Novavax Stock Falls After FDA Puts Two Vaccine Programs on Hold
Shares of Novavax NVAX lost nearly 20% on Wednesday after the company announced that the FDA has placed a clinical hold on its experimental COVID-19-Influenza Combination (“CIC”) and stand-alone influenza vaccine candidates.
This clinical hold was placed in response to a ‘spontaneous report’ of motor neuropathy in a study participant who took the CIC vaccine as part of a phase II study conducted outside the United States last year in January. While this study was completed in July 2023, the adverse event was reported last month. Novavax was notified about the placing of the clinical hold last Friday.
Motor neuropathy is a condition that occurs when the nerves that control movement are damaged.
Impact of the Clinical Hold on Novavax Stock
This clinical hold is likely to delay Novavax’s original plans to start the phase III immunogenicity study on the CIC and standalone flu vaccines before the end of this year.
While management does not believe that its vaccines are responsible for causing the adverse event, it is working closely with the FDA to successfully resolve the issue. It is also working expeditiously to start the late-stage study on the vaccines.
Novavax confirmed that the above clinical hold does not impact its current COVID-19 vaccine.
NVAX Stock Performance
The clinical hold announcement did not sit well with the investors, who cited worries over Novavax’s growth. The company currently has only one marketed product, its protein-based COVID-19 vaccine, which has been suffering from low demand following a late entry into the U.S. market.
Some investors were also concerned that the clinical hold could jeopardize Novavax’s recently signed multi-billion dollar deal with pharma giant Sanofi SNY for its protein-based COVID-19 vaccine.
Year to date, Novavax’s shares have soared 111.4% against the industry’s 1.8% decline.
Image Source: Zacks Investment Research
Sanofi Deal Breathes New Life Into NVAX Stock
Beginning next year, Sanofi will gain rights to co-market Novavax’s COVID-19 vaccine globally, except in certain countries where the company has existing partnership agreements. The French drugmaker also has the sole license to develop and market the Novavax vaccine in combination with its influenza vaccine.
In return, Sanofi made an upfront payment of $500 million to Novavax. It will also pay up to $700 million in milestone payments. Novavax will be eligible to receive tiered double-digit percentage royalty payments on sales by Sanofi of the COVID-19 vaccine, Sanofi’s influenza-COVID combination vaccine and any other combination vaccine that Sanofi may develop, including Novavax’s COVID-19 vaccine.
The deal bodes well for Novavax as it helped scrap a prior warning over the company’s ability to continue operations and provided the management with funds to support its ongoing pipeline programs. Both NVAX and SNY continue to retain the right to develop their combined COVID-19-influenza combination vaccines at their own cost.
Other Players Developing COVID-Flu Combination Shots
Apart from Novavax, pharma giants like Pfizer PFE and Moderna MRNA are also developing their respective COVID/flu combination vaccines using mRNA technology. Both peers are way ahead of NVAX as their candidates are in late-stage development.
Moderna is currently ahead of all its competitors in the COVID/flu combination space. In June, MRNA reported positive results from a late-stage study on mRNA-1083, its investigational mRNA-based combination vaccine against influenza and COVID-19, in older adults (50 years and above). This study met its primary endpoints, showing that mRNA-1083 elicited higher immune responses against influenza and COVID-19 than licensed standalone influenza and COVID-19 vaccines.
Based on these results, MRNA intends to submit a regulatory filing seeking approval for mRNA-1083 before the end of this year, supported by a priority review voucher to accelerate the FDA’s approval process. It aims to market the vaccine by next year.
Pfizer suffered a major setback in this space a few months back when it reported data from a phase III study on its investigational mRNA-based COVID/flu combination vaccine. The study missed one of its two primary immunogenicity objectives. PFE is currently evaluating adjustments to its combination vaccine program to improve immune responses against influenza B and plans to discuss the next steps with health authorities. Pfizer is developing this vaccine in collaboration with BioNTech.
Novavax, Inc. Price
Novavax, Inc. price | Novavax, Inc. Quote
NVAX’s 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Sanofi (SNY) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Moderna, Inc. (MRNA) : Free Stock Analysis Report
Novavax, Inc. (NVAX) : Free Stock Analysis Report