Novavax, Inc. (NASDAQ:NVAX) shares plummeted on Wednesday on news it faced a clinical hold on its CIC flu combination vaccine program after a serious adverse event (SAE) was reported in a Phase 2 trial participant.
The SAE, motor neuropathy, surfaced in September 2024, nearly two years after the individual received the vaccine in January 2023.
Analysts at Jefferies described the hold as "surprising," noting Novavax's historically clean safety profile.
Jefferies said that, on a call with Novavax, the company emphasized that it will receive an official letter from the FDA within the next 30 days and is committed to addressing the hold "as expeditiously as possible." The biotech firm will work closely with the FDA to determine if there is a causal link between the vaccine and the SAE.
Jefferies revised its price target for Novavax to $25, down from $31, citing increased uncertainty about the trial timeline.
Shares of Novavax were down nearly 20% on Wednesday afternoon at US$10.10.
Despite the hold, analysts expressed confidence in the company's other products, including its COVID-19 vaccine, stating that there is "no material impact" expected on current vaccine sales. The hold also does not affect Novavax’s partnership with Sanofi.
"We see uncertainty on the timeline and increased risk," Jefferies noted, but added that if the trial eventually succeeds, the upside could be significant.
The planned Phase 3 trial for the CIC vaccine will likely be delayed from the second half of 2024.