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Updated: 26-May-20 11:11 ET
Novavax's potential for rapid vaccine development stokes rally in market (NVAX)
- Last week, Moderna (MRNA) provided a jolt to the market after it reported encouraging results from its Phase 1 study for its COVID-19 vaccine, mRNA-1273. The company also stated that it hoped to begin a Phase 3 trial as early as July, sparking hopes that a vaccine would be available sooner-than-expected.
- The excitement didn't last long, though, because healthcare website Stat News published a report the next day, stating that more data was needed to assess the effectiveness of mRNA-1273.
- Today, the stock market is surging again on promising vaccine data. This time, Novavax (NVAX) is providing the news, reporting the enrollment of the first participants in its Phase 1/2 clinical trial of NVX-CoV2373.
- There's plenty of optimism surrounding NVAX's prospects of winning the race for a vaccine, as illustrated by the stock's 1,000%+ gain so far this year.
- The company first identified NVX-CoV2373 as a viable candidate in January. Since then, a couple positive events have catapulted NVAX towards the top of the list of potential COVID-19 vaccine producers.
- On April 8, the company reported that its vaccine candidate was highly immunogenic in animal models. Also, high levels of spike protein-specific antibodies with ACE-2 human receptor binding domain blocking activity and SARS-CoV-2 wild-type virus neutralizing antibodies were observed after a single immunization.
- About a month later, the Coalition for Epidemic Preparedness Innovations (CEPI) announced its intention to invest up to an additional $384 mln to advance the development of NVX-CoV2373. Including CEPI's $4 mln commitment in March, the $388 mln in total funding represents the single largest investment the organization has made in any vaccine candidate.
- The magnitude of its investment signifies a very strong vote of confidence. This confidence is likely partly attributable to NVAX's history of developing vaccines for pandemic-level diseases like Ebola, MERS-CoV, and SARS.
- Regarding today's announcement, what really stands out is the timing and speed of advancement. NVAX says that it expects to announce Phase 1 trial results in July.
- Typically, each phase of a clinical trial lasts for several months. However, this combined Phase 1/2 approaches allows for more rapid advancement.
- Assuming the Phase 1 results are positive, NVAX expects to quickly begin the Phase 2 portion in multiple countries. Phase 2 would assess immunity, safety, and COVID-19 reduction across a broad age range.
- If the Phase 2 portion of the trial is successful, and if the timeline of analyzing results is similar to Phase 1, it seems possible that NVAX could have a vaccine by the end of the year. That possibility is providing a spark for the stock market this morning.
