Novavax (NASDAQ:NVAX) submitted an application to the FDA, seeking to modify its emergency use authorization (EUA) and update its protein-based COVID-19 vaccine for the upcoming autumn.
While this updated vaccine has been formulated to target the JN.1 variant, the management claims that the vaccine has also proven effective against currently prevalent strains including KP.2 and KP.3.
Subject to necessary approvals from the FDA and CDC, Novavax intends to market this updated COVID-19 vaccine in pre-filled syringes by mid-August. If authorized/approved, it will be the only protein-based non-mRNA COVID-19 vaccine in the United States.
Novavax's filing builds on guidelines issued by the FDA last week advising COVID-19 vaccine makers Modern (NASDAQ:MRNA), Novavax and Pfizer (NYSE:PFE) should update their respective COVID-19 vaccines to target the KP.2 strain, if it is feasible. This guidance is an update on prior advice issued by the FDA earlier this month, which recommended updating COVID-19 vaccines to target the JN.1 strain.
The FDA's previous advice was in line with the recommendation issued by the World Health Organization (WHO) advisory committee on April 26. However, the FDA pointed out that following the WHO recommendation, another subtype called KP.2 has become the dominant strain in the country since late April. The latest CDC data (as of June 8) shows that the KP.2 and KP.3 strains were the most prevalent, accounting for nearly half of COVID-19 cases in the country.
The KP.2 strain is a subvariant derived from JN.1 that contains two new additional mutations. According to the FDA, this subvariant provides the virus with an advantage 'either in terms of fitness or in terms of immune evasion.'
The management is also working with other regulatory authorities around the world to secure authorisation/approval for updating its protein-based COVID-19 vaccine.
Year to date, the stock has gained 200.0%, while the industry has declined 6.3%.
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Currently, Novavax's COVID-19 vaccine is authorized by the FDA only for use in individuals 12 years of age and older. The FDA is reviewing the company's regulatory filing seeking full approval for the COVID-19 vaccine. A final decision is expected before April 2025.
Earlier this month, Moderna submitted an application to the FDA for approval of its mRNA-based COVID-19 vaccine for the fall 2024-2025 season. Pfizer has not yet provided an update on its FDA filing for its COVID-19 vaccine.
Compared to Pfizer and Moderna, Novavax was unable to reap the benefits of the pandemic due to the delay in the launch of its COVID-19 vaccine. During last year's vaccination season, Novavax's sales suffered due to the delayed approval of its vaccine manufacturing and product launch. Some investors and analysts believe that Novavax's early participation in the upcoming vaccination season could take advantage of this opportunity.
From the next year onwards, Sanofi (NASDAQ:SNY) will receive rights to co-market Novavax's protein-based COVID-19 vaccine globally. The French drugmaker will also have a sole license to develop and market the Novavax vaccine alongside its influenza vaccine. In return, Novavax will be eligible to receive up to $1.2 billion, including a $500 million upfront payment and the remainder in milestone payments. NVAX will also be eligible to receive tiered double-digit percentage royalty payments on product sales under the deal. In addition, Sanofi also agreed to make an equity investment of approximately $70 million in Novavax in exchange for a 4.9% stake.
The deal with Sanofi has given a new lease of life to Novavax, which had been facing uncertainties in its business for a long time. With the support of the pharma giant, Novavax hopes to increase the market share and presence of its COVID-19 vaccine to a larger audience. The deal also allowed the management to overcome its previous concerns about its ability to continue as a 'going concern'.
Using the money from the Sanofi deal, Novavax has also started making plans to expand its pipeline. Along with its first quarter earnings, the management claimed to have developed a new approach to vaccination against H5N1 bird flu. It is also advancing core technology for different uses like mucosal vaccination and high-density nanoparticles.
Zacks Rank
Novavax is currently carrying a Zacks Rank #3 (Hold).
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