Actions of Novavax fell more than 20% on Wednesday after the vaccine maker reported fourth-quarter revenue and earnings that missed Wall Street estimates and said it expects full-year 2024 sales to be flat or lower than the previous year. last year.
Still, Novavax narrowed its losses in the quarter from the same period a year earlier, even as demand for the biotech company's Covid vaccine – its only marketable product – and other shots and treatments that fight the virus continues to plummet in everyone.
Here's what Novavax reported for the fourth quarter compared to what Wall Street expected, according to a survey of analysts by LSEG, formerly known as Refinitiv:
- Loss per share: $1.44 vs. an expected loss of 45 cents
- Revenue: $291.3 million vs. $322 million expected
The company posted a net loss of $178.4 million, or $1.44 per share, during the quarter. That compares with a net loss of $182.2 million, or $2.28 per share, in the year-ago quarter.
Novavax generated fourth-quarter sales of $291.3 million, up from $357.4 million in the same period a year earlier.
Novavax CEO John Jacobs told CNBC that the company had some revenue movements from 2023 to 2024 due to the timing of some advance purchase agreements for doses of its Covid vaccine. But Jacobs also said in an earnings call with investors on Wednesday that Novavax is “disappointed” with its performance in the US Covid vaccine market last season.
Several factors, such as the subsequent entry of Novavax's updated Covid vaccine last fall, affected the company's ability to gain share of the Covid vaccine market in the US, Novavax's chief operating officer said on the call. , John Trizzino. But he said factors “outside our control,” including a smaller-than-expected Covid market size and an overwhelming number of vaccinations taking place in retail pharmacies, led Novavax to underperform expectations.
Trizzino said the company will work to increase its market share this year through efforts such as rolling out its next Covid vaccine in early September and optimizing its customer service teams to focus on retail pharmacies, which accounted for more than 95% of vaccines last season. Next season, Novavax also hopes to offer its vaccine in a prefilled syringe, which would be more convenient than the shot's current five-dose vial form.
Novavax expects full-year 2024 revenue to range between $800 million and $1 billion. That forecast reflects expected revenue of $500 million to $600 million from advance purchase agreements and $300 million to $400 million from commercial product sales, royalties and other revenue from the company's “partner-related activity.” company.
Analysts surveyed by LSEG expect revenues of $969.6 million in 2024.
Novavax anticipates first-quarter revenue to reach $100 million, reflecting the end of the current Covid vaccination season. The company previously expected $300 million in sales for the period.
Novavax reiterated its program to cut further expenses this year as part of the global cost-cutting plan it launched last year.
The company plans to reduce its combined research and development, as well as sales, general and administrative expenses to a range of $700 million to $800 million in 2024.
Novavax already reduced those combined expenses to $1.21 billion last year. That's $150 million more than the company's initial goal for those expenses, Jacobs said. Those combined expenses amounted to $1.69 billion in 2022.
The company also reduced its operating expenses in 2023 by $1.1 billion, or 41%, compared to 2022. It also reduced its workforce by 30% compared to the first quarter of 2023.
The cuts will help Novavax focus on further developing its combination vaccine targeting Covid and flu, which it plans to launch in 2026. The company hopes to begin a late-stage trial with that vaccine in the second half of the year.
Jacobs said the combination vaccine will open a market ranging from 120 million to 140 million doses a year. The company's data suggests that a large portion of people who receive separate Covid and flu vaccines will transition to combined options, he added.
The results come a year after the biotech company first expressed concerns about its ability to stay in business. Novavax shares fell more than 50% last year.
But the stock received a big boost last week after it eliminated what some analysts considered one of the biggest uncertainties around the company.
On Thursday, Novavax said it will resolve a bitter arbitration dispute with Gavi, a global vaccine non-governmental organization, over a canceled Covid vaccine purchase deal. Novavax could pay between $300 million and $400 million to the organization, but the total amount may be less if Gavi decides to order more injections from the company over the next five years.
If Novavax can resolve part of the arbitrage through vaccine orders, the company will be able to set a price for those doses, Jacobs said.
“We can set that price and that allows us to control the economy,” he said, adding that “it would be a pretty favorable way to close that deal through doses and, again, that helps accomplish the mission” of distributing shots. more equitably in low-income countries.
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