Novavax stock falls 20% as vaccine maker misses quarterly estimates, sees sluggish 2024 sales

Shares of Novavax fell more than 20% 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 come in flat or lower than last year.

Still, Novavax narrowed its losses in the quarter from the same period a year ago, even as demand for the biotech company's Covid vaccine – its only marketable product – and other shots and treatments that combat the virus continue 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 known as Refinitiv:

The company posted a net loss of $178.4 million, or $1.44 per share, for the quarter. That compares with a net loss of $182.2 million, or $2.28 per share, in the year-earlier quarter. 

Novavax generated fourth-quarter sales of $291.3 million, down from the $357.4 million in the year-earlier period. 

Novavax CEO John Jacobs told CNBC that the company had some revenue move from 2023 into 2024 due to 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 "disappointed" with its performance in the U.S. Covid vaccine market last season.

Several factors, such as the later entry of Novavax's updated Covid shot last fall, affected the company's ability to gain Covid vaccine market share in the U.S., Novavax Chief Operating Officer John Trizzino said on the call. But he said factors "outside of our control," including a smaller-than-expected Covid market size and an overwhelming number of vaccinations that took place in retail pharmacies, led Novavax to perform below expectations.

Trizzino said the company will work to increase its market share this year through efforts such as rolling out its next Covid shot in early September and streamlining its customer engagement teams to focus on retail pharmacies, which accounted for more than 95% of vaccinations this past season. Next season, Novavax also hopes to offer its vaccine in a pre-filled syringe, which would be more convenient than the shot's current five-dose vial form.

Novavax expects full-year 2024 revenue to come 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 commercial market product sales, royalties and other revenue from the company's "partner-related activity." 

Analysts surveyed by LSEG expect 2024 revenue of $969.6 million. 

Novavax anticipates first-quarter revenue to come in at $100 million, which reflects the tail end of the current Covid vaccination season. The company previously expected $300 million in sales for the period.

Novavax reiterated its program to slash more expenses this year as part of the global cost-cutting plan it launched last year. 

The company plans to lower its combined research and development as well as selling, general and administrative expenses to a range of $700 million to $800 million in 2024. 

Novavax already shaved down those combined expenses to $1.21 billion last year. That's $150 million more than the company's initial target for those expenses, Jacobs noted. Those combined expenses came in at $1.69 billion in 2022. 

The company 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 first quarter of 2023. 

The cuts will help Novavax focus on further developing its combination vaccine targeting Covid and the flu, which it plans to launch in 2026. The company expects to start a late-stage trial on that shot in the second half of the year.

Jacobs said that combination jab will open up a market that ranges between 120 million and 140 million doses a year. The company's data suggests that a large portion of people who receive separate Covid and flu shots will convert to combination options, he added.

The results come a year after the biotech company first raised concerns about its ability to stay in business. Shares of Novavax fell more than 50% last year. 

But the stock got a huge boost last week after it eliminated what some analysts considered one of the biggest uncertainties around the company. 

On Thursday, Novavax said it will 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 total amount may be less if Gavi decides to order more shots from the company over the next five years.

If Novavax gets to settle part of the arbitration through vaccine orders, the company will be able to set a price for those doses, Jacobs said.

"We get to set that price and it allows us to control the economics of that," he said, adding that "it would be a quite favorable way 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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