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How Bad Is Novavax's COVID Vaccine EUA Filing Delay?

By Keith Speights and Brian Orelli, PhD - Updated Jun 26, 2021 at 11:07PM

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It's probably not as horrible as some investors feared.

Until recently, Novavax (NVAX 2.80%) predicted that it would file for Emergency Use Authorization (EUA) of its COVID-19 vaccine candidate in the second quarter of 2021. Now, however, the biotech has pushed back its anticipated regulatory filings until the third quarter. In this Motley Fool Live video recorded on May 12, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss the impact of this delay.

Keith Speights: Brian, let's jump into some of our healthcare topics. Some of the big stories over the last few days. One of the big ones is related to Novavax, ticker there is NVAX. Novavax announced on Monday that it's delaying the authorization filings for its COVID-19 vaccine. It's delaying the authorization filings in the US, UK, and EU. The company originally had said it would file in the second quarter of this year. Now, it's saying it's going to file in the third quarter of this year. Brian, how bad is this delay for Novavax?

Brian Orelli: In the US, I don't really see it as being that big of a deal. It already has a contract to sell to the US, and that wasn't going to get expanded. So the delay doesn't really matter, you're going to get paid no matter when they actually deliver the vaccines.

In the EU, we already knew the contract will get delayed with most of the doses delivered in 2022. This new news isn't really that big of a deal because they're still going to get authorized before they need to deliver most of those in 2022. The UK might be the biggest issue, but it's also the smallest of those three markets, so I'm not sure it's that big of a deal for Novavax over the long term.

Speights: Brian, do you think there is even a chance that this delay could impact Novavax's ability to secure some supply deals for 2022?

Orelli: I guess that's probably the biggest worry and probably the reason why the stock was actually down on this news. That's a little bit more concerning, I think, just because they seem to be having manufacturing issues, and so our government is going to be worried about them not being able to produce the vaccine. But they have the flu vaccine combined with the COVID vaccine.

I'm a shareholder and I still hold promise. I think it's a promising company, nevertheless, even with the manufacturing issues.

Speights: I asked that question with my personal view is that it probably won't impact Novavax. I think governments really do already know how promising the company's COVID vaccine is. My guess is that it really won't have a material impact on the company being able to secure supply deals going forward. But I think you're right, that was investors' worry and that's the reason why the stock dropped this week.

Orelli: I think it's probably a little hard to tell. Who knows what governments [laughs] are thinking? But I think that that could be a concern if governments are worried about manufacturing and Novavax being able to meet the terms of the contract.

Speights: I think I have an article out this morning. I wrote it earlier this week, but I think it published this morning. But if you read between the lines in terms of what the European Commission President is saying, it certainly sounds like they're leaning toward giving Novavax a big deal pretty soon. Some of the comments just certainly seemed to be hinting that Novavax is in line for a significant deal. We'll, of course, cover that when that news comes up.

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

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