Novavax (NVAX -0.95%) has reached a major milestone. The biotech company surged past the vaccine-race finish line: It's won authorization for its vaccine in 38 countries, and now it's delivering doses around the world. This is the key to billion-dollar revenue this year.
However, something else is key to billion-dollar revenue over the long term. And that's a vaccine that may be a popular choice in the post-pandemic years to come: a combined influenza/coronavirus vaccine. Novavax and rival Moderna (MRNA 0.89%) are each working on one, but Novavax is farthest ahead so far. April could be a critical month for the program -- and therefore, for Novavax. Let's find out why.
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A combined vaccine
First, a bit of background on the combined vaccine program. Novavax launched a phase 1/2 study of its candidate back in September. The investigational vaccine includes Novavax's coronavirus vaccine and its flu vaccine candidate, NanoFlu. Prior to the pandemic, NanoFlu was Novavax's most advanced candidate. It met all primary endpoints in a pivotal trial back in the spring of 2020. Novavax hasn't yet submitted NanoFlu for regulatory approval -- but that would be the next step for this candidate.
Here's why Novavax may beat Moderna: Its combined candiate includes the fully developed (though not yet approved) NanoFlu vaccine. Moderna is still waiting for phase 2 data on its flu vaccine candidate before starting clinical trials of its combined candidate. So Novavax has the advantages of a component that already proved itself to be safe and efficacious in flu -- and of being ahead on a potential launch timeline.
So, why is April a crucial month? In its earnings report this week, Novavax said that it's expecting data from the phase 1 portion of its combined vaccine trial next month. If the data are satisfactory, the company can launch the phase 2 part of the trial. This could keep Novavax in the lead. And it could mean a quicker time to market if the rest of the path is smooth.
Demand post-pandemic
The success of such a vaccine is important because it could ensure greater demand post-pandemic. It's important to keep in mind that nearly half of Americans got a flu shot in the 2020-2021 flu season, according to the Centers for Disease Control and Prevention. And figures in recent years have generally been higher than 45%.
The general public may not rush to get an annual flu shot and a coronavirus shot, so makers of a coronavirus-only vaccine may suffer years down the road. But it's clear that a population already getting an annual flu jab is likely to go for a combined vaccine. That means the development of a combined vaccine could be critical for long-term recurrent revenue.
Novavax's CEO Stanley Erck even called the combined candidate "a key component of our pipeline."
What should we expect in April? Erck says a goal of phase 1 was to show that one component of the vaccine wouldn't overpower the immune response of the other. This was demonstrated in preclinical testing, but must be confirmed in humans. The data also will help determine the dosing level for both the coronavirus component and the flu component; success here is necessary to move forward. The next step would be the confirmation of dosage level in the phase 2 part of the trial later this year.
What does this mean for Novavax investors or potential investors?
This next set of data is a big step. If it disappoints, Novavax's shares could suffer in the near term. Biotech companies always carry risk -- candidates can experience setbacks or even failure at any stage of development. Before investing in biotech companies, it's best to be aware of that.
But for investors who don't mind a bit of risk, now is a great time to own -- or buy -- Novavax shares. The company is on its way to making billions of dollars in revenue from its first product. And progress so far on the combined vaccine is encouraging. So, as we look forward to the April data, it's reasonable to be cautiously optimistic.
