Novavax Tumbles on Cut to UK Covid Vaccine-Supply Deal, Capital Raising

(Bloomberg) — Novavax Inc. shares tumbled Thursday after the company announced it had cut its vaccine supply to the UK and was seeking additional equity and debt.

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The company said it was offering $125 million in shares and $125 million in convertible bonds via JPMorgan Chase & Co., Jefferies Financial Group Inc. and Cowen Inc. It also said in company filings that it was obliged to repay the UK government after its agreement to supply Covid-19 vaccines was halved.

The share price fell as much as 22% after the announcements, opening at $14.16, and trading at its lowest since April 2020. If that drop holds until the end of the trading day, it would be the largest single-day loss since August 9, when it lost 30% after cutting its revenue forecast. Shares of Novavax have fallen more than 90% since the start of this year.

The capital raise and supply agreement changes are the latest in a long line of obstacles the company has faced. Its trademark Covid-19 vaccine saw continued delays and was first approved for emergency use in the US in July of this year. In total, Novavax has delivered 984,600 doses of its Covid vaccine in the US, a small fraction of the hundreds of millions by Pfizer Inc. and Moderna Inc., according to data from the Centers for Disease Control and Prevention.

Novavax’s vaccine differs from Pfizer and Moderna’s vaccines by mimicking the protein the coronavirus uses to enter cells, instead of using mRNA technology.

Its agreement with the UK initially called for 1 million doses and the possibility of an additional 15 million contingent on government approval, according to the filing. Novavax said it didn’t receive approval by its Nov. 30 deadline, and so would be obligated to repay $112.5 million and supply only 7.5 million doses. The company has until Nov. 30 of next year to gain approval from the UK’s vaccine committee for the rest of its supply.

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Novavax shares fell 21%, to $13.65, at 10:55 a.m. in New York.

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