A healthcare worker prepares a dose of the Novavax vaccine as the Dutch healthcare organization begins the Novavax vaccination program on March 21, 2022 in The Hague, Netherlands.
Patrick van Katwijk | Getty Images
shares of Novavax up 5% in premarket trading Tuesday after the company promisingly revealed new vaccination dates and a broader cost-cutting drive that includes major layoffs.
The announcements are a sign of hope for investors after the most recent quarter, when the biotech expressed doubts about its ability to stay in business and decided not to provide full-year guidance.
Novavax is now relying on its cost controls and new vaccines to stay afloat, and says it forecasts sales of $1.4 billion to $1.6 billion in 2023 First Quarter Earnings Report.
The Gaithersburg, Maryland-based company said its combination vaccine, which targets both Covid and the flu, elicited a strong immune response against the viruses and was well-tolerated in a Phase 2 study. Novavax shared similar study results for its standalone flu vaccine and the new high-dose Covid vaccine.
The company’s Covid vaccine is its only marketed product after 35 years in business.
Novavax also announced a global cost-cutting plan that includes cutting 25% of the company’s workforce. About 20% of the company’s 2,000 full-time employees will be affected, a Novavax spokesman told CNBC.
The plan also includes the consolidation of the company’s facilities and infrastructure.
Novavax expects the plan to reduce R&D and SG&A spending by about 20% to 25% in 2023 compared to those costs in 2022. The company reported R&D spend of $258 million and SG&A costs of $162 million last year.
The plan also calls for reducing R&D and SG&A costs by about 40% to 50% by 2024 compared to 2022.
“Novavax is focused on significantly reducing our expenses while maintaining the key competencies required to execute our operational plans,” the company said in the press release.
Novavax nonetheless reported a dismal first quarter that missed Wall Street estimates.
The biotech posted first-quarter revenue of $81 million, down from the $704 million it reported for the same period a year ago. Novavax said the steep drop was due to “an emerging seasonal pattern” for Covid vaccines.
According to a survey by Refinitiv, analysts expected the company to post $87.6 million in revenue for the quarter.
Novavax reported a net loss of $294 million, or $3.41 per share, compared to net income of $203 million, or $2.56 per share, in the first quarter of 2022. Analysts estimated that the company would post a loss of $3.46 per share, according to the Refinitv survey.
Novavax shares are down 27% through Monday’s close, putting the company’s market value at about $643 million.
Novavax’s road to launching its Covid vaccine in the US has been a rocky one.
The company competed against Pfizer and Moderna to develop the first Covid vaccine early in the pandemic. But Novavax’s efforts were hampered by manufacturing defect and regulatory disruptions, leaving the company far behind its peers.
Novavax’s shot finally got Food and Drug Administration approval last year, but uptake has been sluggish.
So did the FDA in October logged off on the Novavax Covid booster. But most Americans had already settled on Pfizer and Moderna’s updated Omicron boosters by this point.
Novavax’s shot is the first Covid vaccine to use protein technology, a decades-old method of fighting viruses used in routine vaccinations for hepatitis B and shingles.
The syringe works differently than its mRNA-based counterparts from Pfizer and Moderna, but achieves the same result: teaching your body how to fight Covid.