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Msg  142209 of 164812  at  9/13/2021 11:02:34 AM  by

dbeckedo


 In response to msg 142169 by  bensonfuller
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Re: stock warrior

 
The sad fact is that management overreached in 2020. They were a science company, a small R&D outfit. Governments are used to buying drugs from BP players with established and inspected production facilities. They should have partnered with one of the BP companies -- Merck comes to mind.

So their science turned out very well -- the cheapest, most-effective, with the least side effects, storage at normal temperatures, stable, etc. vaccine. But they discovered over the past year that setting up industrial plants at scale *during a pandemic* and its associated shortages of key materials, even with some government support was very difficult indeed.

BioNTech was a similar R&D company. They partnered with Pfizer and PFE dealt with the production issues and shortages and leaned on governments to get them what they needed to deliver a vaccine fast. They are now the 3rd most profitable company in Germany and they have $20 billion in the bank.

If Novavax had decided to use the COVID pandemic to morph their company into a big player by offloading vaccine production to BP, they could have been in the same position today. Maybe an even stronger position since they appear to have the best vaccine. BNTX is now worth $60 bil. Novavax could have been worth the same or more, which translates to around $850 per share.

With the money that they then would have had in the bank, they could have focused on Nanoflu and their RSV vaccine and multivalent COVID vaccines. With $20 bil in the bank, they could have decided to set up some factories for their booster shots. Eventually they would have become a BP company.

Now they have the nightmare of quality control for facilities scattered all over the world, dealing with people speaking different languages and living in different time zones. All while the Delta variant is still raging in many parts of the world. How will this end well? Even Moderna, which is far ahead of Novavax, has been stumbling with production issues. J&J also had problems.

I'm happy to hear (HCW conf today) that NVAX now has all their QA issues resolved. And I look forward to hearing that they have submitted an EUA somewhere and even better that a government drug agency somewhere has approved said EUA. But I'm not holding my breath (or the stock) until that actually happens -- "sometime in the fourth quarter".

Unfortunately, the market appears to have made a significant top on September 2nd, and now is in correction mode. MRNA and BNTX are selling off. I doubt NVAX will be far behind. "Sometime in the fourth quarter" is not good enough for Mr. Market in September.

Management had one very big decision to make in early 2020. Unfortunately they made the wrong call.


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