Throughout much of 2021, Novavax (NVAX 2.44%) had only itself to blame for delays in winning approvals and authorizations for its COVID-19 vaccine NVX-CoV2373. The company's manufacturing issues caused it to postpone its plans to file for authorizations several times.
However, the U.S. Food and Drug Administration (FDA) now bears responsibility for what seems to be a lackadaisical pace in making a decision on granting Emergency Use Authorization (EUA) for NVX-CoV2373. Is the FDA slow-walking authorization of Novavax's COVID-19 vaccine?
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If it quacks like a duck...
Pfizer and BioNTech applied for U.S. EUA of their COVID-19 vaccine on Nov. 20, 2020. The FDA authorized the vaccine on Dec. 11 -- barely over three weeks later. The agency granted EUA to Moderna's vaccine on Dec. 19, 2020, less than three weeks after Moderna's filing.
Novavax submitted its U.S. EUA request on Jan. 31, 2022. It's been seven weeks and counting, but the FDA still hasn't rendered its decision.
This lagtime prompted Georgetown law professor Lawrence Gostin, who specializes in public health law, to tweet on March 11, 2022, "FDA must stop slow walking authorizing #Novavax. Every major regulatory agency has authorized it."
Gostin wasn't exaggerating -- at least not much. So far, Novavax's vaccine has picked up authorizations in Australia, Bangladesh, Canada, the European Union, Great Britain, India, Indonesia, New Zealand, the Philippines, and South Korea. It's also received Emergency Use Listing from the World Health Organization.
The FDA certainly has the capability to make a decision more quickly, as evidenced by its fast authorizations for the Pfizer-BioNTech and Moderna vaccines. Novavax obviously has the clinical data to support authorization for its vaccine, as evidenced by the long list of other positive regulatory decisions.
There's an old saying, "If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck." The FDA's sluggishness seems to pass the "duck test" for slow-walking an authorization for Novavax's COVID-19 vaccine.
Why the snail's pace?
What's behind the FDA's slowness in authorizing Novavax's vaccine? The agency probably doesn't feel a sense of urgency.
That's understandable to some extent. After all, the "E" in EUA stands for "emergency." Three COVID-19 vaccines are already available in the U.S. More than 217 million Americans have received at least two vaccine doses. Nearly 97 million of those have also received a booster dose.
On the other hand, 23% of Americans remain unvaccinated. Novavax's vaccine was developed using a more traditional approach (protein sub-units). Some who have been hesitant to receive a messenger RNA or DNA vaccine could be more receptive to the company's vaccine.
Also, despite a decline in the number of COVID-19 cases in the U.S., there's still reason for concern. China is experiencing its worst coronavirus outbreak since 2020. COVID-19 cases are also climbing in Europe. It's quite possible that the U.S. could face yet another wave in the not-too-distant future.
Pfizer and Moderna are seeking FDA authorizations for additional booster doses. However, many countries still don't have enough vaccines. The U.S. could donate more doses to those countries if Novavax's vaccine receives EUA.
A prediction
Novavax's shares have plunged close to 70% from last year's highs. The longer the FDA takes to make a decision, the longer a cloud of uncertainty will hover over the vaccine stock. Some investors could be worried that an elongated EUA review period increases the likelihood that Novavax's vaccine won't win U.S. authorization.
I'll step out on a limb and make a prediction, though. My view is that the FDA will grant EUA to Novavax's COVID-19 vaccine. I also expect that the decision could come in April, if not sooner. Granted, this prediction could be totally off-base. But I think the chances are pretty good that it will prove to be right.
Will U.S. EUA be enough to spark a rebound in Novavax's share price? It should help. An even bigger catalyst, though, would be for the company to secure significant supply deals for 2023 and beyond. Like potential FDA authorization, however, that's something that investors will still have to wait on.
