Novavax executives stand to collect millions even if covid-19 vaccine doesn’t work
While the advancement of clinical trials is a positive sign in the development of a drug, it’s not a guarantee the vaccine will ultimately succeed.
Executive compensation experts and patient advocates were troubled by the idea of tying a massive payout to a short-term milestone. “Drug companies like Novavax are getting billions of dollars from taxpayers to develop a COVID-19 vaccine, so it’s certainly concerning to see their executives get massive payouts before we know if the vaccine actually works,” Eli Zupnick, a spokesman for consumer watchdog Patients Over Pharma, told Reuters.
The Trump administration awarded Novavax a $1.6 billion vaccine contract earlier this month as part of its Operation Warp Speed initiative. The deal with the publicly traded Maryland company, which has never brought a vaccine to market in its 33-year history, will cover late-stage clinical trials and secure 100 million doses of vaccine for the government. Novavax has said that it expects to have its vaccine ready for distribution by late 2020.
According to the company’s filing with the U.S. Securities and Exchange Commission, Novavax awarded 140,000 stock options to John Trizzino, its senior vice president, chief business officer, chief financial officer and treasurer; 165,000 to Gregory Glenn, the president of research and development; and 125,000 to John Herrmann, senior vice president, general counsel and corporate secretary. Erck, the CEO, was granted 400,000 options.
Novavax did not immediately respond to a request for comment.
Like other drugmakers scrambling to combat the coronavirus, Novavax is pursuing manufacturing plans even before it is certain its vaccine candidate will prove effective and pass regulatory hurdles. The strategy is designed to bring the prospective vaccine to the population as fast as possible.
Novavax is developing vaccines for influenza, Ebola, respiratory syncytial virus and Middle East respiratory syndrome, but does not yet have any products on the market, according to its website. In March, the company said it had received $388 million for coronavirus efforts from the nonprofit Coalition for Epidemic Preparedness Innovations. Novavax has genetically engineered a coronavirus spike protein that is expected to trigger an antibody response.
The company’s share price has ballooned since it announced the development of a coronavirus vaccine candidate and has risen dramatically as nonprofit and government funding have poured in. As of Tuesday’s closing, Novavax stock is worth more than 31 times its value at the beginning of the year, with the company’s market capitalization currently at $8.3 billion. In the two weeks since the Trump administration placed a significant bet on the company, shares have surged more than 30 percent.
