A healthcare worker prepares a dose of Novavax vaccine at the launch of the Novavax vaccination program by the Dutch Health Service on March 21, 2022 in The Hague, Netherlands.
Patrick Van Katwijk | Getty Images
stock price of Novavax Soared over 50% on Tuesday biotechnology companies Promising announcement new vaccine data and the promotion of extensive cost reductions, including large-scale layoffs.
The announcement is a silver lining for investors after last quarter when they questioned the company’s ability to continue operations and decided not to provide full-year guidance. Novavax’s stock is up about 6% so far this year, taking his market value to nearly $950 million.
Novavax now projects $1.4 billion to $1.6 billion in revenue in 2023, betting on cost control and new vaccines to keep the business alive. First quarter earnings report.
The Gaithersburg, Maryland-based company said its combination vaccine targeting Covid and influenza produced strong immune responses to the virus and was well tolerated in a Phase 2 trial. Novavax shared similar trial results for a standalone flu vaccine and a new high-dose Covid shot.
The company’s Covid vaccine is the only product on the market after 35 years in business.
Novavax also announced a global cost-cutting plan that includes cutting 25% of the company’s workforce. A Novavax spokesperson told CNBC that about 400 full-time equivalent workers will be affected.
The plan also includes consolidation of company facilities and infrastructure.
Novavax expects the plan to reduce 2023 R&D and selling, general and administrative expenses by approximately 20% to 25% compared to 2022 costs.
SG&A expenses typically include the costs of advertising, selling and delivering a company’s products and services.
Novavax said the plan is also expected to reduce R&D and SG&A costs in 2024 by about 40% to 50% compared to 2022.
company report Last year, R&D expenses were $258 million and SG&A expenses were $162 million.
Novavax CEO John Jacobs said layoffs were a “difficult decision” but “necessary to put the company on a better path towards financial strength and sustainability.” Stated.
“We are deeply grateful for the contributions made by our negatively impacted employees today,” he said.
Novavax still reports a tough first quarter, falling short of Wall Street earnings estimates.
The company’s first-quarter sales were $81 million, down from $704 million in the year-ago quarter. Novavax said the plunge was due to “new seasonal patterns” for the coronavirus vaccine.
Analysts expected the company to post $87.6 million in revenue in the fourth quarter, according to Refinitiv research.
Novavax reports a net loss of $294 million ($3.41 per share) compared to a net loss of $203 million ($2.56 per share) in the first quarter of 2022 . the survey said.
Novavax has had a bumpy road to launch a Covid vaccine in the US.
the company fought Pfizer and Moderna Developing the first Covid vaccine early in the pandemic. But Novavax’s efforts manufacturing problem And regulatory issues have put the company far behind its rivals.
Novavax injectable finally gained Emergency Use Authorization from the Food and Drug Administration last year, but adoption has been slow.
FDA also in October signed At Novavax’s Covid booster. But most Americans had by then opted for the latest Omicron boosters from Pfizer and Moderna.
The Novavax shot is the first Covid vaccine to use protein technology, a decades-old method to fight the virus used in routine vaccinations against hepatitis B and shingles.
This injection works differently than its mRNA-based counterparts from Pfizer and Moderna, but achieves the same results. In short, it teaches your body how to fight Covid.
