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Why Is Everybody Talking About Novavax Stock?


#In 2020, #Novavax (NASDAQ:NVAX) jumped from obscurity and took investors on the thrill ride of the year. #Shares of this tiny biotech skyrocketed from $4 in #January to $117 in #December. #That spells gains of nearly 3,000%.

#What’s driving this amazing run? #First, the company received positive news from its phase 3 trial for its flu vaccine candidate, #NanoFlu, back in #March. Then, the #Coalition for #Epidemic #Preparedness #Innovations (CEPI) wrote #Novavax a check for $388 million in order to help pay for the company’s COVID-19 vaccine development. #And then, #Novavax received a $1.6 billion grant from #Operation #Warp #Speed (OWS), propelling tiny it into the big leagues. #Now investors are talking about #Novavax’s COVID-19 vaccine in the same breath as #Pfizer and #Modern’s. #And the company and its shareholders are emerging as big winners in the stock market.

#Image source: #Getty #Images.

#Will #Novavax’s COVID-19 vaccine get a thumbs-up from the FDA?

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#We don’t know yet. #Novavax reported amazing data from its phase 1 trial, peer-reviewed and published in The #New #England #Journal of #Medicine. The vaccine produced so many antibodies (proteins that fight infection) in volunteers, that at the time many observers called it best in class.

#Whether it will truly be the best is up for debate. The mRNA vaccines from #Pfizer and #Moderna showed very positive data from their phase 3 trials. #This is far more important than any phase 1 data. #All we know from #Novavax’s early trial is that its vaccine produces a huge number of antibodies. #Phase 3 data actually measures whether people were safely and effectively protected against the virus. #And the mRNA vaccines sported incredible numbers — #Pfizer and #Moderna reported 95% and 94.1% efficacy levels, respectively.

#Novavax has multiple vaccine studies going on now, including a phase 2 trial in #South #Africa and #Australia, and a phase 3 trial starting to enroll participants in the U.S. #But perhaps the key trial for the company is its phase 3 study in the U.K.; its readout is expected in the first quarter. #That phase 3 trial will allow the company to seek licensure in the UK and other countries. #It might be sufficient for an emergency use authorization (EUA) in the U.S.

#When #Novavax released its phase 1 numbers on #Aug. 4, excited investors bid the stock up to $189 a share the next day. #Now in #December, the stock is down over 30% off its highs. #Doubts have set in as the market patiently waits for the U.K. phase 3 data to come in.

The COVID-19 vaccine race is not over yet

#While there are numerous drug companies trying to find a vaccine for COVID-19, right now there are five major leaders in the race: #Pfizer (in collaboration with #BioNTech), #Modern, #AstraZeneca (in collaboration with #Oxford #University), #Johnson & #Johnson, and tiny #Novavax.

#Company #Market #Cap #Stock #Return 2020 #Vaccine #Status
#Pfizer $205 billion (0.5%) #On the market
#Modern $44 billion 478% #On the market
#AstraZeneca $131 billion 0.3% #Phase 3
#Johnson & #Johnson $405 billion 5% #Phase 3
#Novavax $7 billion 2,800% #Phase 3

#Data sources: #Yahoo! #Finance, #Company press releases. #Table by author.

#AstraZeneca and #Johnson & #Johnson have pledged not to profit off their COVID-19 vaccines while the pandemic is ongoing. #Investors might want to scratch those two companies from the race, at least in the short term. #Both companies are waiting until the pandemic is over and demand has died down to start making a profit.

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#Novavax, on the other hand, wants to make an appropriate return from its vaccine. #That’s not surprising; the scrappy underdog has been unprofitable for a long time. #It was almost delisted from the #Nasdaq last year when a respiratory vaccine failed to receive approval from the U.S. #Food and #Drug #Administration (FDA). #But the big checks from CEPI and OWS have brought it back from the brink.

#Not only is #Novavax seeking a profit, the biotech has been incredibly active on the business front. #Despite its small size, the company has acquired more manufacturing capacity than its rivals. #Novavax plans to distribute its vaccine to a billion people or more. The company has signed multiple distribution deals (with the U.S., U.K., #Canada, #Australia, and #New #Zealand), as well as manufacturing and distribution deals with collaborators in #India, #Japan, and #South #Korea.

#Country # of #Doses #Novavax #Agreed to #Distribute #Terms of the #Deal
#United #States 100 million $1.6 billion ($16 per dose)
#United #Kingdom 60 million undisclosed
#Canada 76 million undisclosed
#Australia 40 million undisclosed
#New #Zealand 10.7 million undisclosed
#India (with #Serum #Institute of #India) 1 billion undisclosed
#Japan (with #Takeda #Pharmaceuticals) 250 million undisclosed
#South #Korea (with SK #Bioscience) undisclosed undisclosed

#Data source: #Novavax.

#If #Novavax’s vaccine receives regulatory approvals, and the $16-a-dose price tag holds, the company stands to make $4.5 billion in revenues in #English-speaking countries alone. #Novavax is also pursuing a major deal with the #European #Union. “The envisaged contract with #Novavax would provide for the possibility for all EU #Member #States to purchase 100 million doses, and they could further purchase up to 100 million more doses,” the EU said in a press release.

The big news from the U.K.

#One problem for vaccine companies — and the world — is that the coronavirus appears to be mutating. NBC #News reported that, “this variant appears to have ripped through #London and the southeast of #England at alarming speed.” #While this mutation appears to have started in the U.K., infectious disease experts believe that it’s just a matter of time before this new virus expands into the U.S. and elsewhere.

#One of #Novavax’s phase 3 trials is in the U.K., the epicenter of this new strain. #If #Novavax’s vaccine is highly protective against both the original strains of the virus and this mutation, then demand for the company’s vaccine will skyrocket. #But it’s also possible that the mutation will cause lower vaccine efficacy levels.

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#If the novel coronavirus changes frequently, it’s unlikely that a single vaccination will eliminate the disease entirely. #Instead, a vaccination will provide temporary protection, and then we’ll have to vaccinate again — not unlike what we do for the flu. #If we do need to vaccinate on an annual basis, chances are that #Novavax’s stock will be worth a lot more than it is today.





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