Novavax: Still Everything To Play For - Expect Plenty Of Data-Driven Volatility


By Edmund Ingham, SeekingAlpha


  • Novavax has had to play second fiddle to Big Pharmas Pfizer, AstraZeneca, and Johnson & Johnson in recent months in the race to develop a COVID-19 vaccine.
  • That has caused the share price to slip from its August high of $180, to $89 at time of writing - but analyst consensus target price is $220.
  • Novavax has initiated a potentially pivotal trial in the UK for European Approval and will launch a Phase 3 in the US in November, enrolling 30,000 patients.
  • The company has the supply and distribution agreements in place to carry out a successful launch - everything rests on the data.
  • With $2bn in funding, Novavax is no underdog, and its share price can be considered highly volatile. I am long-term bullish whilst expecting short-term downside.
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Investment Thesis

My last article on Novavax (NASDAQ:NVAX) in September provoked a strong response from readers, and I learned a lot about investor sentiment towards the company and how differently people view its science, technology, history, chances of winning approval for its SARS-Cov-2 vaccine NVX-CoV2373, and what price its shares may trade at a year from now.

Nearly 2 months after my last post, despite a few setbacks, it seems that a US approval of a first COVID-19 vaccine is getting closer. I think it is doubtful that we will see one fully approved before the end of the year, but Q121 seems a strong possibility, and currently, it is big pharma who are making the headlines.

After both Johnson & Johnson (JNJ) and AstraZeneca (AZN) were forced to halt their phase 3 vaccine trials, in October and September, respectively, both have now resumed activity at all trial locations. Meanwhile, on the company's Q3 earnings call today, Pfizer's (PFE) CEO Albert Bourla suggested that the company - who also have a vaccine in phase 3 trials in partnership with BioNTech (BNTX) - may have sufficient safety data by the third week of November to apply for an Emergency Use Authorisation ("EUA").

In the US and Europe at least, these 3 look likely to present phase 3 interim trial data before 2021, and each has the capacity to deliver billions of doses worldwide in 2021, should the data be sufficient to garner an approval, plus they have deals in place to supply the US government and others with hundreds of millions of doses.

So, where does this leave Novavax? My answer to that question would be: not as far behind the front-runners as many people seem to think. In my view, Novavax isn't the underdog that some market watchers make it out to be.

The company has $2bn of funding, manufacturing/distribution agreements in place with the Serum Institute of India and Takeda Pharmaceutical (NYSE:TAK), a vaccine that does not need to be transported and stored at sub-zero temperatures, a phase 3 trial underway in the UK that is large enough to secure approval in Europe, data permitting, another one about to start in the US that is also large enough to be considered pivotal, global supply commitments in place, and a competitive and differentiated solution which early data suggests is as promising as any other vaccine currently in development.


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