Novavax (NVAX) is facing serious headwinds in 2023, with pandemic demand waning and new leadership changes, even as it celebrates a historic milestone of $2 billion in revenue for 2022 with $1.3 billion cash on hand.
In a statement Tuesday, the company warned of the impact of the uncertainty on its ability to operate.
“While our current cash flow projection for the one-year current period estimates that we have sufficient capital available to fund operations, this projection is subject to significant uncertainty, including with respect to 2023 revenues, funding from the U.S. government, and pending arbitration,” the company said.
The arbitration is an ongoing issue with Gavi, the global vaccine alliance that has been in charge of purchasing and distributing vaccines to lower-income countries during the pandemic. The company terminated a prepayment agreement that was not honored, but kept the prepayment as per the agreement.
Chief Financial Officer Jim Kelly said the shift to a commercial market and the end of the US public health emergency — and the shift to an endemic phase of the COVID outbreak worldwide — were the reason for the uncertainty clause in the profit statement and a lack of a 2023 outlook.
“Given these uncertainties, there is substantial doubt about our ability to continue as a business for one year from the date these financial statements are issued,” Novavax said in the statement.
Novavax’s only authorized product, the COVID-19 vaccine, missed the pandemic boom and faces market challenges in 2023 as a new CEO, John Jacobs, takes over.
Taking a hands-on approach to his transition, Jacobs is calling for a full review and assessment of the company’s pipeline and workflow, as well as promising transparency going forward.
That includes pausing development of an RSV vaccine — which has been a new competitive space for larger pharmaceutical companies, as well as other COVID-19 vaccine makers Moderna (MRNA) and Pfizer (PFE). Pfizer on Tuesday received a recommendation from a panel of outside FDA advisors for its RSV vaccine for those ages 60 and older.
“I’m aware that we’ve had both highs and lows in recent years,” Jacobs said on an earnings call late Tuesday, adding that he vows to be humble and transparent “about our opportunities and our challenges.”
Covid-19 vaccine
Novavax expects vaccine sales to pick up in the second half of 2023, as vaccines become more seasonal.
Executive vice president and chief commercial officer John Trizzino said the COVID vaccine remains an annual global market of more than $15 billion, with continued government interest, even with a growing commercial market in the US, European Union and Asia.
The company plans to produce variant-specific doses this fall and — similar to other manufacturers — reduce the size of vials to include fewer doses per vial.
To date, the company’s strength has been its ex-US operations. The ongoing clinical trials reflect this, with a study of recipients who have HIV, as well as the benefit of a second boost in those who previously received mRNA vaccines.
In addition, the company still has $2 billion in preorders to fulfill this year and next.
Meanwhile, Novavax is also still working on its trials for adolescents and younger age groups.
Evaluation of pipelines
The company will continue to look at a combination flu-COVID vaccine.
Meanwhile, the company is waiting for the review of one of its flu vaccines to decide whether or not to restart the program. The results would determine whether the company chooses “dilutive or non-dilutive” financing options, CFO Kelly said.
The company also announced that it will focus on partnerships and other relationships.
To that end, the manufacturing facility in the Czech Republic has just received approval from the European Medicines Agency to supply an antigen drug to the European Union. Novavax has similarly applied for approval from the FDA.
This could help create more partnerships and strengthen the company’s internal infrastructure, Trizzino said during the call Tuesday.
Continue to follow Anjalee Twitter @AnjKhem
Click here for the latest trending stock tickers from the Yahoo Finance platform
Click here for the latest stock market news and in-depth analysis, including stock-moving events
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow up Yahoo Finance Twitter, Facebook, Instagram, Flip board, LinkedInAnd YouTube
Leave a Reply