavax appears to be close to finalizing a major supply deal with the EU. The company reached a preliminary agreement with the 27-member economic and political union in December. However, the deal wasn't finalized at that time because Novavax has experienced difficulties sourcing some raw materials.
Image source: Getty Images.
What's the bad news? Many investors were hoping that Novavax would see European sales for its COVID-19 vaccine sooner than late 2021 and 2022. With the biotech stock falling today, it's clear that the bad news is outweighing the good news in investors' minds.
At this point, neither Novavax nor the EU has officially commented on the supply agreement. However, European Commission President Ursula von der Leyen hinted in late April that a final deal with Novavax could be on the way. In the announcement of an imminent larger supply agreement with Pfizer and BioNTech, she stated, "We will certainly add other potential vaccines, for example protein-based vaccines have also quite a potential." Novavax's NVX-CoV2373 is a protein-based vaccine.
Now what
The most important thing Novavax needs to do now is to win Emergency Use Authorization (EUA) for NVX-CoV2373. The company has already initiated regulatory filings in the EU, U.K., Canada, Australia, and New Zealand.
