What happened
Shares of Novavax (NVAX 7.85%) plunged 19.6% on Friday after the biotech delayed its plans to seek emergency use authorization for its coronavirus vaccine candidate.
So what
Novavax had previously hoped to obtain regulatory clearance by May, before delaying its timeline to the third quarter. The company now expects to submit its application to the U.S. Food and Drug Administration (FDA) in the fourth quarter.
The delays have likely cost Novavax the potential for billions of dollars of sales, which have instead gone to rival vaccine makers like Pfizer and Moderna.
Novavax's stock price fell sharply on Friday. Image source: Getty Images.
Novavax CEO Stanly Erck told Yahoo Finance that the later timeline is due to production challenges. Novavax was instructed to work with certain manufacturers as part of Operation Warp Speed, a government-run program designed to accelerate the development of COVID-19 vaccines and treatments. One of those manufacturers is struggling with quality control issues, which has temporarily halted production.
Now what
Investors are understandably disappointed by these delays. However, the battle against COVID-19 is unlikely to be won this year. Health officials are warning that the disease could become endemic and that booster shots could be necessary to protect against new variants. Thus, the need for safe and effective coronavirus vaccines is likely to remain strong for the foreseeable future. So, if Novavax can obtain an emergency use authorization for its drug by the end of the year, it could still generate sizable vaccine-related profits in the coming years.
