Novavax CEO on COVID-19 vaccine trial progress

Novavax CEO Stanley Erck joined Yahoo Finance Live to discuss the company's COVID-19 vaccine trial progress and his business outlook for the company.

Video Transcript

ADAM SHAPIRO: Turning our attention back to COVID-19 and the companies which are making vaccines, Novavax released their earnings this hour. And Anjalee Khemlani has a recap for us, as well as a bit of the discussion she had with their CEO. Anjalee.

ANJALEE KHEMLANI: That's correct, Adam. And we know that the company has been a clinical stage company for quite some time. And this could be the year that it turns a profit. We've seen similar stories with companies like Moderna and others that are in the therapeutic space that are hoping to sort of ride the COVID wave. Had a chance to speak with the CEO, Stanley Erck, about just that and when they plan to see that come to fruition. So here's what he had to say.

STANLEY ERCK: [INAUDIBLE] of the United States is we just ran a trial. We've just enrolled 30,000 people in a trial. We enrolled 30,000 people in something, like, six weeks. They're all enrolled. We're accruing cases now, is what you have to do in a trial. And our expectation is, is that we'll have enough cases in that trial in the US to have data maybe a month or two later than the UK. So the question on timing is, will the FDA feel comfortable looking, using just the 15,000-person study in the UK and the South African data? Will that convince them to evaluate for EUA?

And that decision will cost a month or two as to when they look at it. If they wait for all of the US data, then you've got a lag of a couple of months. If they evaluate the UK data, they'll be within a few weeks of the UK approval, so. Long answer for that--

ANJALEE KHEMLANI: Definitely waiting to hear to see if they'll accept that for sure. I know they've been asked about it. But looking at how the other companies have handled the EUAs right now, if you do, in fact, have to wait until the full process is done, what learnings can you take from what has already happened to apply it to when you have to apply for the EUA?

STANLEY ERCK: Well, it's-- what lessons have we learned? I think what we will learn by waiting for all of the US data is, is that we'll have a much bigger safety database on top of the one we already have. And plus, we'll see what the impact of whatever strains are circulating in the US are and compare it to the UK and the South African data. It just gives a bigger database to the FDA. So, all of the same data. I mean, it's all the same manufacturing data, same safety database that we're building, so.

ANJALEE KHEMLANI: Fair enough. And talking about that, the manufacturing, I know that's been really a topic of conversation for the US, you know, with different reasons why sort of hurdles were met. I know that you've done a lot. And last time we spoke, you mentioned the significant expansion that Novavax has and not just invested in, but also through partnerships, been able to achieve. So looking through that lens, what do you anticipate, or what have you seen in terms of waiting for the build-up for the US doses?

STANLEY ERCK: Yeah, so we're building up doses now. We've now started, you know, the three parts of the vaccine. There's the making of the spike protein, which is a biologic. It's one process. There's the making of the adjuvant, which is a chemical formulation process. And then there's putting it all together in what's called fill finish, where you fill it into a vial, put the vial into a box, and have a label and all that sort of thing. So all three of those are now on our radar screen. And we're actually filling. We just started filling recently so that we can build up inventory so that by the time we get an EUA, we'll have lots of inventory that we can ship immediately.

ANJALEE KHEMLANI: OK, so now looking forward, this is obviously going to be able to help boost the company really and put it on the stage. I've seen some projections that count Novavax among the vaccine-- larger vaccine companies in coming years. So talk to me about the pipeline right now. I know there's also a flu combination COVID vaccine in the works. What else do you have on tap?

STANLEY ERCK: Well, so it turns out over the last decade, we've had-- this is now we have three vaccines that have been in phase three pivotal trials. We have an RSV vaccine, Respiratory Syncytial Virus. It's the biggest cause of hospitalization of kids under one-year-old. And it's also a big cause of hospitalization in older adults. And that's a very important vaccine. People have been working on it for 60 years-- no success. So we're hoping to have that vaccine with us.

But it's a seasonal respiratory vaccine, just like flu. And nine months, 10 months ago, we announced pivotal phase three flu data and showed that we have potentially the best flu vaccine in the world. And you combine that with with a COVID vaccine with the data we have for safety and efficacy there, and they all use the same platform. So in theory, long term for the company, we can not only get through the pandemic, but presumably, COVID, it's going to be a seasonal annual vaccine. And you can combine two or all three of those pathogens, viruses, in one vaccine. So you get one shot, protected against the three most common causes of respiratory illness. It would be huge.

ANJALEE KHEMLANI: Absolutely, and I know we're all waiting to see how that happens. But talk to me now about the way that this is affecting the company financially. You've been, you know, in a clinical stage, as a clinical stage company for quite some time. The COVID vaccine could be the first vaccine to make it to the market. And you've already had so much investment, a combination of funding from the government plus the expense that you've had to put in not just in research and development, but also for regular expenses and for the expansion. So what does it look like right now? Are you now a fully revenue making company?

STANLEY ERCK: Yeah, well, we've done something in the last year that probably, in normal times, would take three to four years to build. We've gone from-- we had $100 million in the bank a year ago, which was about six months' worth of money. We now have well over a billion dollars in the bank, with more coming in from advanced purchase agreements and grants. We have, you know, a market cap that was $100 million a year ago. And it's in the 15 plus billion dollar range right now. And so that allows us to have financial flexibility.

We had 150 people total in the company in the US and in Sweden. we now have 800 people in the company. And that's all built within the last six or seven months. And so we've been able to attract just spectacular, experienced manufacturing engineers, scientists, clinicians, that have all developed products in their pastime. And to come here is an easy shift because you're working on one of the most important problems in health care. And so, we've got a lot of good people. It has changed the company dramatically.

But it's fast. It's 24/7, literally seven days a week here. And I just got asked how my weekend was, and I said, what? And so, anyway, but that's what we're doing. And we will become, this year, our expectations are that we will be a revenue generating profitable company based upon COVID this year, and then expanding that to our platform as well.

ANJALEE KHEMLANI: So, as you can hear, really a lot of energy behind this company right now, knowing that it's been a clinical stage company for quite some time. But we don't have a clear date on the vaccine just yet. As you just heard, you know, the idea still sort of on the table of aggregating the clinical trial data from different countries and then submitting it to the US. I did speak to him after the call and after the interview. And he did say that, you know, the FDA hasn't responded to that idea yet, but it is something that they have done in the past. So it remains to be seen whether or not they'll do that as well during this pandemic. Back to you guys.