What happened
Shares of several companies involved in the development of COVID-19 vaccines sank this week. As of the market close on Thursday, Dynavax Technologies (DVAX -2.89%) stock had dropped 12%, and shares of Novavax (NVAX -0.95%) and Inovio Pharmaceuticals (INO -2.02%) were down 15.5% and 15.8%, respectively.
None of these companies announced any news this week. Instead, the stocks likely fell due to the decision by the Biden administration to push for third booster doses of messenger RNA (mRNA) vaccines made by Pfizer-BioNTech and Moderna. This move could increase the uncertainty about the future for COVID-19 vaccines that haven't yet reached the market.
Image source: Getty Images.
So what
Vaccine stocks, especially those of companies that don't have COVID-19 vaccines on the market, already tend to be highly volatile. The White House announcement this week about moving forward with third booster doses for mRNA vaccines only added to this volatility.
The U.S. Department of Health and Human Services (HHS) stated on Wednesday that booster shots for all Americans who have received the Pfizer-BioNTech and Moderna COVID-19 vaccines will begin the week of Sept. 30, 2021, pending completion of a review by the Food and Drug Administration (FDA). These third booster doses will be given eight months after an individual's second dose of the mRNA vaccines.
HHS also said that booster shots are anticipated for individuals who received Johnson & Johnson's COVID-19 vaccine. However, the agency stated that more data is expected within the next few weeks.
No one knows at this point how long any additional protection from booster doses will last. But the longer the period of immunity, the less likely doses of other vaccines that become available will be needed.
That's potentially bad news for Dynavax, Novavax, and Inovio. Dynavax's CpG 1018 adjuvant is being used in several experimental COVID-19 vaccines in development. Novavax plans to file for Emergency Use Authorization (EUA) in multiple countries over the next several months. Inovio and its partner Advaccine are evaluating the company's COVID-19 vaccine candidate in a global phase 3 study.
Now what
The booster-dose news seemed to rattle investors who are cheering for Dynavax, Novavax, and Inovio. However, there are much more important potential catalysts for these stocks.
Dynavax expects several clinical updates from its collaboration partners that use Cpg 1018. The company believes that these could set the stage for EUA or conditional authorization by the end of this year.
Novavax has already filed for EUA for its COVID-19 vaccine with its partner, Serum Institute of India, in India, Indonesia, and the Philippines. The company intends to submit EUAs in several other countries, including the U.K., European Union, and the U.S., in the third and fourth quarters of this year.
Inovio is focusing primarily on non-U.S. markets with its COVID-19 program for now. However, CEO Joseph Kim said in Inovio's Q2 conference call that the company will talk with the FDA about lifting the partial clinical hold on its COVID-19 vaccine studies after efficacy is demonstrated in its global late-stage study.
