Novavax Inc. (Nasdaq: NVAX) inked a Memorandum of Understanding (MOU) with Gavi, the Vaccine Alliance (Gavi), to supply up to 1.1 billion cumulative doses of their recombinant protein-based COVID-19 vaccine candidate known as NVX-CoV2373 to the COVAX Facility—a subsidy to help low to middle-income countries (LMICs) access COVID-19 vaccine product. The actual product would be manufactured by the Serum Institute of India (SII), which already has a production and distribution deal with Gavi. With pivotal Phase 3 clinical trials ongoing in the United States and Mexico as well as the United Kingdom—where recent interim data reveals positive results. So, the way this deal will unfold, if all goes according to plan, Novavax supplies wealthy countries with its vaccine product targeting COVID-19 (assuming its authorized by regulatory authorities) while the SII would generate a tiered pricing schedule for low to middle income countries.
What is COVAX?
COVAX is the vaccines pillar of the Access to COVID-19 Tools (ACT) Accelerator, co-led by the Coalition for Epidemic Preparedness Innovations (CEPI), Gavi, and the World Health Organization (WHO), all collaborating with both developing world and developed world manufacturers, UNICEF, the World Bank and various non-governmental organizations and other so-called civil society groups to work together to better ensure fair and equitable access to vaccines for every country around the world. With the change in U.S. administration it now participates along with 190 other participating economies.
CEPI Funding of Novavax
CEPI has already provided critical support to the U.S.-based company including a commitment of about $400 million to advance early clinical development and production scale-up in multiple facilities worldwide. Novavax has created a global supply network to ensure there can be adequate and equitable supply of NVX-CoV2373 across the globe.
A Big Commitment
Now consistent with the mission to boost the supply of COVID-19 vaccine product, Novavax licensed its NVX-CoV-2373 technology to SII with no upfront, milestone or technology transfer payments. Now with such a strategic arrangement in place, Novavax and SII both commit to execute on the delivery of 1.1 billion doses to the COVAX facility.
Who is the SII?
Serum Institute of India (SII), based in India, is the world’s busiest vaccine maker as measured by volume. Founded by billionaire Cyrus Poonawalla in 1966, the company is a subsidiary of the holding company Poonawalla Investment and Industries.
How is an ROI Generated?
Novavax will supply doses to high-income countries (HICs) with SII handling the majority of supply to both LMICs and upper-middle-income countries (UMICs) utilizing a tiered pricing schedule. So, this means that SII will take their costs plus the gratis license and mark up for the LMICs and UMICs market.
NVX-CoV2373, according to Novavax press releases, was the first vaccine candidate targeting COVID-19 to show clinical efficacy (89.3% in UK study) against the original SARS-CoV-2 strain as well as both of the rapidly emerging variants in the United Kingdom and South Africa. While this vaccine cannot trigger nor replicate the underlying SARS-CoV-2 virus, it can also be shipped in a ready-to-use liquid formation. Because it’s stable at 2° C to 8° C (refrigerated) it can be distributed leveraging existing channels making distribution more pragmatic than some of the other vaccine candidates such as the mRNA-based products.