Novavax was a COVID vaccine underdog. Now it’s in financial trouble.

Novavax was seen as one of Operation Warp Speed’s riskier bets to develop a coronavirus vaccine. The small Maryland biotech company had no marketed products when the Trump administration chose it in July 2020 to join the race for a COVID shot.

What it did have was a promising technology using moth cells to cultivate vaccine that scientists believed offered a chance of fighting the pandemic.

But its promised vaccine did not arrive until late in the pandemic, and now the company faces serious financial challenges. Novavax issued a “going concern” warning to investors Tuesday, meaning its ability to keep operating is threatened by its financial woes.

The company’s negative disclosure caused the stock price to plunge even further from its speculative peak of $290 a share two years ago. On Wednesday, the stock traded below $7.

The root cause of the company’s problems was what it has described as raw material shortages and manufacturing setbacks. By the time it won authorization for its vaccine in July 2022 - more than 18 months after its major rivals - the demand for coronavirus vaccines had plunged in the United States and around the world. It was too late for Novavax to make a serious impact.

Now the company is faced with figuring out how to build an appetite for a vaccine. It has a long way to go. The number of Novavax shots delivered in the United States, just 1.1 million, compares with more than 1 billion delivered by Pfizer-BioNTech and Moderna combined. Counting overseas sales, the company says it has delivered 100 million shots in all.

“I knew there were big hurdles,” the company’s newly installed CEO, John Jacobs, said in an interview Wednesday. “The rare ingredients of success are here. We have a proven product that is safe and effective.”


Novavax is preparing for the coronavirus to become an endemic illness requiring seasonal shots, Jacobs said. The company also is looking to position itself as an alternative to mRNA vaccines. Its shot may appeal to people who don’t trust mRNA vaccines, have a medical reason not to take the mRNA shots or are looking for a shot with fewer short-term side effects like fever and fatigue, analysts and experts have said.

The Novavax vaccine also is easier to store and handle than the mRNA vaccines, which require ultracold storage, making it a good choice for delivery in low-income countries with marginal infrastructure.

Novavax plans to sell its vaccine for less than mRNA shots, Jacobs said, although he declined to disclose details.

Despite the company’s struggles, specialists laud the Operation Warp Speed strategy of picking multiple companies with vaccine candidates early in the pandemic. Novavax has been awarded $1.8 billion in funding from the government.

“The idea was, let’s put a bunch of horses in the race, hoping that at least one of them will cross the finish line,” said John D. Grabenstein, director of scientific communications for and former global director of medical affairs for Merck vaccines. “Because nobody knew three years ago which one of these bets would succeed, it was absolutely the appropriate thing to do.”

Novavax still has a chance to capture “a small but meaningful share” of the coronavirus vaccine market over the long haul, once the coronavirus reaches a post-pandemic status and a stable market for seasonal vaccines emerges, seasonal analysts at TD Cowen equity research said Wednesday. The company also is conducting clinical trials on a combined COVID and flu shot.

Novavax was seen as a gamble from early in the pandemic. The Trump administration awarded upfront purchase agreements to some big multinational pharmaceutical giants, including Pfizer, Johnson & Johnson and AstraZeneca. Novavax stood out for its small size and lack of prior commercial success.

The Gaithersburg company had previously suffered a major clinical trial failure of an experimental vaccine for respiratory syncytial virus, or RSV. In 2019, it was struggling financially and warned investors then that it was in danger of faltering. But the underlying science of its vaccine platform - an updated version of traditional vaccine methods - remained of interest to public health officials around the world and in the United States.

After the coronavirus arrived, Novavax received a $1.6 billion contract from Operation Warp Speed, which was later boosted to $1.8 billion. The company acquired additional pledges of funding from the Coalition for Epidemic Preparedness Innovations, an international vaccine group, of nearly $400 million.

All that backing sent the stock soaring, boosting the wealth of key executives. Company insiders sold stock valued at $165 million between May 2020 and March 2022, according to VerityData, a financial research firm. Stanley Erck, the firm’s former chief executive, and Gregory Glenn, president of research and development, sold $48 million and $42 million worth of stock, respectively, according to VerityData. In the interview, Jacobs declined to comment on stock sales by executives.

The company has said it may have to pay back some or all of the $697 million in advance payments that it received from Gavi, an international purchasing consortium. Novavax and Gavi are heading to arbitration over Gavi’s decision not to purchase Novavax’s vaccine last year, the company said. A Gavi spokesman told Reuters last year that Novavax was not able to deliver a contracted 350 million doses of its vaccine.

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The Washington Post’s Daniel Gilbert contributed to this report.