Thought of the Day - December 30 2021 - What's Happening with the Novavax Vaccine?

As you know Canada has approved four vaccines, however, as we are no longer using AstraZeneca and never did use Johnson&Johnson, our eggs are clearly in the mRNA basket. There was one vaccine manufacturer that applied for authorization and signed a deal in Canada almost a year ago - Novavax. It is still a bit of a mystery what is going on with Novavax, so I thought I would do some digging.

In order to successfully bring a vaccine to market you need three components:

1. A product. Actually creating a vaccine turned out to be easier than expected, the issue is more getting the dosing right in clinical trials.

2. Marketing. To convince the regulators, stakeholders, and those of the public who are interested, that you know what you are doing. (I must admit their slogan "Creating Tomorrow's Vaccines Today" may not have been the best choice).

3. Quality production. This is where J&J, and to a lesser extent AstraZeneca, screwed up.

There are eight vaccines approved by the WHO (with two additional variants under license in India). It says that Novavax is approved by 30 countries but this is basically the EU and the UK. And the Indian formulation is approved by three, the Philippines, Indonesia and India.

Production is now the issue for Novavax. Being a smaller company with no real manufacturing capabilities it is not easy trying to source adjuvants and solicit production companies that are being courted by others.

Novavax tried signing a number of deals with countries like Canada and Japan, hoping that we could provide production capabilities. These deals have yet to yield any fruit. This is the reason, like AstraZeneca, they turned to Serum Institute. As well as gaining access to the Indian market, the Serum Institute can also provide volume production for south-east Asia.

Novavax resubmitted its application to Canada with more clinical trial information at the beginning of November ( Thought of the Day - November 2 2021 - Meanwhile Back to the Vaccine Wars ). But so far nothing has been forthcoming from the Federal Government.

So what happens next? The stock jumped up with the approvals in mid-December but has since settled back down (please don't make investment decisions on this note as these are just my observations). However, Novavax is still to deliver product. There is a suggestion they may achieve this late in Q1 2022 - a year later than their first business plans. This late to the market, as well as the inevitable scaling issues, they may have another problem. If Omicron does turn out to be much less deadly, then the market for vaccines will collapse back to only the rich countries. And, in these markets, there are already a number of 800-pound gorillas around.

As far as approval by Canada. I think we will play the wait-and-see game. We will look for Novavax to complete an application in the US, and start to make good on European contracts. After all, we are still over-supplied with expiring mRNA - stuff that, unlike AstraZeneca, we are not even allowed to give away ( Thought of the Day - December 24 2021 - What Happens to All Our Expired Vaccines? ). The last thing we need is to add to our problems by encouraging Novavax to be successful.

Cheers

Cliff