Why Novavax could be a bigger COVID vaccine winner than Pfizer and Moderna

Some Americans could receive COVID-19 vaccines before the end of 2020. Two coronavirus vaccines are in a privileged position to obtain US Emergency Use Authorization (EUA) next month – Pfizerof (NYSE: PFE) and BioNTechof (NASDAQ: BNTX) BNT162b2 and Modernof (NASDAQ: ARNM) MRNA-1273.

Novavax (NASDAQ: NVAX) is lagging behind with its experimental vaccine candidate against the NVX-CoV2373 coronavirus. The company plans to report the results of an advanced stage study conducted in the UK in early 2021, with the results of its planned late stage US study likely to come a few months later.

The old adage that “the early bird catches the worm” is often true. The first arrivals are often the most successful. In this case, however, there is a realistic chance that Novavax will be a bigger winner from the COVID vaccine than Pfizer or Moderna in the long run.

Obstacles to jump

Novavax must first overcome several obstacles to overtake Pfizer and Moderna. Perhaps the biggest challenge is that both companies have already reported fantastic intermediate efficacy results for their respective coronavirus vaccine candidates. Moderna wowed observers earlier this month, reporting 94.5% efficiency for mRNA-1273. Pfizer, which had reported 90% or more efficacy for BNT162b2 a week earlier, quickly followed up with more data showing 95% efficacy for its vaccine.

It remains to be seen whether NVX-CoV2373 can achieve an efficiency level close to 95%. However, Novavax’s early results were so good that many analysts called its COVID vaccine best-in-class. The extra boost provided by the adjuvant Matrix-M of biotechnology could make a key difference in the effectiveness of NVX-CoV2373.

Of course, Novavax’s coronavirus vaccine must also demonstrate a good safety profile. Based on the results announced so far, this shouldn’t be a problem. However, it is certainly possible that late stage testing will uncover a potential problem.

One hurdle that won’t be too big for Novavax, however, is lining up supply agreements for NVX-CoV2373. The company has agreements with the United States, Canada, United Kingdom and Australia to provide a total of at least 276 million doses.

A two-for-one option

Novavax could very well defend against Pfizer and Moderna if NVX-CoV2373 realizes its potential. But there’s another option that just might make the company a far bigger winner than either of these rivals in the long run.

In October, Novavax announced that it had formed a team to focus on obtaining regulatory approvals in major global markets for the influenza vaccine candidate NanoFlu. The biotech also said this team will explore the potential of pairing NanoFlu with NVX-CoV2373 in a flu / COVID-19 vaccine combination.

Neither Pfizer nor Moderna currently have seasonal influenza vaccines in clinical development. Pfizer is working with BioNTech on an influenza vaccine candidate, but it is still in pre-clinical trials. Moderna has indicated that she plans to develop a vaccine against influenza messenger RNA (mRNA). Again, however, biotechnology has not put forward any candidates in clinical trials.

This potentially places Novavax at the helm of a combined influenza / COVID-19 vaccine. The company has a flu shot and a COVID vaccine that may be on track to get regulatory approvals. Novavax may well be the first to launch a combination vaccine after the pandemic ends. Assuming that the new coronavirus that causes COVID-19 becomes a seasonal virus like the flu, it wouldn’t be shocking for Novavax to achieve greater market success than Pfizer or Moderna (at least for a while).

Winner, winner

Novavax could also be a bigger winner from the COVID vaccine than Pfizer or Moderna. In fact, biotechnology is already a bigger winner on this front. I’m talking about the performance of stocks.

Novavax’s share price has skyrocketed over 3,000% so far this year. Pfizer and Moderna are nowhere near providing such a huge gain.

If NVX-CoV2373 achieves a high level of efficacy and a solid safety profile in advanced stage testing, Novavax will undoubtedly go much higher. The biotech stock has an even greater opportunity if Novavax successfully advances a combined influenza / COVID-19 vaccine.

The coronavirus vaccine market is unlikely to have a win-win business. However, some vaccine manufacturers may be bigger winners than others. And Novavax seems to have a pretty good chance of being one of those biggest winners.