No end to the Novavax deflation

"Selling on the news” was expected after the FDA’s green light for Novavax’s late-to-market Covid vaccine, Nuvaxovid, but the 26% share slump was still surprising. A safety update from EU regulators probably did not help – the EMA updated the shot's label to include risk of severe allergic reactions, of which two cases have been reported. This brings Nuvaxovid’s label into line with other Covid vaccines so it should not have caused undue alarm, suggesting that the stock’s plunge probably reflected a resetting of expectations. Weak demand is already forecast for the vaccine. A 3.2 million dose US government order earlier this week was at the low end of expectations; Covid vaccine uptake is slowing across the western world, fatigue to which Nuvaxovid will not be immune. Not having a booster option yet might also be a hindrance; the FDA’s emergency use authorisation concerned a primary vaccine schedule. Novavax bulls contend that the more traditional technology behind the shot will encourage the vaccine-hesitant to come forward, although lack of interest in Valneva’s similarly “traditional” technology blunts this argument somewhat. Concern about what the group can realistically deliver here is only likely to grow.