What happened
Shares of Novavax (NVAX -2.51%) were plunging 19.3% as of 10:51 a.m. ET on Friday. The decline came after the Food and Drug Administration (FDA) released briefing documents for an advisory committee meeting scheduled for June 7. This advisory committee will review Novavax's filing for Emergency Use Authorization (EUA) of its COVID-19 vaccine NVX-CoV2373.
So what
Many investors focused primarily on the following statement in the FDA briefing document: "Multiple events of myocarditis/pericarditis were reported in temporal relationship to NVX-CoV2373 administration, similar to myocarditis following mRNA COVID-19 vaccines and raising concerns for a causal relationship to NVX-CoV2373."
The FDA noted that four of the five adverse events reported in Novavax's data occurred in young men. This demographic was found to have a higher risk for myocarditis (inflammation of the heart muscle) after receiving messenger RNA (mRNA) COVID vaccines developed by Moderna and partners Pfizer and BioNTech.
The agency even said that "the risk of myocarditis following NVX-Cov2373 could be higher than reported during post-authorization use of mRNA COVID-19 vaccines." Why? No cases of the condition were found in the pre-authorization review of the Moderna and Pfizer-BioNTech vaccines.
Image source: Getty Images.
But there's a case to be made that investors are overreacting to these comments. The FDA stated that "a causal association between vaccination and these events cannot be concluded based on available data." Importantly, the agency also said that it's "more likely than not" that NVX-CoV2373 will provide protection against COVID-19 caused by the coronavirus omicron variant.
Now what
Novavax's steep sell-off today could only be temporary. The vaccine stock will probably skyrocket next week if the FDA advisory committee gives a positive recommendation for NVX-CoV2373. But we'll have to wait and see how much the myocarditis concerns influence the panel's thinking.
