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Why BioNTech and RedHill Are Soaring This Week, While Novavax Is Sinking

By Keith Speights – Oct 22, 2021 at 5:51AM

Key Points

  • BioNTech benefited from a positive FDA decision and encouraging clinical study results.
  • RedHill stock popped due to insider buying.
  • Novavax's shares fell due to a Politico article alleging continued serious manufacturing issues.

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All three have COVID-19 connections.

What happened

Two leading COVID-19 vaccine makers have seen their shares go in totally different directions so far this week. BioNTech (BNTX -2.06%) was up by 15.6% for the week as of the market close on Thursday, according to data from S&P Global Market Intelligence. Shares of Novavax (NVAX -6.16%), meanwhile, have lost 14.3%. And shares of RedHill Biopharma (RDHL 1.00%), which is developing an oral COVID-19 therapy, were up 16.8% for the week as of the end of trading on Thursday. 

BioNTech benefited from two positive developments. On Wednesday, the Food and Drug Administration authorized the use of mix-and-match COVID-19 vaccine boosters. On Thursday, BioNTech and its big partner, Pfizer (PFE -0.64%), announced phase 3 clinical trial results that showed an efficacy of 95.6% for a booster dose of their COVID-19 vaccine.

However, Novavax's shares were hammered after Politico reported on Tuesday evening that the company's manufacturing quality issues could be more serious than initially thought. Anonymous sources stated that Novavax has struggled to achieve required purity levels for its vaccine doses, the article said.  

RedHill's big gain came after the company announced on Monday that key insiders had been buying shares. Several members of its board of directors and senior management together bought a total of around 180,000 American depositary shares between mid-September and Oct. 15. 

A healthcare professional giving a shot to a patient with another healthcare professional watching.

Image source: Getty Images.

So what

It's understandable why the two vaccine stocks diverged over the last four days. Investors were clearly optimistic about the further sales prospects for the Pfizer-BioNTech vaccine. They were also concerned about what the details revealed in the Politico article might mean for Novavax.

The optimism about BioNTech seems to be warranted. The FDA's mix-and-match booster decision combined with the high efficacy shown in the phase 3 booster study could translate into higher demand for the companies' COVID-19 vaccine.

However, Novavax issued a public statement responding to the Politico story that attempted to reassure investors. The company said that it remains confident in its ability to produce high-quality vaccines. It also reaffirmed its previously announced timelines for key regulatory filings for its COVID-19 vaccine. 

As for RedHill, the insiders' purchases amounted to well under 1% of the biotech's outstanding shares. So why did the stock price jump so much? Investors love to see insider buying. It reinforces the impression that a company's board and executives are confident about the business's prospects.

Now what

BioNTech now hopes to earn full FDA approval for its COVID-19 vaccine booster. Arguably the most important thing to watch with this company, though, will be how much success it has (along with Pfizer) in securing additional supply deals for 2022 and beyond.

Regarding Novavax, investors will wait anxiously to see if the company completes its regulatory filings without further delays. Management has said it expects to submit for authorizations or approvals in the United Kingdom, Europe, Australia, New Zealand, and Canada within the next two weeks. It also plans to file for U.S. Emergency Use Authorization before year's end.

RedHill plans to soon talk with regulators, including the FDA, about the next steps for its experimental COVID-19 pill, opaganib. Earlier this month, the company reported a statistically significant 62% reduction in mortality for the therapy among hospitalized patients with severe COVID-19 pneumonia.

Keith Speights owns shares of Pfizer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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