Novavax stock tanks on report of COVID-19 vaccine manufacturing troubles

Shares of Novavax plunged more than 23% in pre-market trading Wednesday as the company is reportedly facing significant hurdles with its vaccine manufacturing. 

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In July 2020, the U.S. government awarded Novavax $1.6 billion to help develop the testing and manufacturing of its coronavirus vaccine. However, multiple sources familiar with the matter told Politico that Novavax has been unable to produce a COVID-19 vaccine that meets the Food and Drug Administration's purity standards.

Though the FDA works out purity levels with each manufacturer, vaccine batches generally should reach at least 90% purity. One source said that Novavax has struggled to get anywhere close to that goal, while another said Novavax's purity levels currently are hovering around 70%. A low purity level can increase the likelihood that contaminants or unnecessary substances are in the final vaccine, which could make it less effective or put patients at risk of a reaction to an unknown ingredient. 

While Novavax recently attested to analytics and testing issues in a filing with the Securities and Exchange Commission, the sources reportedly claim that the company's issues are more concerning than previously understood. 

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The COVAX initiative, which aims to provide billions of COVID-19 doses to low- and middle-income countries, forecast in September that it will be able to provide a total of 1.425 billion doses by the end of the year and 2 billion doses by the first quarter of 2022. But Politico's sources warned that the international vaccination campaign could likely fall short of its goals as a result of the potential production problems.

"In response to a recent news article citing anonymous sources, Novavax confirms our confidence in our ability to deliver our high-quality vaccine," the company said in a press release Wednesday. "Further, we underscore our ongoing commitment to the stringent standards of production and manufacturing for our recombinant nanoparticle protein-based COVID-19 vaccine candidate with Matrix-M™ adjuvant."

Novavax says it has maintained "active conversations with various regulatory agencies in key markets" and incorporated their feedback into its submissions for vaccine authorization, which it is currently in the process of completing. The submissions come after Novavax reported in June that the phase 3 trial of its vaccine determined it was 93% effective against predominantly circulating COVID-19 variants of concern and variants of Interest.  

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Novavax expects to complete multiple ongoing regulatory submissions within the next couple of weeks in the United Kingdom, Europe, Canada, Australia and New Zealand. The company has already filed for an emergency use listing with the World Health Organization and for authorization in India, Indonesia and the Philippines.

It also expects to file for emergency use authorization in the U.S. before the end of 2021 and estimates that its global supply chain could achieve a capacity of 150 million doses per month by the end of the fourth quarter.