Key Takeaways

• The Food and Drug Administration put clinical holds on Novavax's COVID-19 and flu combination vaccine and its standalone flu shot because of safety concerns.

• The moves came as one patient who took the combination shot reported nerve damage.

• The company said it was working with the FDA to get the information necessary to resolve the issue and allow the company to move forward with testing.

Novavax (NVAX) shares plummeted nearly 20% Wednesday after the Food and Drug Administration (FDA) stopped research on the biotech firm's experimental combination COVID-19 and flu vaccine and standalone flu shot following a report of nerve damage in one patient who took the combination injection.

The company announced the FDA placed its clinical hold on the treatments because of "a spontaneous report of a serious adverse event (SAE) of motor neuropathy in a single CIC Phase 2 trial participant outside of the U.S. who received the vaccine in January 2023."

Novovax Doesn't Believe 'Causality Has Been Established'

Novavax Chief Medical Officer Dr. Robert Walker said although the company doesn't believe "causality has been established," it was working closely with the FDA "to provide the necessary information that will allow them to better understand this observation and resolve the clinical hold." Walker added that Novavax's goal is to begin a Phase 3 trial "as soon as possible."

The company noted that its current COVID-19 vaccine is not impacted by the FDA action.

Even with today's selloff, shares of Novavax have more than doubled this year.

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