Shares of Novavax (NASDAQ:NVAX) were sliding 6.7% lower as of 11:14 a.m. EDT on Tuesday. The decline came after the Australian newspaper The Guardian reported major delays with Australia's supply deal for Novavax's COVID-19 vaccine, NVX-CoV2373.
Novavax signed an agreement in January 2021 to supply 51 million doses of its COVID vaccine to Australia. The company planned to begin shipping doses in mid-2021. However, The Guardian reported that the schedule is being pushed back due to supply chain issues.
Most of the 51 million doses aren't expected until 2022 now, according to the newspaper. Only a relatively small number of doses of Novavax's vaccine will be shipped to Australia in the fourth quarter of this year.
This delay is forcing the Australian government to shift from its initial plan to use NVX-CoV2373 as a primary vaccine. In the meantime, the country will use Novavax's vaccine as part of its booster program and rely more on the vaccine marketed by Pfizer and BioNTech, according to The Guardian.
In Novavax's second-quarter update in May, the company stated that it expected to be able to produce 100 million doses of its vaccine per month by the end of the third quarter this year. It also anticipated increasing capacity to 150 million doses per month during the fourth quarter.
The reports that Novavax won't be able to ship the full 51 million doses ordered by Australia's government by the end of 2021 raise concerns about the company's ability to meet its previous production goals. It's not surprising that these concerns resulted in a pullback today for the vaccine stock.
The most important thing for Novavax is to secure Emergency Use Authorizations for NVX-CoV2373. The company has stated that it would file for these authorizations in the third quarter of 2021. It could give an update when it announces second-quarter results on Aug. 5.