Pomerantz Appointed Co-Lead Counsel in Novavax Securities Litigation

On January 26, 2022, U.S. District Judge Theodore D. Chuang of the District of Maryland appointed Pomerantz LLP as Co-Lead Counsel on behalf of Nuggehalli Balmukund Nandkumar and Jeffrey A. Gabbert, Co-Lead Plaintiffs with another Co-Lead Plaintiff in Sinnathurai v. Novavax, Inc., 21-cv-2910 (D. Md.), a securities action brought on behalf of a class of defrauded investors concerning allegations that Novavax, Inc. (“Novavax” or the “Company”) failed to disclose manufacturing issues with its lead vaccine candidate for COVID-19.

Novavax is a biopharmaceutical company that develops vaccines to prevent serious infectious diseases, including NVX-CoV2373, its coronavirus vaccine candidate for COVID-19.

Allegations against Novavax include that: (i) the Company had overstated its manufacturing capabilities and downplayed manufacturing issues with NVX; (ii) as a result, Novavax was unlikely to meet its timeline for applying for Emergency Use Authorization (“EUA”) for NVX from the FDA; and (iii) accordingly, the Company had overstated the likelihood of regulatory approval and commercial prospects for NVX.

On March 2, 2021, Novavax announced its 2020 financial results, in which it stated that it planned to file an EUA for NVX in the second quarter of 2021. The Company also stated that it projected its global manufacturing capacity for NVX to be over 2 billion annualized doses by mid-2021.

The truth began to emerge on May 10, 2021, when The Washington Post reported Novavax’s EUA filing for NVX would be delayed “until June at the earliest,” due, in part, to a regulatory manufacturing issue related to tests required to check the contents and quality of the vaccine. On this news, the Company’s share price fell $15.50 per share, or 8.8%, to close at $160.50 per share on May 10, 2021.

On the same day, after the market closed, Novavax confirmed that it was unlikely to seek an EUA for NVX until July 2021, at the earliest. On this news, the Company’s share price fell a further $22.32 per share, or 13.9%, to close at $138.18 per share on May 11, 2021.

On August 5, 2021, Novavax announced its second quarter of 2021 financial results in which it revealed that it expected to file for NVX’s EUA in the fourth quarter of 2021, rather than the third quarter of 2021. On this news, the Company’s share price fell a further $46.31 per share, or 19.6%, to close at $189.89 per share on August 6, 2021.

Then, on October 19, 2021, Politico published an article titled “‘They rushed the process’: Vaccine maker’s woes hamper global inoculation campaign,” in which it reported that it could take Novavax until the end of 2022 to resolve manufacturing quality issues with NVX, which include the methods it used to test and maintain adequate purity levels for the vaccine, before it could receive regulatory authorizations and approvals.

On this news, Novavax’s share price fell $23.69 per share, or 14.8%, to close at $136.86 per share on October 20, 2021.