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Global Economy

Who is behind Novavax

Federal Health Minister Karl Lauterbach is expecting the first delivery of the Corona vaccine from Novavax in Germany today. 1.4 million doses of Nuvaxovid are expected to arrive in this country, he said on Friday. Another million doses are to follow next week and then "further batches with a certain delay". In total, Germany has ordered 34 million vaccine doses from Novavax for the current year.

The interest in the vaccine seems to be great – apparently also because it is different from the previously approved vaccines against Covid-19. The Lower Saxony Ministry of Health reported almost 6,000 people on the waiting list for the new vaccine at the beginning of February. In Rhineland-Palatinate alone, around 5,000 interested people registered for a vaccination appointment with Novavax on the first day of activation. There are now 10,000.

Corona vaccine as the company's first major success

According to its own statements, the US company, whose vaccine was approved in Europe in December, has concluded supply contracts with various customers. The volume amounts to around two billion cans, of which 110 million cans in the USA and 430 million units in other western countries.

The protein-based vaccine against Covid-19 is Novavax's only major success so far. But who is behind the new beacon of hope? What other projects does the biotech company have? And how reliable are the supply agreements really?

Story full of disappointed hopes

Novavax was founded in 1987 in Gaithersburg, Maryland, USA. The head of the rather small company with around 800 employees is Stanley Erck. The 73-year-old, a veteran of the Vietnam War, has been running the company for more than ten years. "Novavax is developing breakthrough vaccines that tackle some of the world's most pressing infectious diseases," the company writes on its website. In addition to Covid-19, it focuses on seasonal flu, the respiratory syncytial virus (RSV), Ebola, MERS and SARS.

Erck's tenure has so far been marked primarily by setbacks. The Americans have often promised to have the groundbreaking solution to the diseases mentioned. She was never able to assert herself.

In 2005, Novavax developed a vaccine candidate against SARS and in 2012 against MERS. In 2014, the company, together with the University of Maryland School of Medicine, announced results that should prove the effectiveness of the two vaccines. However, they did not make it into the clinical phase 1 study, in which vaccines are tested on humans for the first time. Novavax finally succeeded with an Ebola vaccine. However, its development was ultimately not pursued further. Only one vaccine against seasonal flu successfully completed all clinical studies and is currently being approved.

Millions in support from Gates Foundation

In 2015, Novavax received a grant of up to $89 million from the Bill and Melinda Gates Foundation for work in RSV. The vaccine should be used in pregnant women to protect infants through maternal immunization. RSV is the most common cause of pneumonia and inflammation of the small airways in the lungs in children under the age of one. Erck announced it as "the best-selling vaccine in the history of vaccines". But this also failed.

Due to these undesirable developments and the lack of success, Novavax was on the verge of bankruptcy at the end of 2019. A third of the workforce had to go. In order to avoid bankruptcy, the company even had to sell its own production facilities. There was also a risk that the stock would be taken off the Nasdaq stock exchange. Another vaccine against the RS virus is currently in the phase 3 study. However, Novavax has not really sold anything yet.

"Approach to Never Die"

The company was therefore still in the deep red last year. Sales in 2021 were about $475 million, and the loss was almost as much at $420 million. The first protein-based corona vaccine could now change that: Analysts expect sales in the double-digit billions for the previous order volume of two billion doses alone. "Novavax will achieve global sales of five to six billion dollars this year with its vaccine," said Markus Manns, fund manager at Union Investment, recently to "Wirtschaftswoche".

According to estimates, the company could achieve net profits of around two billion dollars in 2022. Perseverance could finally pay off. Experts see it the same way. "I admire her tenacity, her perseverance, her approach of never dying," Roger Pomerantz, a former top executive at pharmaceutical giant Merck & Co. and current head of biotech company Contrafect, told the Wall Street Journal last year.

For the development of the corona vaccine, the US government under then President Donald Trump provided the biotech group with 1.6 billion dollars in 2020 as part of the "Warp Speed" project – the largest sum of the total of around four billion dollars program. An additional $388 million came from the international vaccine alliance (Coalition for Epidemic Preparedness Innovations, or CEPI for short). Then things went well again for the share on the Nasdaq. In just one year, the paper was able to increase a whopping 4970 percent to just under $ 320 by February 2021. Since then, however, the title has been on a rollercoaster ride and is currently only worth around 80 dollars.

US approval is still a long time coming

Because the development of the corona vaccine was also sluggish – despite clinical data that certified the vaccine's effectiveness of almost 90 percent. Delayed studies and approval procedures repeatedly threw Novavax back in competition with BioNTech/Pfizer, Moderna or Johnson & Johnson. The NVX-CoV2373 project was registered for a clinical study at the same time as that of BioNTech. But the problems kept piling up: Ordered gene samples did not arrive, production partners failed, test subjects dropped out and raw materials were not available.

After Nuvaxovid was initially only vaccinated in Indonesia and the Philippines, it was finally approved in the EU at the end of the year. On the other hand, it is still a long time coming, especially on the important US market. Novavax did not apply for approval there until the end of 2021, almost a year later than originally planned.

In addition, in the USA the approval procedures of the supervisory authorities also depend on whether companies can deliver their products without restrictions. That wasn't always the case. The possible delivery problems continue to cause uncertainty – also in Germany.

Will Novavax break through?

Health Minister Lauterbach said on Friday that Novavax had repeatedly pointed out that deliveries could not be made on time. But they are in close contact and he assumes that the delivery will arrive today. According to the ministry, four million doses of Nuvaxovid should be available in Germany by the end of March.

Due to its comparatively small number of employees, Novavax has a structural disadvantage. Unlike BioNTech, the company doesn't have an industry giant like Pfizer on its side. The company is now cooperating with the Indian Serum Institute – the largest vaccine producer in the world. Nevertheless, there are difficulties.

Because the production of protein-based vaccines is considered complex because it is carried out with the help of cell cultures in biotechnical plants. For a long time it was apparently not possible to produce the active ingredient in the required purity. The British analysis company Airfinity estimates that only slightly more than 400 million cans can be shipped in the whole year. It remains to be seen whether Novavax will achieve its long-awaited breakthrough this time.

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