Novavax Shares Plunge Over 20% as Fourth-Quarter Results Miss Estimates

Novavax shares experienced a significant drop of over 20% on Wednesday following the company’s release of fourth-quarter financial results, which fell short of Wall Street’s expectations. The vaccine manufacturer also projected that its full-year 2024 sales would either remain flat or decrease compared to the previous year.

Despite narrowing its losses compared to the same quarter last year, Novavax faced challenges amidst declining demand for its COVID vaccine, its sole product in the market, as well as other treatments combating the virus globally.

Here are the key figures reported by Novavax for the fourth quarter, juxtaposed with analysts’ expectations:

– Loss per share: $1.44 versus an expected loss of 45 cents.
– Revenue: $291.3 million compared to an anticipated $322 million.

Loss per share $1.44, revenue $291.3M
Loss per share $1.44, revenue $291.3M; Q4 revenue down from year-ago period.

The company recorded a net loss of $178.4 million, or $1.44 per share, for the quarter, an improvement from the net loss of $182.2 million, or $2.28 per share, in the same quarter of the previous year. Fourth-quarter sales amounted to $291.3 million, down from $357.4 million in the corresponding period last year. Novavax CEO John Jacobs explained that revenue had shifted from 2023 to 2024 due to the timing of certain advance purchase agreements for COVID-19 vaccine doses.

However, he expressed disappointment with the company’s performance in the U.S. Covid vaccine market during the previous season. Several factors, including the delayed introduction of Novavax’s updated Covid shot last fall, hindered the company’s ability to capture market share in the U.S.

According to Novavax Chief Operating Officer John Trizzino, factors beyond the company’s control, such as a smaller-than-expected Covid market and a high number of vaccinations at retail pharmacies, contributed to underperformance. To enhance market share this year, Novavax plans to launch its next Covid shot in early September and focus on engaging with retail pharmacies.

Additionally, the company aims to introduce its vaccine in a pre-filled syringe for added convenience. Novavax forecasts full-year 2024 revenue between $800 million and $1 billion, with analysts predicting revenue of $969.6 million. First-quarter revenue is expected to reach $100 million, reflecting the end of the current Covid vaccination season, a reduction from the previously anticipated $300 million.

Novavax Covid-19 Vaccine
The company plans cost cuts and focuses on a combination Covid and flu vaccine development.

The company reiterated its commitment to reducing expenses as part of its cost-cutting strategy initiated last year. Novavax aims to lower combined research and development, as well as selling, general, and administrative expenses to a range of $700 million to $800 million in 2024.

The company’s focus remains on developing a combination vaccine targeting COVID-19 and the flu, slated for launch in 2026. Novavax anticipates initiating a late-stage trial for the combination vaccine in the latter half of this year.

The financial results come after Novavax faced uncertainties about its viability last year, leading to a more than 50% decline in its shares. However, the stock received a significant boost last week following the resolution of a contentious arbitration dispute with Gavi, a global vaccine organization. Novavax may pay around $300 million to $400 million to settle the dispute, with the potential for a lower amount if Gavi orders more shots from the company in the next five years.

Jacobs emphasized that settling the arbitration through vaccine orders would enable Novavax to set prices for the doses, thereby controlling the economics of the agreement and advancing the equitable distribution of shots in lower-income countries.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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