Novavax Ushers New CEO On Uncertainty Concerns, Says It Needs To Work On Competitive COVID-19 Product

COVID-19 vaccine maker Novavax Inc NVAX shares plunged after it raised doubts about its ability to remain in business and announced plans to cut spending.

The company said significant uncertainty exists around its 2023 revenue, funding from the U.S. government, and pending arbitration with the global vaccine alliance. 

It said its cash flow forecast indicates sufficient capital to fund operations over the next year.

The company reported a Q4 loss of $(182) million, or $(2.28) per share, below the consensus of $(0.92) but better than the $(11.18) per share reported a year ago.

Q4 sales of $357 million grew 61% Y/Y. Analysts had expected sales of $383.14 million.

The company appointed John Jacobs, President & CEO following the retirement of Stanley Erck, who served as President & CEO for 12 years.

In its 10K filing, the company said the U.S. government did not extend its agreement with Novavax beyond December 2023, putting some of the remaining $416 million in that deal at risk.

Novavax also said that depending on the outcome of its arbitration with Gavi, it could be required to refund all or a portion of the $697.4 million it received from the group.

Novavax had $1.33 billion of cash on hand at the end of 2022.

The company said its 2023 revenue depends on its ability to successfully develop, manufacture, distribute, or market an updated monovalent or bivalent formulation of a vaccine candidate for COVID-19 for the fall 2023 COVID vaccine season, which is inherently uncertain.

Novavax experienced delays in early 2023 in manufacturing BA.5 clinical trial materials, which could potentially delay regulatory approval from the FDA for our vaccine candidate for the fall 2023 COVID vaccine season. 

In addition, in January 2023, the U.S. Vaccines and Related Biologics Products Advisory Committee announced its intent to provide the industry with strain protocol guidance in Q2 of 2023 for the fall 2023 COVID vaccine season. 

Novavax does not know what the strain selection is yet from FDA. The sooner it happens more clarity there will be on the path forward.

Price Action: NVAX shares are down 26.40% at $6.82 during the premarket session on the last check Wednesday.

Photo by Jernej Furman via Flickr