- Novavax, a Maryland-based vaccines company, suffered a major setback on Thursday, announcing results from a large Phase 3 study which showed its lead vaccine candidate was no more effective than a placebo.
- Shares in Novavax collapsed on the news, dropping by over 80% in early Friday trading. Novavax, which said it was "surprised and disappointed" by the results, had envisioned peak annual revenues for the vaccine reaching as high as between $6 and $8 billion, according to a regulatory filing released last month.
- The vaccine targets a serious infection known as respiratory syncytial virus (RSV) that leads to over 200,000 hospitalizations each year. Results from the study showed it missed both the primary and secondary endpoints in the trial.
The failure of the RSV F vaccine erased nearly $2 billion in value from Novavax's market capitalization overnight, pushing shares down near penny-stock territory. While Novavax said it still believes there is a "path forward" for the RSV vaccine, Thursday's setback leaves the company facing an impending cash crunch with little hope of commercial revenues in the near-term.
The Phase 3 study in question was testing the RSV F vaccine versus a placebo in nearly 12,000 older adults. Data showed the vaccine was no better than the placebo in preventing moderate-to-severe RSV-associated lower respiratory tract disease.
Novavax did note annual seasonal RSV attack rates were lower during the Phase 3 trial than a prior mid-stage study, suggesting a more mild RSV season this year. Executives speaking on an earnings call after the first quarter had said they believed this year's season would be consistent with prior years, although study data was still blinded at that time.
While the company plans to further investigate potential causes for the trial miss, it does not believe there was any issues with trial execution, data collection, data integrity, or drug product quality.
Novavax is also testing the RSV F vaccine for maternal immunization aimed at protecting newborn infants through the first 90 days of life. But that Phase 3 study, which was launched in December 2015, is expected to last between two to four years.
Funding that trial, and other studies testing Novavax's other pipeline candidates, will take a lot more cash. In a recent earnings report, company executives estimated current cash levels could fund operations for a minimum of 12 months.
Novavax had roughly $89 million in cash and equivalents, along with another $276 million in marketable securities, as of June 30. Development efforts for the maternal immunization trial will be supported in part by a nearly $90 million grant from the Bill and Melinda Gates Foundation, but the company has no commercial revenue to pay for further expenses.
Furthermore, Novavax's other clinical candidates likely face much less lucrative markets than a successful RSV vaccine would have. A quadrivalent seasonal flu vaccine is in Phase 2 testing, and an Ebola vaccine was well-tolerated in a Phase 1 trial.
But several big pharmas already market flu vaccines and Merck recently announced its Ebola vaccine had won speedier reviews from regulators on both sides of the Atlantic.
Novavax plans to provide a more in-depth update on the RSV F vaccine at its upcoming investor meeting, scheduled for October 11.