Published - May 9th, 2023 @ 04:45 PM (CET)
Novavax's workforce drops by 25%
Novavax (NASDAQ:NVAX) a leading biotechnology company, has announced a significant restructuring process aimed at cutting costs and extending its cash runway. The company plans to reduce annual R&D and SG&A expenses by 40% to 50% relative to the previous year, consolidate its facilities and infrastructure, and cut 25% of its global workforce. As part of the restructuring process, Novavax expects to incur a restructuring charge of $10 million to $15 million related to employee severance and benefit costs in the second quarter of this year.
Despite a lag in first-quarter sales, Novavax expects to generate full-year revenue of $1.5 billion (up or down $100 million), crushing the $831 million estimate. This is largely due to the success of its Covid vaccine, Nuvaxovid. Novavax is on track to deliver an updated version of the vaccine this fall, using a protein-based technology that appeals to people uncomfortable with the newer messenger RNA vaccines sold by rivals Pfizer and Moderna.
Novavax's first-quarter report came in mixed. The company reported a loss per share of $3.41 on revenue of $81 million, missing analysts' expectations. However, the company's full-year revenue outlook exceeded expectations, with Novavax expecting to bring in $1.4 billion to $1.6 billion in sales this year. The remainder of the revenue will come from grant revenue.
Novavax's restructuring process is aimed at cutting costs, extending the company's cash runway, and operating more efficiently. "Combined with our focus on revenue generation from Nuvaxovid and management of our current liabilities, these measures should strengthen our cash position and our potential for the long-term growth and stability of Novavax," said John C. Jacobs, President and Chief Executive Officer, Novavax.
The announcement of positive Phase 2 topline results for COVID-Influenza Combination, standalone influenza, and high-dose COVID vaccine candidates is also expected to contribute to Novavax's revenue growth.
In morning trading, NVAX stock catapulted 35.2% higher near 10.10, well above its 50-day moving average. With Novavax's positive outlook and restructuring process, the company is poised for long-term growth and stability in the biotechnology industry.
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