Novavax CEO Stanley Erck speaks with Yahoo Finance's Anjalee Khemlani about the company's cut forecast for vaccine sales, its outlook for COVID booster development, and growth.
JULIE HYMAN: Shares of Novavax continuing to fall sharply this morning after the Maryland-based biotech company slashed its full year revenue guidance by about 50%. The company no longer expects any revenue from the vaccine alliance COVAX due to soft demand and also due to its later entry into the US market caused it to lose ground to Pfizer and Moderna.
Joining us now to discuss these shortfalls is Novavax CEO Stanley Erck. Stan, sorry for the setup there, but this is the situation that you guys find yourselves in. You are a one-product company at this point, and the product is not selling as well as you perhaps hoped. So I would ask you kind of simply, what now?
STANLEY ERCK: Well, the good news is, is, we have, I think, the number one vaccine in terms of characteristics. We have very good efficacy data. We have broadly neutralizing antibodies from our vaccine that actually stimulate antibodies against everything all the way through BA.5 that you've heard about. Good safety profile, easy to use. It's refrigerated.
So the fundamentals of the vaccine are great. And we're transitioning into a commercial market from now until next year. And I think that it takes time to do that. I think the issue with respect to COVAX is that they are supplying low and middle income markets around the globe, and there's been a lot of vaccine available to those markets. And so we've put off any projections of sales to COVAX this year and I don't know what's going to happen next year with the COVAX.
In the US, we just got our emergency use authorization, which is terrific news. And we're going into the market now. And what we need to do is get a couple of indications for boosting and for adolescents, both of which we've applied for, and our expectations are that we'll get those approvals hopefully soon. But we're dependent upon the FDA for those approvals right now. And so, the uncertainty is the uptake this year, but so we're forecasting as conservatively as possible. And I think next year, we're setting the stage for next year.
ANJALEE KHEMLANI: Stan, Anjalee here. I know that you talked about that booster market. You said on the call that you won't be able to make that October deadline for the booster campaign on that BA.5, but you're still looking at, broadly, that booster market as a key target. At this point, do you think you just might be too late?
STANLEY ERCK: No, I don't think we're too late. I think that we will be-- the booster that we have for what's called the Wuhan strain or the 2373, our current product, we have great data that shows our vaccine works very well against all of the different variants that are circulating or have circulated. And so our expectation is the vaccine will be very useful for that. And then with the BA.5, we're making that now. It'll be available later this year.
ANJALEE KHEMLANI: So let's recap sort of what's going on. You're looking at the booster market still. Later in the year, for that BA.5, you're getting not as strong demand from the global market as you anticipated with relation to COVAX and the US. You're not anticipating any new orders for the year. Does that include the boosters then?
STANLEY ERCK: No, we're not forecasting something that we don't have yet. What I anticipate is-- well, we're waiting to hear. We're talking with the US government. I just-- we don't have a forecast right now.
BRAD SMITH: And when you think about some of the changes that the company is going to be looking to make going forward, how do you look across research and development to make sure that even in some of the future efforts that Novavax does have, that perhaps it doesn't kind of fall behind or have a candidate that comes to the scene a little bit later than some of the other competitors? Are you looking across executive or management changes, even, with regard to that?
STANLEY ERCK: No, I think that we have a very strong platform. And the platform, as I think we've mentioned on this show before, includes other respiratory vaccines. We have a flu vaccine. I think it's being tested in combination with our COVID vaccine. We've completed a phase 1, 2 trial. We're starting a new trial and a phase 2 that will lead to a phase 3 efficacy trial next year. I think we're very strong. The platform is very strong and particularly in respiratory vaccines.
ANJALEE KHEMLANI: Stan, looking at the output then, manufacturing wise, you anticipate that this will disrupt those global manufacturer partners that you have, including the Serum Institute and SK. Are you seeing a difference in the US and low middle income demand versus other countries?
STANLEY ERCK: No, I think that first of all, let me address the manufacturing coming late to the game. We started without any manufacturing capacity 2 and 1/2 years ago. And we've built a tremendous network of manufacturing right now with the plants that you mentioned and in Serum in India and the Czech Republic and SK in Korea. We have plenty of manufacturing capacity to serve all the markets that we're addressing.
JULIE HYMAN: Stan, finally, I would ask you, as you look at this situation where you guys find yourselves right now, any lessons learned from the past six months that you can now apply going forward, not just for the COVID vaccine development and manufacturing, but also for further things in the pipeline?
STANLEY ERCK: Great. Well, when the book's written, I'll be able to tell you what all the lessons learned are.
JULIE HYMAN: Yeah, I guess when you're in the midst of it, it's a little tricky to say. Stanley, thank you so much for being here. Appreciate it. Stanley Erck, Novavax CEO, and our Anjalee Khemlani as well. Thank you.
STANLEY ERCK: Thank you both.