Novavax amends COVID-19 contract with Canada, snags $350M for unused shots
Published: Jul 10, 2023
By Tristan Manalac
Amid declining demand for COVID-19 vaccines, embattled biotech Novavax is revising its advanced purchase contract with Canada’s department of public works and government services, Reuters reported Friday.
Under the amended agreement, Novavax will provide Canada with fewer doses of its coronavirus shot Nuvaxovid and according to a new delivery schedule. Despite the change, the contract’s original value remains the same. Canada will also pay the biotech $349.6 million for forfeiting doses of its COVID-19 vaccine that had been previously scheduled for delivery. The settlement will be made in two equal tranches throughout 2023.
Novavax finalized its COVID-19 contract with Canada in January 2021 and was supposed to supply up to 76 million doses of its vaccine, which at the time was still in Phase III assessments. Canada procured an upfront 54 million doses and, prior to Friday’s amendments, had the option to buy an additional 24 million shots.
Under the revised contract, Canada reserves the right to terminate the agreement if Novavax does not secure approval to produce Nuvaxovid in the country’s Biologics Manufacturing Center (BMC) by December 31, 2024, according to Reuters.
Health Canada, the government department chiefly responsible for health policy, authorized Nuvaxovid for adults in February 2022. This was followed by approval in adolescents aged 12 through 17 years in December 2022. However, Novavax must secure a different approval to produce its COVID-19 vaccine locally in the BMC, for which it signed a memorandum of understanding with Canada in February 2021.
Novavax was supposed to be one of the biggest winners of the pandemic. Instead, its coronavirus shot Nuvaxovid, the company’s only approved product, was slow in getting to market. Throughout its development, Nuvaxovid encountered several challenges, including safety issues such as myocarditis and severe allergic reactions, as well as manufacturing problems that led to delays in its Phase III trial.
The FDA finally granted Nuvaxovid its emergency use authorization in July 2022, when much of the domestic and international markets had already been captured by Novavax’s competitors Moderna and Pfizer/BioNTech.
Following Nuvaxovid’s disappointing launch, Novavax announced in its full-year 2022 financial report that “substantial doubt exists regarding our ability to continue,” adding that the company might not be able to sustain operations beyond February 2024.
Novavax has adopted a more positive outlook since and announced a cost-cutting plan during its first-quarter 2023 earnings report. The recent recommendation from the FDA’s Vaccines and Related Biological Products Advisory Committee that updated COVID-19 shots should target the XBB Omicron subvariant could also provide an opportunity for Novavax to carve out a strong market niche for Nuvaxovid.