Novavax (NVAX) reiterated confidence in its manufacturing processes early Wednesday in response to a report outlining apparent struggles frustrating its Covid vaccine efforts. But NVAX stock still plummeted.
In morning trading on the stock market today, NVAX stock plunged 16.5% near 134.20 even though the company affirmed plans to achieve a capacity of 150 million doses per month in the fourth quarter.
“We are confident our vaccine will soon play a significant role in the global Covid-19 vaccine arsenal, differentiated by its potential to help address two major issues slowing the world’s ability to end the pandemic: global distribution challenges and vaccine hesitancy,” Chief Executive Stanley Erck said in a written statement.
Erck’s comments follow a Politico report that sent NVAX stock tumbling. Novavax is reportedly struggling to purify its shot enough to suit the Food and Drug Administration. The agency requires a Covid vaccine to be 90% pure. That means free of contaminants or unnecessary substances that could undo the vaccine’s effectiveness or introduce side effects. Novavax’s shot hovers around 70% pure, the Politico report said, citing an unnamed source.
As a result, a global initiative to deliver Covid vaccines to low- and middle-income countries is facing significant delays that could potentially worsen. Novavax is first working to launch its vaccine in those countries. It already has filed for authorization in India, Indonesia and the Philippines.
NVAX Stock Plummets On Manufacturing Concerns
Some of the issues were highlighted in a June 30 filing with the Securities and Exchange Commission.
“The U.S. government has recently instructed us to prioritize alignment with the FDA on our analytic methods before conducting additional U.S. manufacturing and further indicated that the U.S. government will not fund additional U.S. manufacturing until such agreement has been made,” Novavax said in the filing.
A representative of Novavax didn’t respond to Investor’s Business Daily’s questions regarding vaccine purity. In a news release, the company reiterated its “commitment to the stringent standards of production and manufacturing” for the vaccine.
Delays have depressed NVAX stock in 2021. In the second-quarter earnings news release, Novavax said it wouldn’t request FDA authorization for its Covid shot until the fourth quarter. Novavax is also planning to request the same of authorities in the U.K., Europe, Australia, Canada and New Zealand.
Vaccine Stocks Widely Pressured
Like other vaccine stocks, NVAX stock has crumbled since early October when Merck (MRK) announced its oral Covid pill reduced hospitalization or death by half.
Novavax’s vaccine is highly effective, offering north of 90% protection against Covid. But the vaccine is also difficult to produce. It uses insect cells, an older but complex technology.
Pfizer (PFE), with partner BioNTech (BNTX), and Moderna (MRNA) use messenger RNA technology. Dow Jones giant Johnson & Johnson (JNJ) delivers its vaccine with a modified adenovirus.
Novavax was among the companies tapped by Operation Warp Speed, an initiative to develop vaccines and treatments to target Covid. NVAX stock reached a high point after the company received $1.6 billion from OWS. Now, it’s possible Novavax might not even gain authorization in the U.S. if it can’t get vaccine purity levels higher.
Meanwhile, the global effort to deliver vaccines to low- and middle-income countries — run by a group called COVAX — has slashed its expectations for 2021 deliveries to 1.425 billion doses, down from its prior goal of 2 billion.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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