Novavax: Covid shots became commodities faster than imagined

This is shaping up to be an unpredictable few months for Novavax. The biotech company’s Covid-19 vaccine finally received US regulatory approval only last summer. Yet this week it warned that there was “substantial doubt” over its ability to stay in business until next year.

At its peak in September 2021, the biotech group had a market value of more than $20bn. It is now worth less than $600mn. Novavax pitched its protein-based vaccine as an alternative to those offered by Moderna and BioNTech/Pfizer. It hoped to target the tens of millions of Americans who remain unvaccinated.

But manufacturing and regulatory delays meant Novavax received the green light long after many countries had attempted a return to normality. Less than 80,000 of its shots have been administered, according to government data. That is a tiny sliver of the 671mn doses injected in the US. Demand is unlikely to pick up. Much of the global demand for initial shots and boosters has already been met. A supply glut means governments and agencies are cutting back on purchases.

Novavax is not the only Covid-vaccine maker to disappoint Wall Street this year. Shares of Pfizer and rival Moderna have shed more than a fifth of their values as demand receded.

Pfizer has warned that it expects sales from its Covid-19 products to bring in just $21.5bn this year, compared to $56.7bn last year. At Moderna, which derives most of its sales from Covid-19 shots, analysts are predicting a steep drop-off in sales, with revenue expected to fall from more than $19bn last year to $7.6bn this year.

None of this bodes well for latecomer Novavax, which has racked up $2.4bn of losses over the past two years. Founded in 1987, it had never marketed a vaccine in the US before Covid-19. Before the pandemic began, the company was running low on cash and was on the verge of being delisted. It now risks revisiting that fate.

The rise and fall of vaccine maker shares is instructive. Not so long ago, nations were fighting over Covid shots. The vaccines have become a humdrum commodity far faster than investors expected.