Novavax Inc.’s coronavirus vaccine program just got the hand it needs.
The company has struck a deal with fellow Gaithersburg biotech Emergent BioSolutions Inc. to get its candidate to the clinic, less than two months since announcing its plans to develop a defense against the spreading virus that causes COVID-19 — and making it clear it wouldn’t be able to do it alone.
Deal terms were not disclosed.
Under the agreement, Emergent will serve as a contract development and manufacturing organization to produce the vaccine out of three Maryland facilities — one in Gaithersburg and two in Baltimore — based on Novavax’s technology, for preclinical testing and a phase 1 clinical trial. The partners said Tuesday they expect to initiate that phase 1 study within the next four months.
Both Novavax (NASDAQ: NVAX) and Emergent (NYSE: EBS) did not immediately return requests for comment. We will update this post as we hear back.
This work sits in Emergent’s sweet spot of teaming up with the federal government to address public health threats, with major contracts to fuel the national stockpile and products for chemical weapon threats, opioid overdose, anthrax exposure, smallpox, infectious diseases and others. “The increasing threat of COVID-19 requires a comprehensive response and we continue to evaluate various vaccine, therapeutic, and CDMO approaches to enable us to marshal resources to make a meaningful impact on this global public health emergency,” said Emergent President and CEO Bob Kramer in a statement.
Novavax has separately nabbed $4 million for the program from the Coalition for Epidemic Preparedness Innovations, or CEPI, a foundation that invests in vaccine development for emerging infectious diseases. And it's “having ongoing discussions on additional funding from CEPI” to shepherd the program through phase 1, Novavax said Tuesday. The initial funding “is critical to enable ongoing development of our COVID-19 vaccine candidates,” Novavax President and CEO Stanley Erck said in a statement.
Both moves are tremendous for Novavax, which has said its coronavirus program would require around $10 million just to get to a phase 1 study, plus more capital for subsequent clinical trials, regulatory approval and, eventually, a market launch. The company, which had $112.9 million in cash at the end of September, recently raked in $98.7 million from sales of common stock and could sell up to another $150 million more in shares. Novavax is scheduled to report earnings Wednesday.
Emergent reported at the end of February $1.12 billion in 2019 revenue, up more than 41% from $782.4 million in 2018. In the fourth quarter, revenue increased by more than $360 million from the fourth quarter of 2018, specifically from its smallpox vaccine and Narcan nasal spray. But revenue from its CDMO services decreased by $1.4 million year over year, with $25.5 million in the fourth quarter of 2019, because of work that did not renew.
Both companies saw stock bumps Tuesday. Emergent’s was up more than 10% to $57.87 per share at close, after taking a hit — among many — as the potential fallout from the coronavirus has sent shockwaves through the stock market. And Novavax’s share price closed up 6.3% at $10.65 apiece, continuing to feel the love on Wall Street since announcing its coronavirus vaccine work, after an exceptionally turbulent year.
Emergent and Novavax aren’t the only local companies hustling to address the proliferation of the novel coronavirus. Gaithersburg’s Altimmune Inc. (NASDAQ: ALT) is now, too, working to develop a candidate to protect against the virus and looking for a partner to shepherd it through the process. Germantown biotech Zalgen Labs LLC is already working on tools and testing for the next coronavirus outbreak. Nationally, that list comprises organizations like the National Institutes of Health, which is testing an experimental drug from Gilead Sciences Inc., and Massachusetts-based Moderna Inc., which could start human trials by the end of April.
Last week, President Donald Trump signed into law a bill that devotes $8.3 billion to address the coronavirus outbreak, which has caused economic turmoil, travel restrictions, event cancellations, hospital preparations and quarantines — and, as of Monday, was responsible for 3,809 deaths of 109,577 confirmed cases across 105 countries.
