Novavax's First Profitable Commercial Quarter Marred by Slow Vaccine Rollout

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Despite posting its first profitable quarter as a commercial stage company, shares of Novavax plunged 20% in Tuesday trading after the company announced a slower-than-expected rollout of its COVID-19 vaccine, sold under the trade names Nuvaxovid and Covovax.

John Trizzino, chief commercial officer of Maryland-based Novavax, said Monday that the company has, so far, delivered about 42 million doses of its vaccine across parts of Europe, Canada, South Korea, Australia, New Zealand and Indonesia. However, that is a far cry from the 2 billion doses it initially promised. In fact, in February, the company said it intended to deliver approximately 80 million doses during the first quarter of the year, but that has not manifested as promised, which is causing investors to respond negatively. Some of those issues are the result of external influences, including later-than-expected authorization from the World Health Organization and manufacturing issues from external partners.

During a quarterly financial conference call Monday, Trizzino said the company has been pleased with the initial utilization of its vaccine, and it anticipates “additional pull-through” within the markets where it has been authorized due to increasing demand caused by recent surges of the SARS-Cov-2 virus around the world. Trizzino said the company is collaborating with its partners on allocation and delivery schedules. He said Novavax stands ready to “ship our vaccine to where it is needed most, ensuring that we reach our shared goal of global equitable access.”

“With emergency use listing granted by the WHO (World Health Organization), our vaccine is now available in upwards of 170 countries worldwide, and we have sufficient manufacturing capacity to meet all demand. We believe that our protein-based vaccines storage attributes, efficacy and safety, make it ideal for most settings, including those where standard cold chain is preferred,” Trizzino said, according to a transcript of the call. “With significant progress made in our commercial launch, we believe we are well-positioned to continue this execution through the remainder of 2022 and beyond. To accomplish our objectives, we've rapidly scaled our commercial team with a variety of initiatives underway to support our product launch.”

Although Trizzino struck a tone of assurance, Novavax has been working to overcome manufacturing issues that created multiple delays with the potential authorization of its vaccine, including here in the United States. Last month, officials with the U.S. Food and Drug Administration said the review for authorization in the U.S. could take longer than anticipated due to an "incredibly complex review process." The FDA noted that the vaccine’s clinical data and manufacturing process will have to be thoroughly reviewed before an Emergency Use Authorization can be granted to Novavax. An advisory committee meeting is scheduled for next month.

While the Novavax vaccine has yet to be authorized in the U.S., its approval in other countries provided the company with its first commercial revenue source. In the first quarter of this year, Nuvaxovid generated $704 million in revenue. Based on that, Novavax reiterated its 2022 revenue guidance to between $4 billion and $5 billion.

Chief Executive Officer Stanley C. Erck touted the first-quarter efforts, saying the company has been successful in launching its COVID-19 vaccine. He noted that the Novavax continues to examine the protein-based medication against the threat of viral mutations.

“Importantly, as new variants have emerged, we have progressed our strategy to be ready to address the dynamic environment and continue development beyond COVID-19 with our COVID-19-Influenza combination vaccine candidate,” Erck said in a statement.

Earlier this year, Novavax announced results from its Phase I/II trial of the COVID-19 vaccine and quadrivalent influenza vaccine candidate. Data showed an immune response was confirmed in patients and also showed that the combination formulation has the potential to reduce total antigen amount by up to 50%. The Phase II portion of the study is expected to begin later this year.

The company also continues to assess its Nuvaxovid vaccine against variants, as well as for use as a booster and in pediatric populations.