U.S. Markets open in 29 mins

Novavax cuts jobs to push ahead with respiratory vaccine for elderly

By Natalie Grover

Nov 9 (Reuters) - Novavax Inc said on Wednesday it would cut 30 percent of its global workforce, or 164 jobs, to help fund the testing of its vaccine for a common respiratory virus in the elderly, about two months after failing a late-stage study.

The company, which plans to begin testing its experimental Zika vaccine in humans next year, said it expects to save between $70 million to $100 million in 2017 through the restructuring.

The respiratory syncytial virus (RSV) was discovered in humans in 1957, but its complex molecular structure has stymied efforts to develop a vaccine so far.

About 2.5 million cases of RSV infection are reported in the United States each year, and the virus primarily affects those with weak immune systems, including infants and older people.

For others, it causes little more than a common cold, but in high-risk groups it could lead to serious lung infections, and sometimes, even death.

Novavax is evaluating its RSV vaccine in three groups - individuals above the age of 60, pregnant women as a means to protect unborn babies, and children aged between 6 months and five years.

However, the company said in September a late-stage study in the elderly had failed, sending its shares plunging 86 percent. Novavax blamed the result on a weaker-than-expected RSV attack rate during the trial.

Novavax said on Wednesday it planned to test the effect of the vaccine in combination with different adjuvants - ingredients used to induce a stronger immune response - in a new mid-stage study in older people.

The company did not use an adjuvant in the failed study.

"In the maternal setting, the use of an adjuvant has really given us a profound response, and so we want to change that piece of the formulation" for the trial in older adults, Chief Executive Stanley Erck told Reuters.

Once the best formulation is identified, the vaccine could then be tested in another late-stage trial, he said.

Meanwhile, the company is continuing with a late-stage trial testing its vaccine in pregnant women and an early-stage trial in a pediatric population.

Novavax, which has about 536 employees, said its net loss widened to $66.3 million from $33.1 million, a year earlier.

Up to Wednesday's close, Maryland-based Novavax's shares had lost 80 percent since Sept. 15, when the company revealed the late-stage failure.

(Reporting by Natalie Grover in Bengaluru; Editing by Sriraj Kalluvila)