Wednesday, June 7, 2023
HomeBusinessNovovax's profit plunged but saw stock prices rise as it cut staff

Novovax’s profit plunged but saw stock prices rise as it cut staff

Novavax’s inventory surged 28 % Tuesday, its greatest one-day share acquire since December 2021 because the struggling vaccine maker pledged to slash prices and disclosed promising outcomes of vaccines in growth.

Traders appeared previous the Gaithersburg, Md., biotech’s downbeat monetary outcomes for the primary three months of 2023, because it misplaced almost $300 million and its income sunk to depths not seen in almost three years. Novavax disclosed in March that there was a threat it wouldn’t survive as a enterprise.

The fortunes of the as soon as highflying firm have been in decline since late 2021, because it turned clear that its coronavirus vaccine arrived too late for probably the most extreme part of the pandemic. The U.S. authorities staked Novavax $1.8 billion to develop its vaccine, and it gained regulatory approval in July 2022 — greater than a 12 months and a half after its main rivals.

Novavax was a covid vaccine underdog. Now it’s in monetary bother.

Novavax’s inventory has swooned to single digits from a peak of $290, and it has racked up $3.1 billion in losses since 2020, in accordance with knowledge compiled by S&P Capital IQ.

But traders discovered brighter prospects Tuesday as Novavax mentioned it might minimize prices for overhead and analysis and growth by a minimum of 40 % this 12 months, and it disclosed outcomes from a mid-stage trial of a flu vaccine, a high-dose coronavirus vaccine and a routine that mixes each photographs. Novavax shares at one level rose by greater than 50 % throughout buying and selling on Tuesday earlier than closing at $9.52.

Novavax mentioned it might trim 25 % of its international workforce this 12 months, which interprets to a lack of roughly 400 full-time jobs along with contractors.

“We will’t minimize our solution to success however we’ve got to stabilize ourselves financially,” John Jacobs, Novavax chief government, mentioned in an interview Tuesday. The examine outcomes, he added, validate the corporate’s expertise. “We’re sitting on one thing we consider may be very particular,” he mentioned.

How Novavax is totally different from different coronavirus vaccines

Novavax is targeted on readying its one accredited coronavirus vaccine for the autumn. Regardless of a hunch in demand for vaccinations and two established heavyweights — Moderna and Pfizer-BioNTech — Novavax is pitching its product as the one one within the U.S. that doesn’t depend on messenger RNA expertise to guard in opposition to the coronavirus. As an alternative, it deploys a protein to prime the physique’s immune system to focus on the virus.

That would enchantment to individuals who need to get vaccinated by don’t belief mRNA vaccines or have a medical cause to keep away from them, specialists within the discipline have mentioned. Novavax’s model additionally doesn’t require ultracold storage like mRNA vaccines, making it simpler to ship and retailer.

Clouding Novavax’s prospects is litigation over advance funds it obtained for vaccines with almost $700 million at stake, in addition to urge for food for its vaccine. Timing has tripped up Novavax earlier than and will once more, analysts say.

Novavax’s spending cuts are necessary steps, analysts at Cowen mentioned in a analysis word Tuesday, however that may solely make it tougher to compete in opposition to its main rivals.

“The corporate is within the place of scaling again at a document tempo proper when their aggressive edge requires the largest enhance,” the analysts wrote.




Please enter your comment!
Please enter your name here

Most Popular

Recent Comments