Shares of Novavax closed greater than 20% lower on Wednesday after the vaccine maker reported fourth-quarter revenue and earnings that missed Wall Street’s estimates and said it expects full-year 2024 sales to are available in flat or lower than last 12 months.
Still, Novavax narrowed its losses within the quarter from the identical period a 12 months ago, whilst demand for the biotech company’s Covid vaccine – its only marketable product – and other shots and coverings that combat the virus proceed to plummet worldwide.
Here’s what Novavax reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly often known as Refinitiv:
- Loss per share: $1.44 vs. a lack of 45 cents expected
- Revenue: $291.3 million vs. $322 million expected
The corporate posted a net lack of $178.4 million, or $1.44 per share, for the quarter. That compares with a net lack of $182.2 million, or $2.28 per share, within the year-earlier quarter.
Novavax generated fourth-quarter sales of $291.3 million, down from the $357.4 million within the year-earlier period.
Novavax CEO John Jacobs told CNBC that the corporate had some revenue move from 2023 into 2024 resulting from the timing of some advance purchase agreements for doses of its Covid shot. But Jacobs also said on an earnings call with investors Wednesday that Novavax is “upset” with its performance within the U.S. Covid vaccine market last season.
Several aspects, comparable to the later entry of Novavax’s updated Covid shot last fall, affected the corporate’s ability to realize Covid vaccine market share within the U.S., Novavax Chief Operating Officer John Trizzino said on the decision.
But he said aspects “outside of our control,” including a smaller-than-expected Covid market size and an amazing variety of vaccinations that took place in retail pharmacies, led Novavax to perform below expectations.
Trizzino said the corporate will work to extend its market share this 12 months through efforts comparable to rolling out its next Covid shot in early September and streamlining its customer engagement teams to concentrate on retail pharmacies, which accounted for greater than 95% of vaccinations this past season. Next season, Novavax also hopes to supply its vaccine in a pre-filled syringe, which can be more convenient than the shot’s current five-dose vial form.
Novavax expects full-year 2024 revenue to are available in between $800 million and $1 billion. That forecast reflects an expected $500 million to $600 million in revenue from advanced purchase agreements and $300 million to $400 million from industrial market product sales, royalties and other revenue from the corporate’s “partner-related activity.”
Analysts surveyed by LSEG expect 2024 revenue of $969.6 million.
Novavax anticipates first-quarter revenue to are available in at $100 million, which reflects the tail end of the present Covid vaccination season. The corporate previously expected $300 million in sales for the period.
Novavax reiterated its program to slash more expenses this 12 months as a part of the global cost-cutting plan it launched last 12 months.
The corporate plans to lower its combined research and development in addition to selling, general and administrative expenses to a spread of $700 million to $800 million in 2024.
Novavax already shaved down those combined expenses to $1.21 billion last 12 months. That is $150 million greater than the corporate’s initial goal for those expenses, Jacobs noted. Those combined expenses got here in at $1.69 billion in 2022.
The corporate also reduced its operating expenses in 2023 by $1.1 billion, or 41%, compared with 2022. It also cut its workforce by 30% compared with the primary quarter of 2023.
The cuts will help Novavax concentrate on further developing its combination vaccine targeting Covid and the flu, which it plans to launch in 2026. The corporate expects to begin a late-stage trial on that shot within the second half of the 12 months.
Jacobs said that combination jab will open up a market that ranges between 120 million and 140 million doses a 12 months. The corporate’s data suggests that a big portion of people that receive separate Covid and flu shots will convert to combination options, he added.
The outcomes come a 12 months after the biotech company first raised concerns about its ability to remain in business. Shares of Novavax fell greater than 50% last 12 months.
However the stock got an enormous boost last week after it eliminated what some analysts considered one in all the most important uncertainties around the corporate.
On Thursday, Novavax said it would settle a bitter arbitration dispute with Gavi, a nongovernmental global vaccine organization, over a canceled Covid vaccine purchase agreement. Novavax could pay around $300 million to $400 million to the organization, but the full amount could also be less if Gavi decides to order more shots from the corporate over the following five years.
If Novavax gets to settle a part of the arbitration through vaccine orders, the corporate will give you the chance to set a price for those doses, Jacobs said.
“We get to set that price and it allows us to manage the economics of that,” he said, adding that “it could be a quite favorable strategy to settle that agreement through doses and again, that helps fulfill the mission” of distributing shots more equitably in lower-income countries.
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