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Executives at Novavax expected to get big payouts, even if their vaccine fails clinical trials

Published on 23/07/20 at 11:11am
U.S. Air Force photo/Airman 1st Class Deana Heitzman

Novavax, one of the leading US firms which is developing a coronavirus vaccine, is set to award executives stock options that could yield pay outs of tens of millions of dollars, even if their vaccine fails.

Stanley Erck, the CEO, and three other executives would earn stock worth $101 million if the company’s vaccine enters a mid-stage clinical trial, regardless if it goes on to be an eventual success. This means they can start exercising stock options after the Phase 2 trial’s completion.

While the company has never brought a vaccine to market, its development of a coronavirus vaccine has seen their market value surge from $250 million to $8 billion over the last five months. The Trump administration’s Operation Warp Speed has also gave the company $1.6 billion for vaccine development.

The company said it was giving its executives these stock options as “launching a Phase 2 trial quickly and under these circumstances is a significant achievement.” The company did not address why they were being rewarded for mid-stage trials rather than the vaccines completion.

Due to the government involvement in developing the vaccine, many are concerned that executives are getting such a large payday. Eli Zupnick, a spokesman for consumer watchdog Patients over Pharma, said: “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.”

Novavax have said it expects to launch Phase 2 trials soon with Phase 3 to be conducted by the end of the year.

Conor Kavanagh

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