Novavax grew from 150 employees to 800 as it developed and tested its Covid-19 vaccine.
Karen Ducey/Getty ImagesCovid-19 cases are subsiding, vaccine megasites are opening across the country, and the U.S. government just authorized a third Covid vaccine. But most of America and the world remains unvaccinated, and investors have awarded a $15 billion capitalization to vaccine start-up Novavax, which hopes to seek U.S. authorization for its Covid entrant in the second quarter of 2021.
Clinical trials have shown the Novavax (ticker: NVAX) Covid-19 shot to have comparable efficacy as the first-authorized vaccines from Pfizer (PFE)/ BioNTech (BNTX) and Moderna (MRNA), Novavax CEO Stan Erck said on a conference call after Monday’s close. Unlike those earlier messenger-RNA vaccines, the Novavax doses don’t need to be kept frozen and can be distributed refrigerated.
“The past year has been a whirlwind,” said Erck, as Novavax released its 2020-year results. “Everything about our company has changed. And I’m afraid to say that I don’t see a slowdown soon.”
Novavax stock closed Monday ahead of the company’s report at $240, up 4%. Having started the year at $113, the shares shot above $330 in February when the company reported impressive protection from its Covid vaccine in trials conducted in the U.K. and South Africa. Against the initial strain of the Covid virus, the vaccine’s efficacy matched the Pfizer and Moderna shots and outperformed those from Johnson &Johnson (JNJ) and AstraZeneca (AZN). Variants of the virus have become a worry, but the Novavax trials showed acceptable protection against those strains, too.
Wall Street’s price targets for Novavax stock average above $250 a share, according to Sentieo, with some targets reaching up into the $300 level.
The little company had an $8 stock and was still testing its first planned product, a flu vaccine, when the Covid pandemic hit last year. Novavax grew from 150 employees to 800 as it developed and tested its Covid shot. For the 2020 year, it lost $418 million, or $7.27 a share, but it finished with over $800 million in cash. Government agencies have committed over $2 billion to back the company’s vaccine development.
Erck says that by May or June of this year, Novavax and its international partners will be ready to start manufacturing Covid shots at a rate of over 2 billion doses a year. That’s around the time he’s hoping to get the vaccine authorized in the U.K. and South Africa. A pivotal trial in the U.S. and Mexico fully enrolled its 30,000 participants in December. Novavax hopes that the U.S. Food and Drug Administration will find the data from the U.K. and South African trials sufficient for a U.S. authorization, but if not, Erck expects to have interim results from the U.S. trial in this year’s second quarter.
Novavax has reached supply deals with governments and the Covax international program for low-income countries to supply about 1.4 billion doses. For that, it has built its own manufacturing plants in the Czech Republic and Sweden, with large partners and licensees in India, Japan, and South Korea. “Pandemics have no borders,” the company’s chief business officer, John Trazzino, told listeners. “Therefore our response must be on a global scale.”
CEO Erck said that variants of the Covid virus are making it look like vaccination will become a regular seasonal business for the company and its peers. The infrastructure that Novavax has built in the pandemic will also be used for other vaccines that the company was working on, including one for the flu that met all the important endpoints in a clinical trial, before the Covid pandemic burst onto the world last year.
Write to Bill Alpert at william.alpert@barrons.com
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March 02, 2021 at 07:17AM
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