Novavax plans to update its Covid shot for new variants, and NVAX stock outperformed its vaccine rivals on Friday.
The decision follows an advisory committee meeting at the Food and Drug Administration. A panel of independent experts voted unanimously in support of yearly Covid booster shots. They also voted to harmonize strain selection among vaccine makers. This would put Pfizer with partner BioNTech, Moderna and Novavax on the same page when it comes to selecting the right targets for their updated boosters.
The panelists favored an aggressive timeline for strain selection to booster launch. Experts would pick the strain target in May or June with a goal of launching the updated boosters in September.
"These timelines favor mRNA (messenger RNA) manufacturers, given their speed advantage," SVB Securities analyst Daina Graybosch said in a note to clients.
But on today's stock market, vaccine stocks Pfizer and Moderna sank a respective 1% and 2% while NVAX stock and BioNTech shares edged higher. Novavax stock rose 2.8% to close at 11.29.
NVAX Stock: Another Vaccine Option
Novavax emphasized the benefit of offering people choices for Covid vaccines. The company uses a protein-based platform, which differs from its rivals' messenger RNA shots. Novavax's approach could garner acceptance from people hesitant to receive vaccines using the newer messenger RNA technology.
"Offering vaccine choices — and ensuring continuous access to those choices — must be at the center of any strategy to protect public health against Covid-19," Novavax's Chief Communications Officer Silvia Taylor said in a written statement.
During the meeting, Novavax leaned in favor of a longer lead-time to update the vaccines, SVB's Graybosch said. She doesn't have a rating on NVAX stock.
"Novavax argued that their platform has greater breadth in variant coverage, allowing for less-frequent strain changes," she said. "They also stated their preference to follow the influenza model more closely with strain recommendation by the end of the first quarter to ensure adequate time for them to build supply for the upcoming season."
Vaccine Stocks All Face Pressure
NVAX stock peaked in February 2021 and has since skidded precipitously. Despite winning myriad new authorizations for its vaccine, the company is facing the same decline in demand as other vaccine makers. Other vaccine stocks have also felt pressure.
Graybosch, the SVB analyst, said the FDA panelists' vote on Thursday is a small boon for vaccine makers. But what's really necessary is a change in public perception, she said.
"It is not yet clear to us that harmonization of vaccine composition or evidence that the bivalent (updated) boosters provide meaningful protection against death, hospitalization, and even symptomatic infection will be sufficient to shift behavior," Graybosch said.
In the U.S., updated vaccines from Pfizer/BioNTech and Moderna are available to all people age 6 months and older. These vaccines are bivalent, meaning they target multiple strains of the virus.
Currently, the strains they target are no longer dominant in the country. Less than 16% of all people have gotten an updated Covid booster.
Bearishly, NVAX stock has a worst-possible Relative Strength Rating of 1. This puts shares in the bottom 1% of all stocks in terms of 12-month performance, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
