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Share to FacebookShare to LinkedinTopline Shares of Novavax plunged Wednesday morning after a report highlighted manufacturing problems that imperil the company’s ability to produce billions of Covid-19 vaccine doses earmarked for lower-income countries, making it the latest vaccine-maker posting staggering losses in the stock market after massive gains during the pandemic.

Novavax said it remains confident in its ability to bring a Covid-19 vaccine to market after shares … [+] plunged 20% Wednesday morning.

SOPA Images/LightRocket via Getty Images Key Facts Shares of the Maryland-based biotechnology firm plunged 23% at market open Wednesday before settling at about $145 by 11:45 a.m. EDT, down about 10% from their prior close and wiping about $2 billion from Novavax’s market value, which now stands at $11 billion. 

The stock’s woes started Tuesday evening after Politico reported the company faces significant hurdles in garnering regulatory approval for its Covid-19 vaccine despite pledging to deliver about 1.1 billion doses to low- and middle-income countries through the World Health Organization’s Covax initiative.

Citing anonymous sources with knowledge of the company’s operations, the report claims the methods used to test the purity of Novavax’s Covid-19 vaccine, which has yet to garner regulatory approval in any country, have failed to meet regulatory standards. 

Novavax hit back at the report in a statement, saying it remains confident in its ability to deliver as many as 150 million doses per month by the end of the fourth quarter and adding that it expects to complete regulatory submissions in key markets including the United Kingdom, Canada and Australia within the next couple of weeks.

Despite its declaration of confidence, the company has previously acknowledged it may not be able to effectively produce its vaccine in a timely enough matter to address global demands because raw material shortages have negatively impacted its manufacturing efforts.

Crucial Quote  “Covax continues to be challenged for adequate supply,” Krishna Udayakumar, director of the Duke Global Health Innovation Center, told Politico. “In that context, Novavax’s manufacturing challenges and delays have been massively disruptive.”

Key Background Thus far, Covid-19 vaccines have proven to be highly effective in preventing serious illness and the market’s best defense against the virus—making them a massive boon to a slew of businesses heading up their development. Moderna forecasts about $19 billion in sales from Covid-19 vaccines this year, while Pfizer expects the shots will help pull in about $33.5 billion. Novavax, on the other hand, doesn’t yet have a revenue-generating product despite raising more than $2 billion—including $1.2 billion from the United States last year—to help fund its Covid-19 vaccine development. 

Tangent Shares of fellow vaccine-maker Moderna have also taken a hit in recent weeks. The stock ticked up 0.6% Wednesday but is still down 31% from an all-time high in August after Bank of America warned expectations for future Covid-19 vaccine sales don’t justify the company’s lofty valuation. In their note, Bank of America analysts said more intense competition as Covid-19 research advances marked one of the biggest risks to Moderna stock prices.

Surprising Fact Despite their recent plunges, shares of Novavax and Moderna are still up 47% and 370% over the past year, respectively, outperforming the S&P 500’s gain of nearly 32%. 

Further Reading Patent Waivers Won’t Impact Big Pharma’s Bottom Line—But Could Slow Covid Vaccine Rollouts (Forbes)

‘They rushed the process’: Vaccine maker’s woes hamper global inoculation campaign (Politico) 

Moderna Crash Wipes Out $22 Billion In Value After Merck’s Covid Pill Triggers Vaccine Stock Plunge (Forbes)

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