Novavax Plummets On ‘Substantial Uncertainty’ For Its Future

Novavax (NVAX) reported lighter-than-expected fourth-quarter sales of its Covid vaccine late Tuesday and NVAX stock crashed.

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During the December quarter, Novavax sales grew 61% to $357 million. But that lagged expectations for $383 million, according to FactSet. The company cited growth in sales of its Covid vaccine, Nuvaxovid, offset by declining revenue from grants, royalties and other sources. Nuvaxovid is authorized in the U.S. for people age 12 and older as a primary series. It’s also used as a booster in adults.

The company also reported a wider-than-projected loss of $2.28 a share. That narrowed from a loss of $11.18 a share in the year-earlier period, but missed estimates for a loss of $1.10 a share.

The results come as U.S. Covid vaccinations slow. Pfizer‘s (PFE) and Moderna‘s (MRNA) Covid shots eked out small sales gains in 2022, though sales are expected to drop off this year. But it’s important to note Novavax uses a different means of vaccinating patients. While the Pfizer and Moderna shots rely on messenger RNA platforms, Novavax’s shot is protein-based.

On the stock market today, NVAX stock jumped 6.8% to end the regular session at 9.26. In after-hours trading, shares tumbled 19.9% near 7.40.

NVAX Stock: Lookahead Is Murky

Novavax cautioned that while it plans to fund development of an updated Covid shot, there is “substantial uncertainty” related to its 2023 revenue, funding from the U.S. government and pending arbitration.

“To maximize our opportunities and mitigate the significant risks and uncertainties of the COVID-19 market, our goal is to reduce spend, extend our cash runway and operate efficiently to best position the company to deliver long-term growth,” the company said in its news release.

Novavax believes it has sufficient capital to fund operations for at least a year but cautioned “substantial doubt exists regarding our ability to continue as a going concern through one year.”

Analysts Expect Declining Sales

NVAX stock analysts project losses of $4.99 per share and for sales to hit $1.26 billion.

That would be in line with Pfizer’s and Moderna’s expectations. Both companies predict sales of their Covid shots will decline in 2023. Vaccinations are slowing and the public health emergency in the U.S. is now slated to end in May.

Meanwhile, NVAX stock has a worst-possible Relative Strength Rating of 1. This puts shares in the lowest 1% of all stocks when it comes to 12-month performance, according to IBD Digital.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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