Feds Give $ Billions to Unproven Drugmakers

Jon Markman

Say what you will about the federal response to the pandemic but it’s hard to deny that a lot of money is being thrown at medical therapeutics.

CNBC reported Tuesday Novavax (NVAX) and Regeneron (REGN) are the latest two firms to receive funding for covid-19 vaccine research under the Operation Warp Speed program.

Novavax is getting a whopping $1.6 billion to fund development, commercialization and production of its vaccine. The company claims it’s on track to deliver 100 million doses by January of 2021.

Warp Speed has awarded Regeneron $450 million for the development of covid-19 anti-viral antibody cocktail. Doses are supposed to be ready by the end of the summer.

If all of this seems much faster than normal, it is. Most vaccines take multiple years to develop.

The White House is throwing a lot of money at therapeutics to combat covid-19 with the caveat that testing, commercialization and production must happen quickly.

Separately, Warp Speed in March invested $456 million in a Johnson and Johnson (JNJ) vaccine project. Moderna (MRNA) got $486 million in April. A partnership between Oxford University and AstraZeneca (AZN) received $1.2 billion in May. And later that same month, Emergent Biosolutions (EBS) was awarded $628 million to expand manufacturing capability for its covid-19 vaccine.

All of these projects are moving at breakneck pace to get vaccines to market quickly, at scale.

The Novavax news is especially interesting because phase 1 trials began in May in Australia. Results are expected by the end of July, with phase 2 trials set to follow immediately thereafter. Assuming the secondary trials succeed, Novavax managers expect to begin phase 3 trials in the fall.

To date, however, Novavax has brought no vaccines of any kind to market. Shares are up about 30% in early trade Tuesday. Buyers at this level should take their meds and beware.