Valneva (NASDAQ:VALN) recently reported positive results from a late-stage study of COVID-19 vaccine VLA2001. The vaccine uses Dynavax's (NASDAQ:DVAX) Cpg 1018 adjuvant. In this Motley Fool Live video recorded on Oct. 20, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss the potential for commercial success of this late-to-the-party vaccine.


Keith Speights: Let's switch to some other COVID-19 news from earlier this week. Valneva, ticker there is VALN, reported positive results from a Phase III study of its COVID-19 vaccine candidate, VLA2001. This vaccine uses the CpG 1018 adjuvant developed by Dynavax.

Brian, what do you make up of these results, and do you think Valneva and Dynavax could achieve significant commercial success with this vaccine, which is late to the party?

Brian Orelli: We talked about this vaccine, I think, a few weeks ago when the UK government pulled out of a supply agreement with Valneva. The Phase III data that was just released looked pretty good.

The study was comparing VLA2001 which is an inactivated virus to AstraZeneca's (NASDAQ:AZN) vaccine. VLA2001 produced higher antibody levels than AstraZeneca's vaccine, and the tolerability was better, at least in patients that were 30 years and older. Cases of COVID were similar between the two vaccines.

There were no severe disease in either group. That basically says that it's non-inferior on the ability to prevent COVID. Non-inferiority to an already approved drug is pretty standard for infectious diseases. If you have a new antibiotic, you can't compare it to placebo because you can not give patients antibiotic to deal with their infection. You've got to give them control, so you give them the current standard of care, and then you compare your drug to the current standard of care. If it works better, then that's great, and if it works the same well, the FDA's OK with approving it.

Are we at the point during the pandemic where regulators are OK with non-inferiority to a current standard of care? Maybe it seems reasonable to me, but I'm obviously not a regulator. We'll have to wait and see what the regulators think, but I think AstraZeneca should produce solid data, and so I think that comparing it to AstraZeneca's data seems reasonable to me.

The fact that it's producing better antibodies or higher levels of antibodies seems like a good thing and the fact that it's just as good for COVID cases seems reasonable. I think there's definitely a market, especially in the developing world. But as we've talked about previously, that's going to come with lower margins.

We'll have to wait and see how much Valneva can make off of this vaccine. In terms of Dynavax, Dynavax actually just sells the adjuvant to Valneva, so I think it'll make money no matter what the margins are that Valneva is making, although maybe if Valneva is not making as much, they try to squeeze Dynavax a little bit to try to get a lower price on the adjuvants and maybe that hurts Dynavax slightly.

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