Shares of Novavax (NVAX 1.27%) had plunged by 19.8% as of 10:54 a.m. ET on Thursday. This steep decline came despite the Food and Drug Administration (FDA) granting Emergency Use Authorization (EUA) for Novavax's COVID-19 vaccine on Wednesday.
Investors appear to be giving heavier weight to some negative news for Novavax than they are to its positive news. The European Medicines Agency (EMA) determined that severe allergic reactions are a potential side effect of Novavax's vaccine, according to an article published by Reuters. That Reuters article also noted that data from the European Centre for Disease Prevention and Control show that only around 250,000 doses of Novavax's COVID-19 vaccine have been administered in Europe so far.
The U.S. EUA for Novavax's COVID-19 vaccine is definitely an important milestone for the company. Had the FDA given it a thumbs-down, you can bet the vaccine stock would have crashed much harder than it did on Thursday morning.
However, this U.S. authorization was only for its use as a two-dose primary series to vaccinate adults, and the potential market for a primary vaccine will be limited. Among the U.S. population who are 18 or older, nearly 77% are already fully vaccinated. And many of those who haven't received a COVID-19 vaccine yet will still be unlikely to get one even with the availability of Novavax's vaccine as an option.
But if Novavax's good news isn't as good as it might otherwise have been, the EMA's identification of its vaccine's potential side effects isn't all that damaging either. It should not be in any way surprising that severe allergic reactions are possible with any vaccine.
The uptake of Novavax's COVID-19 vaccine in Europe so far is disappointing. However, Novavax could gain more market traction as it picks up authorizations and approvals across the world for the use of its vaccine as a booster for both adults and adolescents. The company has already scored victories in several key markets on these fronts, but doing so in the U.S. would likely serve as a major catalyst for its stock.