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Novavax’s Covid Vaccine Is Real Competition for Pfizer and Moderna

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The Covid vaccine from Novavax is practically as effective as those from Pfizer/BioNTech and Moderna—but easier to distribute. So why is the stock down?

Karen Ducey/Getty Images

Novavax announced Monday morning that its vaccine against Covid-19 proved 90% effective in preventing the disease in a large study group.

While Novavax’s (ticker: NVAX) effectiveness level is slightly below those shown for the authorized vaccines from Moderna (MRNA) or the team of Pfizer (PFE) and BioNTech (BNTX), it far exceeds America’s third authorized shot from Johnson & Johnson (JNJ).

The Novavax vaccine was also tested at a time when more-infectious variants of the SARS-CoV-2 virus were on the rise in the U.S.—making its near-equivalent showing to the Moderna and Pfizer shots all the more impressive. Monday’s news sets Novavax up to be a strong alternative to those companies’ vaccines—and therefore an agent for price competition in developed countries and the underserved regions of the world, such as India.

Vaccine stocks sold off on the news: Novavax shares, included. In Monday morning trading, Novavax stock was off 2.6%, to $204.30, amid a flat market. The shares soared to nearly $330 in February, when the vaccine startup said that it had begun filing data with the U.S. Food and Drug Administration for an emergency authorization. Worries about raw-material bottlenecks in May pulled the stock below $120. By way of historical comparison, Novavax stock was languishing below $6 before the pandemic transformed the company struggling to develop a flu vaccine to one of the leaders in global efforts to find a Covid shot.

Shares of Moderna responded to the Novavax news by dropping 6% Monday to $205.30. Pfizer stock was down 1.3% to $39.60, while BioNTech’s was off 8% to $218.90. J&J stock slipped 0.5%, to $164.50. Strangely, German startup CureVac (CVAC) saw shares rise 1% to $98.90, even though the company is further behind Novavax in clinical trials of its shots.

Novavax said that it tested its two-shot vaccination among nearly 30,000 people aged 18 and older in the U.S. and Mexico. One-third of those got placebo shots, while the rest got the company’s combination of artificial proteins mimicking the virus’s characteristic spikes, with an additive to enhance antibody formation. It’s a different technology from the messenger-RNA approach used for the Pfizer-BioNTech and Moderna shots. That could make the Novavax product easier to distribute than the mRNA vaccines, which require special cold-storage.

In the Novavax trial, 63 members of the placebo group developed Covid symptoms, compared with 14 in the vaccine group—for a prevention rate of 90.4%. By comparison, Pfizer’s vaccine was 95% effective in its big trial; Moderna’s vaccine was 94.1% effective; and J&J’s one-shot regime was 72%. While rare side effects briefly paused the use of J&J’s shot, no serious safety problems emerged in the Novavax study.

On a Monday morning conference call, Novavax leaders were particularly proud of their product’s performance against the newer strains of the SARS-CoV-2 virus. The Pfizer and Moderna shots were tested over the summer of 2020. Novavax conducted large trials last year in South Africa and the U.K., but it didn’t start a big North American trial until late December.

“We conducted our efficacy evaluation period during a time when variants emerged in the U.S.,” chief medical officer Filip Dubovsky told listeners. Sure enough, among the Covid cases whose virus was genetically sequenced, two-thirds were of the concerning new variants. So the fact that none of the Covid cases developed more than mild symptoms was another achievement for the Novavax technology.

Novavax seems to be surmounting the manufacturing challenges that it warned of in May. In the September quarter, it expects to finish the required filings on its eight global plants, for authorizations in the U.S., U.K., Europe, India, and Korea.

“Our goal is to be up to a capacity of around 100 million doses a month by the end of the third quarter,” CEO Stan Erck said on Monday’s call, “and 150 million doses a month by the end of the fourth quarter.”

In the high-priced U.S., vaccine supply seems to be catching up with demand. So the late arrival of an authorized Novavax product has led Wall Street analysts to project another year of losses in 2021, with the average forecast on FactSet predicting a loss of about $6.40 per share on the year (excluding noncash and one-time charges). In 2021, however, the consensus forecast is for $35 per share in earnings. Most of those following Novavax stock rate it a Buy, with target prices that average about $240. That represents about 18% upside from today’s price.

Corrections & Amplifications: Novavax said it hopes to be making 150 million doses a month of its Covid-19 vaccine by the end of the fourth quarter. A previous version of this article incorrectly stated the wrong quarter.

Write to Bill Alpert at [email protected]