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Novavax Stock Up 9% on FDA Nod for Updated COVID-19 Vaccine
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Novavax (NVAX - Free Report) announced that the FDA granted emergency use authorization (EUA) to an updated version of its protein-based COVID-19 vaccine for individuals aged 12 years and older.
Following this nod, Novavax’s updated vaccine is the only non-mRNA vaccine option available to people in the United States. Management expects pre-filled syringes of the vaccine to be available across the country.
This authorization comes just a week after the agency approved/authorized updated the mRNA-based COVID-19 vaccines of Pfizer (PFE - Free Report) /BioNTech and Moderna (MRNA - Free Report) . The FDA approved Pfizer’s Comirnaty and Moderna’s Spikevax for use in individuals aged 12 years of age and older. It also granted EUA to low-dose formulations of these vaccines for individuals aged six months through 11 years.
While mRNA-based vaccines have been developed to target the KP.2 strain of the virus, Novavax’s vaccine has been designed to target the JN.1 strain.
Why Does NVAX’s Vaccine Differ From its Peers?
The updated vaccine composition is based on guidance from the FDA issued in late June, which advised COVID-19 vaccine manufacturers to update their respective COVID-19 vaccines to target the KP.2 strain if it is feasible. This guidance is also an update on the FDA’s prior advice issued in early June that recommended updating COVID-19 vaccines to target the JN.1 strain.
The FDA’s prior advice was in line with the recommendation issued by a World Health Organization (WHO) advisory committee on April 26. The FDA pointed out that post the WHO recommendation, another subvariant named KP.2 has become the dominant strain in the country since the end of April. The latest CDC data shows that the KP.3.1.1 and KP.2.3 strains were the most prevalent, accounting for more than half of COVID-19 cases in the country.
Unlike traditional vaccines which can take months to produce, mRNA-based vaccines can be developed quickly and also offer manufacturing scalability, something that was observed in the case of COVID-19 vaccines. This was likely an advantage for Moderna and Pfizer, who simply had to update their COVID-19 vaccines when the FDA updated their guidance. The updated formulations of these COVID-19 vaccines are scheduled to be launched commercially ahead of the upcoming vaccination season, which usually starts in early October.
The EUA was granted based on data from non-clinical studies that showed that the updated vaccine composition was also effective against the current circulating strains, including KP.2.3, KP.3, KP.3.1.1 and LB.1.
Our Take
Compared with Pfizer and Moderna, Novavax was not able to reap the benefits of the pandemic due to a delayed launch of its COVID-19 vaccine. During last year’s vaccination season, the FDA authorized NVAX’s vaccine a month after approving rival Pfizer’s and Moderna’s vaccines, which led to sales suffering due to a delayed product launch. This time, the company’s vaccine has been authorized sooner. Early participation in the upcoming vaccination season could help the company capitalize on the opportunity. Shares of Novavax were up nearly 9% on Friday likely due to this reason.
Year to date, the stock has skyrocketed 157.9% compared with the industry’s 0.6% growth.
Image Source: Zacks Investment Research
Starting next year, Sanofi (SNY - Free Report) will gain rights to co-market Novavax’s protein-based COVID-19 vaccine globally. The France-based drugmaker will also have the sole license to develop and market the Novavax vaccine in combination with its influenza vaccine. In return, it will be eligible to receive up to $1.2 billion, including $500 million in upfront payment and the rest in milestone payments. NVAX will also be eligible to receive tiered double-digit percentage royalty payments on product sales under this deal. Sanofi also agreed to make an equity investment of nearly $70 million in Novavax in exchange for a 4.9% stake.
The deal with Sanofi breathes new life into Novavax, which had been facing uncertainties in its business for a long time. With the backing of a pharma giant, Novavax expects to increase the market share and presence of its COVID-19 vaccine to a larger audience. This deal allowed management to do away with its previous concerns about its ability to continue as a ‘going concern.’
Image: Shutterstock
Novavax Stock Up 9% on FDA Nod for Updated COVID-19 Vaccine
Novavax (NVAX - Free Report) announced that the FDA granted emergency use authorization (EUA) to an updated version of its protein-based COVID-19 vaccine for individuals aged 12 years and older.
Following this nod, Novavax’s updated vaccine is the only non-mRNA vaccine option available to people in the United States. Management expects pre-filled syringes of the vaccine to be available across the country.
This authorization comes just a week after the agency approved/authorized updated the mRNA-based COVID-19 vaccines of Pfizer (PFE - Free Report) /BioNTech and Moderna (MRNA - Free Report) . The FDA approved Pfizer’s Comirnaty and Moderna’s Spikevax for use in individuals aged 12 years of age and older. It also granted EUA to low-dose formulations of these vaccines for individuals aged six months through 11 years.
While mRNA-based vaccines have been developed to target the KP.2 strain of the virus, Novavax’s vaccine has been designed to target the JN.1 strain.
Why Does NVAX’s Vaccine Differ From its Peers?
The updated vaccine composition is based on guidance from the FDA issued in late June, which advised COVID-19 vaccine manufacturers to update their respective COVID-19 vaccines to target the KP.2 strain if it is feasible. This guidance is also an update on the FDA’s prior advice issued in early June that recommended updating COVID-19 vaccines to target the JN.1 strain.
The FDA’s prior advice was in line with the recommendation issued by a World Health Organization (WHO) advisory committee on April 26. The FDA pointed out that post the WHO recommendation, another subvariant named KP.2 has become the dominant strain in the country since the end of April. The latest CDC data shows that the KP.3.1.1 and KP.2.3 strains were the most prevalent, accounting for more than half of COVID-19 cases in the country.
Unlike traditional vaccines which can take months to produce, mRNA-based vaccines can be developed quickly and also offer manufacturing scalability, something that was observed in the case of COVID-19 vaccines. This was likely an advantage for Moderna and Pfizer, who simply had to update their COVID-19 vaccines when the FDA updated their guidance. The updated formulations of these COVID-19 vaccines are scheduled to be launched commercially ahead of the upcoming vaccination season, which usually starts in early October.
The EUA was granted based on data from non-clinical studies that showed that the updated vaccine composition was also effective against the current circulating strains, including KP.2.3, KP.3, KP.3.1.1 and LB.1.
Our Take
Compared with Pfizer and Moderna, Novavax was not able to reap the benefits of the pandemic due to a delayed launch of its COVID-19 vaccine. During last year’s vaccination season, the FDA authorized NVAX’s vaccine a month after approving rival Pfizer’s and Moderna’s vaccines, which led to sales suffering due to a delayed product launch. This time, the company’s vaccine has been authorized sooner. Early participation in the upcoming vaccination season could help the company capitalize on the opportunity. Shares of Novavax were up nearly 9% on Friday likely due to this reason.
Year to date, the stock has skyrocketed 157.9% compared with the industry’s 0.6% growth.
Image Source: Zacks Investment Research
Starting next year, Sanofi (SNY - Free Report) will gain rights to co-market Novavax’s protein-based COVID-19 vaccine globally. The France-based drugmaker will also have the sole license to develop and market the Novavax vaccine in combination with its influenza vaccine. In return, it will be eligible to receive up to $1.2 billion, including $500 million in upfront payment and the rest in milestone payments. NVAX will also be eligible to receive tiered double-digit percentage royalty payments on product sales under this deal. Sanofi also agreed to make an equity investment of nearly $70 million in Novavax in exchange for a 4.9% stake.
The deal with Sanofi breathes new life into Novavax, which had been facing uncertainties in its business for a long time. With the backing of a pharma giant, Novavax expects to increase the market share and presence of its COVID-19 vaccine to a larger audience. This deal allowed management to do away with its previous concerns about its ability to continue as a ‘going concern.’
Novavax, Inc. Price
Novavax, Inc. price | Novavax, Inc. Quote
NVAX Zacks Rank
Novavax currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.