Novavax pulls out of Covid-19 vaccine alliance with Gavi
Novavax is pulling out of its Covid-19 vaccine deal with Gavi, the Vaccine Alliance, a global partnership tasked with ensuring vaccine access in lower-income countries, following an alleged contract violation.
The Maryland-based company claimed on Friday that Gavi failed to purchase at least 350 million doses of its protein-based vaccine Nuvaxovid by the end of the year, per an advanced purchase agreement. Gavi, the World Health Organization and the Coalition for Epidemic Preparedness Innovations (CEPI) are co-leaders of COVAX, an effort to ensure that all participating countries, regardless of income levels, have access to vaccines.
Gavi paid Novavax $350 million last year and another $350 million in early 2022 as part of the agreement, according to the company’s Q1 report. However, Novavax said it has only received orders for 2 million doses from Gavi this year.
While Gavi was not immediately available for comment, the organization has reportedly denied a breach of contract. A spokesperson told Reuters on Tuesday that “it is clear that Novavax will not be able to meet its commitment to manufacture” the doses under agreement by the end of the year.
“Novavax has been ready to meet our commitment to manufacture and deliver doses for the COVAX facility. Given that vaccination rates in developing countries remain below targets set by public health authorities, our hope was that the Novavax vaccine might help to diversify the available COVAX vaccine portfolio and offer an ability to address key logistical and uptake challenges through our vaccine’s refrigerator stability and more traditional vaccine technology,” a Novavax spokesperson said in a statement on Tuesday.
Novavax said on Friday that it gave a written notice to Gavi terminating the deal, “effective immediately.” The spokesperson said Novavax “values its relationship with Gavi” and hopes to negotiate a new agreement.
The company’s stock $NVAX was down more than 12% on Tuesday afternoon, trading at around $16.56 per share.
The news comes as Nuvaxovid sales numbers continue to disappoint, leading CEO Stanley Erck to lower his full-year sales guidance the last two quarters. The vaccine won FDA authorization back in July, becoming the first protein-based Covid vaccine in the US, after suffering delay after delay for its EUA filing. It’s also on the WHO’s emergency use list, and won authorizations as a booster this month in Canada and the UK.
The vaccine raked in $626 million last quarter, though Erck lowered his full-year sales expectations to $2 billion, the lower end of a $2 billion to $2.3 billion range projected in Q2.
During the company’s Q2 call, Erck told investors and analysts that lower-than-expected demand from COVAX contributed to his lowering of full-year sales guidance.
“Globally and particularly with respect to COVAX, there was a surge of supply and when coupled with challenges COVAX had with the distribution into low- and middle-income countries, this limited the need for them to order contracted product from us and other vaccine manufacturers,” he said.
While the Access to Medicine Foundation noted “industry-wide” progress in its latest biennial report, the organization reported that low-income countries remain “widely overlooked” when it comes to drug and vaccine access.
“If the pandemic is to be a turning point in the fight for equitable access to medicine, companies must now scale their efforts to cover more products in their portfolios, and in a greater number of countries,” the foundation said in a news release.