NEW YORK (Reuters) – Covid-19 vaccine maker Novavax (NVAX.O) on Monday questioned whether it could continue to operate and announced plans to cut spending for a fall vaccination campaign.
The company said there is significant uncertainty about its 2023 earnings, funding from the U.S. government, and its pending arbitration with GAVI, the global vaccine alliance. indicates that we have sufficient capital to fund our operations in the coming year.
In the fourth quarter, the company posted a loss of $182 million, or $2.28 per share, on revenue of $357 million, lower than expected. Analysts had expected sales of $383 million, according to Refinitiv data.
Novavax Chief Executive John Jacobs, who joined the company in late January, said, “If we execute on our business plan, we will be in a very strong position not only at the end of this year but also next year.” in an interview. Novavax said he had $1.33 billion in cash on hand as of the end of 2022.
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However, Jacobs warns that there are short-term risks to its operational plans, including the fact that protein-based vaccines like Novavax take longer to manufacture than messenger RNA-based competitors. .
Companies must change their vaccines annually to match prevalent strains as required by regulatory bodies, including the U.S. Food and Drug Administration.
“We don’t yet know the strain selection by the FDA. We don’t know what the global health authorities want from a regulatory perspective about what the new vaccine should look like,” Jacobs said. “The sooner it’s done, the clearer the path to go.”
The CEO said the company’s spending was “overheating” and plans to cut back, possibly including job cuts.
“We are in the process of evaluating Novavax’s global footprint, streamlining our supply chain, streamlining our portfolio, and streamlining our company structure and infrastructure,” he said.
Jacobs didn’t set a target for how severe the spending or job cuts would be. According to his website, Novavax has more than 1,500 employees of his.
Novavax is considering all options, from partnerships to licensing agreements to “much more significant different types of agreements” to properly assess its technology, pipeline and manufacturing capacity on three continents, he said. the CEO said.
Novavax was founded in 1986, but the COVID-19 vaccine was the company’s first commercial product. Novavax’s shot deployment was plagued by manufacturing problems, regulatory delays, and slow adoption.
When the company was working on Shot, the company’s stock traded up to $330, giving it a market capitalization of over $20 billion. Since then, they have lost more than 97% of their value to him, trading at around $9.30 per share.
Outside the U.S., Novavax has signed contracts worth $2 billion with governments, which it plans to collect, Jacobs said. The company is in ongoing talks with these governments to recover these deals by 2024.
Only about 80,000 doses have been administered in the United States, where the Novavax vaccine was approved in July 2022. The company hopes to take advantage of the planned transition from government contracts to the commercial market this fall.
Jacobs said Novavax’s vaccine may take longer to produce than rivals Pfizer (PFE.N)/Biontech (22UAy.DE) and Moderna (MRNA.O), but FDA regulators are slated to release the U.S. vaccine this fall. He said he believes consumers want protein-based options. citizen.
“They made it very clear that they think it’s important to have different types of vaccine options in the United States,” he said.
Reporting by Michael Erman Editing by Caroline Humer and Bill Barclot
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