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How Big of a Catalyst Could U.S. Authorization Be for Novavax?

By Keith Speights and Brian Orelli, PhD – Updated Jan 2, 2022 at 3:28PM

Key Points

  • U.S. authorization would clear the way for Novavax to supply 100 million doses of its COVID-19 vaccine.
  • It would also open up the possibility of obtaining authorization for boosters.

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The vaccine maker could have a huge win on the way.

Novavax (NVAX -0.35%) has already picked up several authorizations for its COVID-19 vaccine in other countries. But there's one big prize dangling in front of the company: U.S. Emergency Use Authorization (EUA). In this Motley Fool Live video recorded on Dec. 15, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss how big of a catalyst U.S. authorization could be for the vaccine stock.

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Keith Speights: So the first story I wanted to start off with, Brian, is Novavax -- ticker there, by the way, is N-V-A-X. Novavax announced on Monday that it's filed for Emergency Use Authorization for its COVID-19 vaccine in the United Arab Emirates.

Now, Brian, I suspect that's not exactly a big potential market for Novavax. However, Novavax also confirmed yet again that it's on track to file for U.S. Emergency Use Authorization by the end of this year, and that's coming up in just a couple of weeks. Let's assume the company does just that, and it goes on to win Emergency Use Authorization for its COVID-19 vaccine, maybe sometime in early 2022. How big of a catalyst do you think this U.S. authorization might be for Novavax?

Brian Orelli: It's a big financial catalyst for sure. It's established a contract with the government for 100 million doses. I'm not sure if the price has ever been disclosed, but let's assume it's in the $20 to $30 range, and that would be $2 [billion] to $3 billion. Certainly a win for the company.

More importantly, it opens up the possibility of getting boosters approved. And then, obviously, it would need to get mix-and-match would be the most ideal situation for Novavax since not very many people have going to had its vaccine as their first one. So hopefully boosters after the mRNA vaccines would be useful just to get that approved or authorized, and then that would open up the possibility of additional sales in the U.S.

Keith Speights: My take is Novavax could be -- assuming it does get that authorization -- my take is Novavax could be an attractive booster alternative. What's your view?

Brian Orelli: Yeah. I think at this point, maybe people aren't even going to really know or care, which boost they are getting. I mixed-and-matched and got Moderna's after getting Pfizer for my first two, and I didn't really care. I was just like, give me the appointment that worked for me, and that was the one that I got.

Speights: Yeah. Now, Novavax has another big catalyst that could be coming any time now. The company is awaiting approval or authorization of its vaccine by the European Union. That's another big deal for Novavax. I think they have a contract and supply deal to provide up to 200 million doses, I think, for Europe. [Editor's note: European authorization was granted to Novavax's COVID vaccine after the recording of this video.]

Orelli: Yeah. That will be a big financial catalyst as well.

Speights: That's the one that, it was just last week, I think, that there was a hint from a top European Medicines Agency official that authorization could be coming quite soon.

Orelli: Yeah. That one seems pretty much like it's somewhat priced into the stock already.

Brian Orelli, PhD owns Novavax. Keith Speights owns Pfizer. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

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