Concerns about prospects of COVID vaccine maker Novavax sink shares

The stock fell 28.3% to a three-year low of $6.64 around 10:30 a.m. ET (1530 GMT), while its Frankfurt-listed shares also slumped more than 27%.

The company — whose COVID-19 vaccine is its only marketed product after 35 years in business — on Tuesday flagged significant uncertainty around its 2023 revenue, funding from the U.S. government, and pending arbitration with global vaccine alliance Gavi.

Novavax’s shot, a traditional protein-based vaccine, was pitched as an alternative to those from Moderna (MRNA.O) and Pfizer-BioNTech (PFE.N) in the hope it would win over skeptics of newer mRNA technology, but manufacturing and regulatory delays led to sluggish uptake in key markets.

In the United States, where the vaccine was authorized in July 2022, only around 80,000 of its shots have been administered, according to government data.

n Europe, the shot was initially given the green light in December 2021. Altogether, only 219,395 doses have been administered of nearly 13 million distributed in EU/EEA countries, according to data from the European Centre for Disease Control up to Feb. 23.

The vaccine was also endorsed by UK regulators last year. The Department of Health and Social Care did not immediately respond to a Reuters query on how many doses have been deployed so far.

Novavax, like other COVID vaccine makers, is also gearing up for changes to the way the vaccines are rolled out, with global regulators expecting vaccination campaigns to be conducted once a year, similar to flu inoculations.

Companies will need to change their vaccine each year to match circulating strains. Novavax faces near-term risks as protein-based vaccines take longer to produce than mRNA-based competitors, Novavax CEO John Jacobs has said.

Jefferies’ analysts said they were lowering Novavax’s peak COVID-19 market share to 15% from 25%, and cut their price target on the U.S. stock to $68 from $90. B Riley Securities’ analysts also slashed their price target to $10 from $29.

The challenges ahead of Novavax are unsurprising given the very late entry of its COVID-19 vaccine as countries transition to a post-pandemic environment, said Lee Brown, global sector lead for healthcare at research firm Third Bridge.

“While there is the potential for a substantial booster market … we don’t expect Novavax to be a major player in the booster opportunity.”

As of last close, Novavax’s U.S.-listed shares were down 97% from their February 2021 record high of $331.68.

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Source: Reuters