Latest Vaccine News from Novavax, Arcturus, Disappoints Street

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There are not enough Covid-19 vaccines approved by

Pfizer,

BioNTech and Moderna, so it was good news that

Novavax

and

Arcturus Therapeutics Holdings

they were moving into the next phases of testing their vaccines.

But when Novavax (ticker: NVAX) said Monday that it was beginning its Phase 3 test in the United States, the stock dropped 10% on the day, to close at $ 116.85. It was up 1% in early trading on Tuesday. The reaction to the Arcturus news was even more pessimistic.

After Monday’s shutdown, Arcturus (ARCT) said it will conduct a phase 2 trial of its vaccine in Singapore. It published data from its initial clinical study of the injections, which use messenger RNA technology similar to vaccines from Pfizer (PFE), BioNTech (BNTX), and Moderna (MRNA).

However, when analysts studied the Arcturus data, they found it unimpressive. With a wave of downgrades Tuesday morning, Arcturus shares fell 52% from Monday’s close to $ 43.93.

Novavax started a Phase 3 study in the UK earlier this year, and that 15,000-person trail is now fully enrolled. Company scientists are waiting to see what difference emerges in the Covid case count between those receiving placebo injections and those receiving the Novavax vaccine.

The first trials of the injections generated impressive levels of virus-neutralizing antibodies in the recipients. The vaccine contains protein particles that resemble the spikes of the SARS-CoV-2 virus, which Novavax produces through a standard genetic engineering process.

Starting this week, Novavax aims to enroll 30,000 volunteers in the United States and Mexico for its phase 3 study. Public health experts worry that recruiting for such trials of placebo-controlled Covid vaccines will become more difficult. , following US approvals for the Pfizer / BioNTech and Moderna vaccines. By starting its foundational test now, Novavax is behind earlier starts from developers like

Johnson and Johnson

(JNJ), even as Pfizer and Moderna increase production.

Perhaps as an incentive, Novavax plans to administer the active vaccine to two-thirds of its volunteers and the placebo to a third. The early developers divided their allocations half and half.

The disappointment in Monday’s Phase 1 provisional data from Arcturus centers on the levels of antibodies generated by its shots. The company has raised hopes that its vaccine will stand out by providing immunity after just a single dose. But after the first of two injections in the Phase 1 trial, antibody levels were only comparable to the levels seen in patients recovering from a Covid-19 infection. The second boost achieved only minimal improvement, Guggenheim analyst Seamus Fernandez noted in a note Tuesday.

The Guggenheim analyst maintained his Buy rating on Arcturus, but said in his note that the data “raised more questions than it answered.” Rival vaccines, including Novavax’s, generated much higher levels of antibodies after two injections. Unless Arcturus can show that a single dose of its vaccine is superior, Fernandez said, its product may not be a viable competitor.

Other analysts were less forgiving. Arcturus shares saw five downgrades after Monday’s data, including four that lowered it to Hold and one that lowered it to Sell.

At Raymond James, analyst Steven Seedhouse said in a Tuesday note that he is downgrading Arcturus from an above-market performance (the equivalent of a hold) because the single-dose levels of neutralizing antibodies were “disappointing.”

Data from the phase 3 trial of the Pfizer-BioNTech and Moderna vaccines showed that levels of neutralizing antibodies correlated with the Covid protection of the injections, Seedhouse noted. So, with Arcturus’ interim data only equal to that of convalescent Covid patients, rather than several times more like the other vaccines, investors will not be interested in Arcturus unless it can demonstrate its advantage of one dose at a time. Phase 3 trial, wait.

Write to Bill Alpert at [email protected]