Failures of Covid vaccine maker Novavax Inc (NASDAQ:NVAX) and diagnostic start-up Lucira Health Inc (NASDAQ:LHDX) show that companies often succeed or fail, owing to the whims of the government.
Last week, while reporting Q4 earnings, Novavax raised doubts about its ability to remain in business and announced plans to cut spending.
The Covid-19 vaccine was Novavax's first and only commercial product in its 36-year history, Wall Street Journal writes. However, the product flopped after successful trials thanks to regulatory delays and manufacturing hiccups.
Operation Warp Speed awarded Novavax $1.6 billion to cover testing and manufacturing costs of its experimental vaccine in exchange for 100 million doses if the FDA authorized it.
Novavax's struggled to scale manufacturing, which delayed the start of its late-stage U.S. trial to December 2020.
By then, the FDA had authorized COVID-19 vaccines from Moderna Inc (NASDAQ:MRNA) and Pfizer Inc (NYSE:PFE). Yet there was still expected to be enormous demand for its vaccine in low-income countries and among Americans hesitant to get mRNA shots.
Novavax announced in June 2021 that its vaccine was 90.4% effective against symptomatic infection and offered 100% protection against moderate and severe illness—similar to the mRNA vaccines. But Novavax struggled to procure raw ingredients for its vaccine, including plastic bags to grow cells.
Rather than help Novavax increase manufacturing, Wall Street reported that Biden officials bullied Moderna to donate more doses to low-income countries to compensate for the Novavax shortfall.
The Moderna and Pfizer vaccines have been enormous commercial successes because of their flexible mRNA technology and support from regulators who have accelerated their reviews.
The FDA hinders rather than promotes innovation. Consider Lucira Health. In an investor report, Lucira blamed the FDA's "protracted" authorization process for its combination Covid and flu at-home test.
Lucira applied to the FDA for authorization of its novel test last May and expected to receive a thumbs-up by the end of summer before the flu season started. Canada authorized Lucira's test last August.
The FDA finally authorized Lucira's test two days after it filed for bankruptcy and past the flu season peak.