The Rise, Fall and Future of Novavax

Silvia Taylor, EVP, chief corporate affairs and advocacy officer, Novavax/Courtesy of Novavax 

It could have been a fairytale story. A small American vaccine maker rises to save the day during the pandemic of a century - and ascends to the top of its class.

Instead, on Feb. 28, Novavax issued a candid warning to investors: it may not be able to continue operations beyond February 2024.

The news follows a development campaign in which the Gaithersburg, Maryland-based company had nothing but challenges with its COVID-19 shot, Nuvaxovid.

After being beaten to the U.S. market by both Pfizer and BioNTech’s Comirnaty and Moderna’s Spikevax, Novavax was plagued with regulatory concerns over myocarditis and severe allergies associated with the vaccine.

Novavax wasn’t alone on the myocarditis front, but it didn’t help. 

The company has also encountered manufacturing delays. Despite a $1.6 billion commitment by the U.S. government under Operation Warp Speed, the launch of Nuvaxovid’s Phase III trial was delayed by manufacturing scale-up challenges.

In February 2022, a week after submitting its EUA application in the U.S., Reuters reported the company had delivered just a small fraction of its intended global supply.

This should not have come as a surprise as Nuvaxovid is the first commercial product in Novavax’s 36-year history. 

“We started at the beginning of the pandemic as a company that was quite small and very focused on vaccine development,” Silvia Taylor, EVP, chief corporate affairs and advocacy officer, Novavax, told BioSpace. “We had an opportunity to help the world provide a solution to the pandemic, and so we started scaling up.” 

Novavax ultimately got the vaccine authorized in 40 countries worldwide.

“But all of that came with much learning and some challenges,” Taylor said. “What was different for us is we are the innovator … As an innovator, we had to advance the science [and] we also had to build the organization.”

This contrasts with BioNTech, which partnered with the commercially savvy Pfizer. 

Mayank Mamtani, managing director and group head of healthcare research at B. Riley Securities, told BioSpace the company made a strategic mistake in not partnering on Nuvaxovid.

“I think Novavax had an opportunity. Merck was knocking at their door. A couple of companies were knocking at their door, but they were too proud to take help and tried to do everything alone,” he said.

Taylor pointed to the typical eight-to-10-year timeline to develop and commercialize a vaccine.

“We sit here today looking backward, saying, ‘It only took two years.’ So, it's not delayed versus what would have been a normal expectation. We just weren't across the finish line as quickly as some of the other players,” she said.

When it was conditionally approved in the U.S. for adults 18 and older in July 2022, Nuvaxovid became the country’s first protein-based COVID-19 vaccine. Onlookers hoped this mechanism would appeal to those wary of the mRNA technology that bases both Comirnaty and Spikevax.   

Taylor believes this will still be an advantage. 

“With people starting to feel like the COVID vaccine is, understandably, less of an emergency, anything that helps to provide options and…motivation for people to get vaccinated is a very good thing,” she said.

Mamtani concurred, saying the market would be competitive for the fall 2023 vaccination campaign.

Newly minted Novavax CEO John Jacobs listed delivering an updated Nuvaxovid as his first priority in the company’s Q4 and full-year 2022 financial report. 

For Novavax to compete, however, it will need cash available for initiatives like direct-to-consumer marketing, Mamtani said.

Past Struggles and Future Prospects

Novavax has been on the verge of collapse before.

In 2019, Nasdaq threatened to delist the company after its stock fell below $1 for more than 30 days in a row. To reduce operating costs and stay afloat, Novavax sold two manufacturing plants and reduced its staff to 166.

This followed the Phase III failure of the company's RSV vaccine.

It appears Novavax is going into cash conservation mode again. Jacobs’ second priority is “to reduce our rate of spend, manage our cash flow and evolve our scale and structure.”

While sales from Nuvaxovid brought in just under half of the company’s 2022 revenue, the $1.9 billion in sales paled in comparison to the $4 billion to $5 billion projected by Novavax for last year.

In the same financial report, the company noted that its forward-looking statements “are subject to numerous risks and uncertainties” that could impact its 2023 results.

One of these concerns is an advance purchase agreement Novavax struck with Gavi, the Vaccine Alliance, in May 2021 to deliver 1.1 billion doses of Nuvaxovid to participating COVAX countries.

Due to a changing COVID-19 landscape, Gavi decided not to place that order, which terminated the APA agreement, Taylor said. Gavi is now trying to recoup a $700 million prepayment made to Novavax. The outcome of these negotiations could have significant implications for the company’s solvency.

Jacobs’ third stated priority is to leverage Novavax’s technology platform, capabilities and portfolio of assets to drive additional value beyond Nuvaxovid alone.

One high-potential product is a combination flu/COVID-19 vaccine, currently in Phase II studies. Like Nuvaxovid, this vaccine is based on the company’s Matrix-M adjuvant technology.

Taylor said that Novavax expects data from the current study in May or June 2023 and that, if positive, the company may look for a partner to help it take the vaccine forward.

“What we learned during COVID is that speed really matters,” she said.    

Given the company’s near-term liquidity challenges, Mamtani said it might be wise to pursue a strategic partner on the heels of this data. He suggested Sanofi, Merck or GSK as the probable frontrunners.

While Novavax’s stock fell precipitously with the February 28 report, Novavax has one significant advantage.

“I’ve never seen a company that has a commercial product and a platform that could have [these] applications not figure it out,” Mamtani said. “They’ll figure out a way to get through this.”