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What Investors Should Know About Novavax's South Korea Expansion

By Keith Speights and Brian Orelli, PhD - Updated Jun 25, 2021 at 2:55PM

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The company could have a bigger opportunity in the key Asian market.

Novavax (NVAX 2.00%) recently announced plans to expand its COVID-19 efforts in South Korea. In this Motley Fool Live video recorded on May 26, Motley Fool contributors Keith Speights and Brian Orelli discuss what the company intends to do in the important Asian market.

Keith Speights: Well, Novavax also had some real news, I think some hard news, that is something worth investors paying attention to anyway. The company over this past weekend signed a memorandum of understanding with South Korea and SK Biosciences to "explore the expansion of COVID-19 vaccine activities in South Korea."

Brian, what exactly does that phrase mean? Exploring the expansion of COVID-19 vaccine activities in South Korea and is this something that investors maybe should be excited about?

Orelli: Yeah. A memorandum of understanding is basically a framework for a contract. We'll have to wait and see the actual terms. Of course, as may not actually be disclosed because companies have some rights to keep things secretive. We may not ever get the terms. The companies already worked together to get Novavax's vaccine approved and manufactured and sold in South Korea. This new contract focus on vaccines for the variants.

Speights: I don't have the press release pulled up, Brian, but I think this deal could potentially include exploration of that COVID-19/flu combo vaccine that you and I have discussed some in the past.

Orelli: Yeah, I think that's a big and driving force for Novavax to be assuming that then coronavirus vaccine is going to be annual and the flu vaccine is already annual. Combining the two and then only having enough one-shot is certainly in everybody's best interests.

Speights: I'm not sure off the top of my head how big the South Korean opportunity is for Novavax. But I would definitely say it's not an insignificant one.

Brian Orelli: Yeah. I think it's a good move for them to partner versus going it alone. Because I think there's a lot of complexities in Asian regulatory agencies. I think that having somebody already established company there, makes a lot more sense than Novavax trying to do it on their own.

Speights: I would totally agree with you there. I think Novavax is a small clinical-stage biotech that hasn't had a lot of success really over the last several years until this came about with COVID-19. But the company seems to have done a pretty good job partnering with other companies to scale up its manufacturing capabilities and get into a position to commercialize its COVID vaccine.

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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