Vaccine maker Novavax tops revenue estimates, eyes more cost cuts
By Patrick Wingrove and Bhanvi Satija
(Reuters) -COVID-19 vaccine maker Novavax on Thursday beat market estimates for quarterly revenue, boosted by U.S. government grants to help cover the expense of clinical trials, and said it was prepared to further cut costs next year.
Shares rose nearly 4% in early trading as the company projected more than $2 billion in cash through end of 2025 from already secured revenues.
Still, the Maryland-based biotech, which has been banking on cost cuts and commercial sales of its retooled COVID shot to help it stay afloat, reiterated its "going concern warning".
Novavax said it had reduced liabilities by $128 million in the third quarter and was prepared to cut costs by an additional $300 million in 2024 to better align itself with the smaller-than-expected COVID-19 vaccine market.
"We are going to drive for higher efficiencies to support this leaner, focused company," finance chief Jim Kelly said on a call, adding that the 2024 savings efforts would include reduction of idle capacity and overhead support at facilities.
Third-quarter revenue of $187 million was down from $734.58 million a year earlier, but above expectations of $158.5 million, according to LSEG data.
"We've really optimized that U.S. grant opportunity, which was something that was uncertain at the beginning of the year," CEO John Jacobs said in an interview.
The company expects the 2023-2024 U.S. market for COVID shots to be between 30 million and 50 million doses.
"We and many others thought there would be 80 to 100 million doses in the U.S. market this year and it turned out to be significantly smaller than that," said Jacobs.
Over 15 million people in the United States, around 4.5% of the population, had received the updated COVID-19 shots by Oct. 27, according to a Department of Health and Human Services spokesperson, lagging behind last year's vaccinations.
Novavax said it had $666 million in cash as of Sept. 30, up from $518 million at the end of June.
The company's updated COVID shot, using a more traditional technology than the mRNA-based vaccines of rivals Pfizer and Moderna, was authorized in the U.S. in October.
Novavax missed out on the COVID vaccine windfall that benefited rivals due to manufacturing issues that delayed its filing for approval when the pandemic was raging.
Its stock plunged 93% last year and is down about 34% this year.
(Reporting by Bhanvi Satija in Bengaluru and Patrick Wingrove in New York; Editing by Sriraj Kalluvila and Bill Berkrot)
