Novavax Tanks, RSV F Vaccine Disappoints In Two Studies

Gaithersburg, MD-based biotech company, Novavax, Inc.’s (NASDAQ:NVAX) shares plunged 82% in the pre-market trading after the company announced disappointing top-line data from a couple of studies on its experimental respiratory syncytial virus (RSV) F-protein recombinant nanoparticle vaccine candidate (RSV F Vaccine) in older adults.

Phase III Study Fails to Hit Efficacy Goals

The randomized, observer-blinded, placebo-controlled phase III Resolve study on RSV F Vaccine that was conducted in 11,856 older adults aged 60 years and above, failed to meet the pre-specified primary or the secondary efficacy objectives. Also, the vaccine candidate failed to show efficacy. However, it was found to be well tolerated.

We note that the primary objective of the study was to establish efficacy in the prevention of moderate-severe RSV-associated lower respiratory tract disease, as defined by the presence of multiple lower respiratory tract symptoms. The attack rate for the phase III primary objective was about 25% of that observed in the phase II study.

Novavax said that initial analyses and review of the key aspects of the study do not raise concerns related to the execution of the study and data collection, among other things. The company expects preliminary immunogenicity data over the upcoming weeks and expects to analyze the study data in further detail.

Phase II Study Also Shows Lack of Efficacy

Novavax also reported top-line data from the phase II rollover study on RSV F Vaccine in older adults. The study enrolled 1,329 older adults from the previous phase II study. The primary objectives of the study evaluated safety and serum anti-F IgG antibody concentrations in response to immunization with the RSV F Vaccine.

Data revealed that this study showed immunogenicity in all active vaccine recipients, and there was a 6-fold increase in anti-F IgG in the placebo-vaccine arm, which was found to be consistent with the phase II efficacy study. However, the low attack rates and the absence of efficacy of a single immunization observed in this study were also seen in the Resolve study.

The company anticipates improved vaccine efficacy from the second year of dosing. Complete evaluation of immune responses will help further analyze these data. Novavax expects to provide a detailed update at the company’s investor and analyst meeting scheduled for next month.

Target Market

Per the company’s press release, the spread of RSV, which occurs annually, has an incidence rate of 2.5 million infections per year in the U.S. This respiratory infectious disease is increasingly being accepted as a significant cause of morbidity and mortality in the population of 64 million older adults. Moreover, RSV is accountable for nearly 207,000 hospitalizations and 16,000 deaths among adults older than 65 each year.

Given that there are no vaccines available to prevent RSV, there exists significant unmet need for treatments options as well as healthcare costs associated with the treatment for this disease.

NOVAVAX INC Price

NOVAVAX INC Price | NOVAVAX INC Quote

Considering that RSV F Vaccine is a key candidate for Novavax, results from these studies fail to impress. On the second-quarter 2016 conference call, the company had noted that results from Resolve and rollover would support discussions with regulatory agencies. The company had even said that positive Resolve study results would allow the company to file for FDA approval in 2017.

Novavax has projected RSV F Vaccine to generate peak revenues of $6–$8 billion worldwide, subject to approval.

In addition to older adults, the company is evaluating RSV F Vaccine for two other susceptible target populations – infants via maternal immunization and children six months to five years of age (pediatrics).

With no approved product in the company's portfolio at the moment, and RSV F Vaccine being its most advanced pipeline candidate, investor focus is expected to remain on updates pertaining to its development.

Novavax is a Zacks Rank #4 (Sell) stock. Some better-ranked stocks in the health care sector include ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) , Anika Therapeutics Inc. (NASDAQ:ANIK) and Geron Corporation (NASDAQ:GERN) . All the three stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>