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Novavax Stock Fell After Vaccine News. Rivals' Stocks Tell the Real Story. - Barron's

Novavax's Covid-19 vaccine, if approved, could shake up the market for other producers.

Andrew Caballero-Reynolds/AFP via Getty Images

Novavax shares closed down nearly 1% on Monday after the company reported surprisingly positive data on its Covid-19 vaccine, losing another 5.2% early Tuesday, but moves in other vaccine manufacturers’ stocks tell the real story.

Shares of Moderna (ticker: MRNA) dropped 5.2% Monday, while BioNTech’s (BNTX) American depository receipts fell 7.5%. Even Pfizer (PFE), which rarely moves in response to vaccine news, fell 1.3%.

Investors may have calculated that the strong efficacy data reported Monday, which includes strong results against so-called variants of concern, was already reflected in Novavax ‘s (NVAX) share price. The stock is up 86.3% so far this year, and nearly 300% over the past 12 months.

The selloff in stocks of other vaccine makers, however, suggests that investors may think that Novavax’s strong results could shake up the market for Covid-19 vaccine boosters that is expected to develop in the coming months.

Novavax could grab a share of that market for itself. Equally important, because it is expected to sell for a lower price than the messenger RNA-based vaccines developed by Moderna and the partnership between Pfizer and BioNTech, it could also affect what those companies can charge.

In a note out Monday, SVB Leerink analyst Mani Foroohar wrote that the Novavax vaccine could compete with Moderna in those markets not already grabbed by Pfizer.

If the vaccine is authorized, Foroohar, wrote, it is “likely to erode long-term contracted pricing power for 2022 and beyond, as more geographies follow the United States into an over-supply state.” He said that Pfizer and Moderna’s variant-specific vaccines, which are currently in trials, could give them a leg up in some Western countries. Yet the strong results from Novavax, and the company’s work on a combination vaccine that would protect against Covid-19 and the flu, “will be attractive for all markets,” Foroohar wrote.

Novavax’s vaccine appears set to be far cheaper than the Pfizer and Moderna versions. In a separate note, SVB Leerink’s Geoffrey Porges wrote that SVB Leerink expects Novavax to charge $4 to $5 per dose, in line with the AstraZeneca (AZN) and Johnson & Johnson (JNJ) vaccines, despite its stronger efficacy data. Pfizer, by contrast, is charging the U.S. $19.50 per dose for its vaccine, though pricing varies by country.

Porges wrote that he expects $1.3 billion in sales for Novavax’s vaccine this year.

Investors had been eager for results from Novavax, which reported positive data on a separate, U.K.-based Phase 3 trial of its vaccine in March. The data, when it came Monday, rewarded those their patience: The North American Phase 3 trial found that the vaccine’s efficacy was 90.4% overall. The company said that the efficacy against variants of concern and variants of interest was 93.2%, though not all of the positive cases were sequenced.

Novavax is also developing a combination vaccine that would protect against both Covid-19 and influenza. In a note on Monday, Cantor Fitzgerald analyst Charles Duncan wrote that the combo vaccine would draw premium pricing.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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