Novavax (NVAX) Q1 earnings report 2023

A medical examiner prepares a dose of the Novavax vaccine because the Dutch Health Service Organization starts with the Novavax vaccination program on March 21, 2022 in The Hague, Netherlands.

Patrick Van Katwijk | Getty Images

Shares of Novavax rose 5% in premarket trading Tuesday after the corporate unveiled promising recent vaccine data and a broad cost-cutting push that features major layoffs. 

The announcements are an indication of hope for investors after last quarter, when the biotech company raised doubts about its ability to remain in business and decided not to supply full-year guidance.

Novavax is now betting on its cost controls and recent vaccines to assist it stay afloat, forecasting 2023 sales of $1.4 billion to $1.6 billion, in keeping with its first-quarter earnings report.

The Gaithersburg, Maryland-based company said its combination vaccine that targets each Covid and the flu produced a robust immune response against the viruses and was well-tolerated in a phase two trial. Novavax shared similar trial results on its stand-alone flu vaccine and recent high-dose Covid shot. 

The corporate’s Covid vaccine is its lone marketed product after 35 years in business.

Novavax also announced a world cost-cutting plan, which can involve slashing 25% of the corporate’s workforce. Roughly 20% of the corporate’s 2,000 full-time equivalent employees can be impacted, a Novavax spokesperson told CNBC. 

The plan also involves consolidating the corporate’s facilities and infrastructure. 

Novavax expects the plan to scale back 2023 R&D and SG&A expenses by around 20% to 25% compared with those costs in 2022. The corporate reported R&D expenses of $258 million and SG&A expenses of $162 million last yr.

The plan can be projected to scale back 2024 R&D and SG&A costs by roughly 40% to 50% compared with 2022. 

“Novavax is concentrated on significantly reducing our expenses while retaining the important thing capabilities needed to execute our operating plans,” the corporate said in the discharge.

Novavax still reported a bleak first quarter that missed Wall Street’s estimates.

The biotech company posted first-quarter sales of $81 million, down from the $704 million it reported throughout the same period a yr ago. Novavax said the steep drop was attributable to “an emerging seasonal pattern” for Covid vaccines.

Analysts expected the corporate to rake in $87.6 million in revenue for the quarter, in keeping with Refinitiv survey.

Novavax reported a net lack of $294 million, or $3.41 per share, in comparison with a net income of $203 million, or $2.56 per share, throughout the first quarter of 2022. Analysts estimated the corporate would post a lack of $3.46 per share, the Refinitv survey said.

Novavax shares are down 27% for the yr through Monday’s close, putting the corporate’s market value at roughly $643 million.  

Novavax’s road to launching its Covid vaccine within the U.S. was rocky.

The corporate raced against Pfizer and Moderna to develop the primary Covid vaccine early within the pandemic. But Novavax’s efforts were hindered by manufacturing snags and regulatory glitches, placing the corporate far behind its rivals. 

Novavax’s shot finally won Food and Drug Administration approval last yr, but uptake has been sluggish. 

The FDA in October also signed off on Novavax’s Covid booster. But most Americans had already opted for Pfizer and Moderna’s updated omicron boosters by then. 

Novavax’s shot is the primary Covid vaccine to make use of protein technology, a decades-old method for fighting viruses utilized in routine vaccinations against hepatitis B and shingles. 

The shot works in another way than its mRNA-based counterparts from Pfizer and Moderna but achieves the identical final result: teaching your body fight Covid.