Reports said the stock is also benefiting from the new CEO’s wide-sweeping drive to cut the company’s workforce by about 25%.  

After a steep fall in the final quarter of 2022, the Maryland-headquartered company’s sales plunged again in the 2023 first quarter to $81milion, from $70 million a year earlier, due to falling demand for Covid-19 vaccines.

Simultaneously, Novavax reported a Q1 net loss of $294 million for the first quarter, compared with a profit of $203 million in the same period of 2022.

In late February, new CEO John Jacobs – who succeeded Stanley Erck in January — had raised red flags about the company’s continued viability while announcing plans to slash 2024 costs by 40-50% and the 2,000-strong global workforce by 25%.

All Covid vaccine manufacturers hit by soft demand

All Covid vaccine manufacturers are seeing sales shrink, due to the supply overhang, with national governments moving to renegotiate contracts, and Jacobs said there is no guarantee that all commitments will be upheld.

A latecomer to the market, due to production problems, the biotech’s first-generation Covid vaccine failed to profit from last year’s widespread vaccination drives but it is hoping for stronger momentum if campaigns are revived this autumn.

Speaking to UK newspaper Financial Times, the new CEO called on national governments to honor their Covid vaccine purchase commitments such as Novavax’s $2.1 billion in advanced purchase agreements stretching into 2025.

Horizon may be brightening

In a sign that the horizon may be brightening, the biotech reported last week that the performance of all three vaccine candidates in its pipeline, including a combined Covid-flu shot, a standalone flu shot and a high-dose Covid shot, have shown robust preliminary topline immune responses versus authorized comparators.

In Phase 2 trials, all three vaccines were well-tolerated and demonstrated a reassuring preliminary safety profile, with reactogenicity comparable to authorized comparators, the company said.

But even with a positive vaccine profile, the risks are high, Jacobs noted, especially as the Novavax protein-based shot takes longer to manufacture than mRNA-based vaccines. Also, like flu vaccines, future Covid vaccines will have to be modified to match seasonal strains and conform to parameters set by the US Food and Drug Administration (FDA).

While in waiting mode, the CEO said Novavax is assessing its global footprint, rationalizing its supply chain and its portfolio, as well as overhauling its corporate structure and infrastructure.

For the future, Jacobs said the vaccine maker is also weighing all options that properly value its technology, pipeline and manufacturing capabilities on three continents, from partnerships to licensing deals as well as – more cryptically – “different types of deals that could be much more significant.”

Author: Dede Williams, Freelance Journalist