How does NOVAVAX solve the dilemma when COVID-19 vaccine sales plummeted by 90%?

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How does NOVAVAX solve the dilemma when COVID-19 vaccine sales plummeted by 90%?

Last month, Novavax knocked on the door of the US market with the idea of a “recombinant protein vaccine for the COVID-19”.

But with the disclosure of the second quarter earnings report, the story of the first FDA-approved COVID-19 vaccine Nuvaxovid (NVX-CoV2373) based on the protein technology route ushered in another realistic chapter.

According to results released on August 8, Novavax’s revenue in the second quarter was only $186 million, while the first three months of the year fell short of Wall Street expectations of $845 million, but reached $704 million.

Likewise, Novavax posted a historic breakout of a turnaround last quarter (net profit of $203 million) , and fell back below its baseline in the second quarter with a loss of $510 million.

As the only commercial product of Novavax, Nuvaxovid is certainly to blame. Specifically, this COVID-19 vaccine, which is advertised as a new option for groups who are not suitable for mRNA products, fell from $586 million to $55 million in sales in the second quarter (the cost of sales was as high as $271 million) , a decline. more than 90%.

Shares of Novavax tumbled more than 30% after the “revenue was lower than anyone predicted” earnings report. At the close on August 9, Novavax’s market value shrank to $3.147 billion.

Novavax CEO Stanley Erck responded that the decline in Nuvaxovid sales was largely related to “excess, obsolete or expired inventory and loss of sourcing commitments” from partners.

Ahead of final regulatory authorization last month, the U.S. Department of Health and Human Services (HHS) , the Department of Defense and Novavax announced a collaboration to secure 3.2 million doses of Nuvaxovid.

Under the plan, these vaccine doses will be provided free of charge to U.S. states, jurisdictions, federal pharmacy partners and federally qualified health centers. Now it seems that this may not alleviate Novavax’s urgent needs.

Novavax is not alone, global “delayed deliveries” are almost a foregone conclusion.

Citing data released by the US CDC, from December 2020 to May this year, the United States wasted about 82.1 million doses of COVID-19 vaccines, accounting for more than 11% of the total number of vaccines distributed by the federal government.

State health officials and pharmacies say that’s partly because minimum orders for vaccines are so large that they have more leftovers than needed.

Coincidentally, since the beginning of this year, European countries such as the United Kingdom, Denmark, and Switzerland have also begun to destroy expired COVID-19 vaccines.

Moderna, Pfizer/BioNTech have revised their cooperation agreement with the European Commission to allow the delivery of the COVID-19 vaccine that was originally scheduled to be delayed.

The global vaccination rate is approaching an “absolute bottleneck”-according to the statistics of the Our World in Data website, in the first half of this year, more than 60% of the world’s population completed 2 routine doses of vaccination.

Novavax, which has lost the upper hand, is difficult to see a breakthrough in conventional dose vaccination.

Previously, Novavax pinned its hopes on the roughly 27 million adults in the U.S. who have not received any coronavirus vaccines.

However, as of the press date, the information disclosed by the US CDC shows that only 7,381 doses of Nuvaxovid have entered the hands of the public.

Digging into the data, only 2,365 people were fully vaccinated with 2 doses of Nuvaxovid.

Various types of COVID-19 vaccine distribution and vaccination data in the United States (Source: CDC)

By comparison, about 128 million people in the U.S. were fully vaccinated with Pfizer/BioNTech’s vaccine Comirnaty, and another 77.47 million were fully vaccinated with Moderna’s Spikevax.

Fighting for authorization in the teenage population, and as a booster shot, has become Novavax’s top priority.

Nuvaxovid has entered 43 countries, but it is currently only approved for children aged 12 to 17 in the EU, India, Australia, Japan and Thailand, and has issued similar Application.

As a booster needle, Nuvaxovid has also been licensed in Japan, Australia and New Zealand.

However, as Novavax executive vice president and chief commercial officer John Trizzino said, Nuvaxovid’s market expansion has not been easy, and the global push to reach teens and strengthen needle-labeling efforts has taken longer than expected.

Another factor to pay attention to is the iteration from mutants. In the case of Nuvaxovid, the trials to support its EUA were conducted before the Delta and Omicron variants.

Based on efficacy estimates from that clinical trial, Nuvaxovid is more likely to provide some meaningful level of protection against COVID-19 due to Omicron, especially against more severe disease, Novavax’s briefing document said.

But recently, the Omicron BA.5 variant has come to dominate, which is more likely than earlier variants to evade immunity from vaccines and previous infections.

It should be noted that the data in the Novavax submission does not refer to Omicron BA.5.

On June 28, an FDA panel of experts proposed for the first time that vaccines should be replaced for different mutants.

Two days later, the FDA accepted the recommendation and notified the COVID-19 vaccine manufacturers to update the vaccine by adding the spike protein antigen of the Omicron BA.4/5 substrain to the booster shots in autumn and winter.

In addition to Nuvaxovid, Novavax is also developing a bivalent vaccine (NVX-CoV2373/NVX-CoV2515) against the Omicron variant.

In the first half of this year, the Phase III clinical study has been launched, and the study will last for 10 months. Novavax expects to obtain preliminary results as early as the second half of 2022.

And, shortly after obtaining regulatory authorization from the FDA, Novavax also entered into a new cooperation with SK bioscience to produce and supply a COVID-19 vaccine specifically for the prevention of Omicron, which will soon cover the Omicron BA.5 variant.

Last year, the two companies signed a CMO agreement to produce Nuvaxovid. After the new $29.8 million CMO agreement was signed, SK Bioscience will use prefilled syringes in vaccines produced next year.

SK Bioscience believes that prefilled syringes are safer and more convenient for inoculation compared to existing glass vial packaging.

This may be a good attempt to change vaccine waste – it is reported that the COVID-19 vaccine vaccinated in the United States is in multi-dose vials, which means that once the package is opened, all doses must be used within a few hours, otherwise they can only be discarded.

But in the end, Novavax still has to return to the absolute gap in the market.

Looking at the numbers, in the first quarter of this year, Comirnaty’s $13.2 billion in sales and Spikevax’s $5.9 billion in sales far exceeded Nuvaxovid’s $586 million.

By the second quarter, Comirnaty and Spikevax had generated sales of about $8.8 billion and $4.5 billion, respectively, despite the widespread “delayed deliveries” among vaccine makers, both of which only sold 5,500 in the same period. Wanmei’s Nuvaxovid is hard to beat.

Cruel competition has discouraged many pharmaceutical companies, including Johnson & Johnson, which obtained EUA before Novavax.

Johnson & Johnson has the only adenovirus-based Covid-19 vaccine on the U.S. market, but did not provide sales figures for the first quarter of 2022.

By the second quarter, the Covid-19 vaccine had reaped $544 million globally, beating expectations of $278 million.

However, in view of the restricted use of products due to safety issues, coupled with the global oversupply of COVID-19 vaccines and uncertainty in demand, Johnson & Johnson has previously decided not to provide COVID-19 vaccine sales guidelines and stop the production of COVID-19 vaccines.

J&J has shifted its focus to making a more revenue-generating product, an experimental vaccine against respiratory syncytial virus (RSV) that will be used in clinical trials for older adults in wealthy countries.

Some analysts believe that the RSV vaccine market could be worth $10 billion annually by 2030.

Johnson & Johnson, who has a big business and a big business, has a choice, but this kind of track change may not be easy for Novavax, at least the capital is worrying.

In May, Novavax reiterated its forecast for total revenue of $4 billion to $5 billion in 2022 and said it expects shipments and sales to increase in key markets in the second quarter.

Three months later, Novavax had to cut its forecast. The latest guidance points to 2022 sales of between $2 billion and $2.3 billion.

“We now expect that in 2022, we will not receive new revenue from the United States or COVAX (the COVID-19 vaccine implementation plan) .” Stanley Erck said on the conference call with regret.

Still, Novavax wanted to give it a shot. In April, Novavax’s other novel coronavirus/influenza combination vaccine achieved preliminary results in a phase I/II study, showing good tolerability and immunogenicity.

Novavax has said it will start a second phase of a dose-confirmation trial by the end of this year.

References:
1. Novavax shares shredded as Covid vaccine sales fall more than 90% in Q2; Endpoints

2. Struggling Novavax halves its sales forecast as COVID shot launch sputters; Fiercepharma

3. COVID-19 Vaccinations in the United States; CDC

4. SK Bioscience upgrades vaccine deal with Novavax; The Korea Herald

5. The fourth COVID-19 vaccine in the United States? Those Novavax missed and future; same freehand

6. FDA approves the first COVID-19 recombinant protein vaccine, is Novavax’s “Soros moment” coming? ; same as freehand

7. Johnson & Johnson’s 2022Q2 net profit fell by more than 20%, and mergers and acquisitions are still its main strategy;