Novavax Prepares Further Cost Cuts To Better Align With Demand-Challenged COVID-19 Vaccine Market

Novavax Inc NVAX reported Q3 revenue of $187 million, compared to $735 million in the same period in 2022, beating the consensus of $158.54 million.

"We've really optimized that U.S. grant opportunity, which was something that was uncertain at the beginning of the year," Reuters noted, citing Novavax CEO John Jacobs in an interview, adding that the government had shortened the timeline for being able to tap into those funds.

"We and many others thought there would be 80 to 100 million doses in the U.S. market this year, and it turned out to be significantly smaller than that," said Jacobs.

Also Read: Timing Favors Novavax's Delayed Approval, Arrival Ahead of Peak COVID Vaccine Demand.

Cost Cutting: The company said it is on track to exceed the previously announced global restructuring and cost reduction plan for 2023 by over $100 million for combined R&D and SG&A expenses.

Novavax is prepared to initiate an additional cost reduction program to reduce 2024 expenses by over $300 million further to reshape the size and scope of global business operations beyond previously announced 2024 targets to align with the COVID-19 market opportunity.

The company reported a Q3 EPS loss of $(1.26), beating the consensus of $(1.83).

Novavax reduced current liabilities by $128 million during the third quarter of 2023 and by approximately $1 billion as of September 30, 2023.

Guidance: Novavax sees FY23 revenue of $900 million-$1.1 billion versus prior guidance of $1.3 billion-$1.5 billion versus consensus of $1.37 billion.

The company forecasts Q1 FY24 revenue of $300 million.

The company expects the 2023-2024 U.S. market for the updated COVID-19 shots to be between 30 million and 50 million doses.

Price Action: NVAX shares are up 0.29% at $6.82 during the premarket session on the last check Thursday.