Novavax (NVAX 0.87%) hasn't yet applied for the use of its vaccine as a booster in the U.S. It's still waiting for regulators to give it the nod for use as a primary series. But the biotech is making its way into the booster market in other parts of the world. For example, Australia this week authorized the vaccine to be used as a booster. And earlier this spring, Japan became the first to fully approve Novavax's vaccine as a primary shot and booster. Novavax also has applied for booster authorization in the U.K. and European Union. And the company eventually will apply in the U.S. too.
This could be seen as great news. After all, many countries and regions boast high vaccination rates. There, Novavax could carve out share in the booster market. That is the plan. But Moderna (MRNA 1.55%) recently announced something that could make the road a bit more difficult for Novavax. Let's check out the news -- and see whether it truly could spell trouble for this vaccine latecomer.
Moderna's booster candidate
Moderna recently reported outstanding results from its trial of a booster candidate specifically targeting the omicron variant and the original coronavirus. Today's vaccines all target the original virus. Moderna's booster candidate showed "superior" neutralizing antibody response against omicron one month after vaccination. That's compared to Moderna's coronavirus vaccine.
Now, Moderna plans on submitting this data to the U.S. Food and Drug Administration. If all goes smoothly, the company aims to bring the candidate to market in time for the fall booster campaign.
Where does Novavax stand? As mentioned earlier, the company has won authorization of its original vaccine as a booster in some areas. And Novavax also is studying an omicron-specific booster. In late May, the company said it had initiated a phase 3 trial.
NASDAQ: NVAX
Key Data Points
But Moderna clearly is ahead from a timeline perspective when it comes to the booster market. If Moderna wins authorization of its booster in the U.S. and/or elsewhere, it's likely to make things difficult for companies that don't sell a strain-specific booster. That's because people probably will want to go for the booster that best addresses today's coronavirus.
So, does this mean trouble for Novavax? In the near term, yes. If Moderna wins authorization, Novavax could seriously lose out when it comes to demand. Even if doses already are sold to countries, they may sit on the shelves as healthcare providers and patients opt for the more efficacious booster.
Of course, Novavax eventually could catch up and bring its strain-specific booster to market. But it may be too late for the upcoming booster season. This would be a repeat performance of Novavax's path with its original vaccine: reaching the market well after rivals have taken a leadership position.
What does this mean for investors?
Now let's ask another question: What does this mean for you as an investor? Should you flee Novavax shares? Not necessarily. Since Moderna's strain-specific booster isn't yet available, Novavax could start to carve out some booster market share right now in areas where its authorized. Such as Australia and Japan. And even some share of the market is a big deal for Novavax. It's important to remember the vaccine is the company's first commercialized product.
It's also important to look farther down the road. And there, Novavax could become a leader. The company is working on a combined coronavirus/flu vaccine candidate. So is Moderna. But Novavax is farther ahead. The company is set to start a phase 2 trial by the end of this year.
A combined vaccine could be big. That's because it easily could attract people who generally go for an annual flu jab. So, this represents a recurrent source of revenue -- regardless of whether coronavirus case numbers are high or not. (People don't wait for flu cases to surge before getting a flu shot.)
All of this means that today's news from Moderna may signal less demand for Novavax in the coming months. But it shouldn't hurt this biotech company's long-term vaccine story.
