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Shares of Novavax (NASDAQ:NVAX) are down 27% as we speak after the Covid-19 vaccine maker raised doubts about its capability to proceed operations. Previous to as we speak, NVAX inventory had declined 89% over the previous 12 months to commerce at $9.26 per share.
The Gaithersburg, Maryland-based pharmaceutical firm additionally introduced it’s reducing spending and getting ready for a fall marketing campaign of its long-delayed Covid-19 vaccine. Novavax raised the prospect of it ceasing operations because it reported lackluster fourth-quarter 2022 monetary outcomes.
What Occurred With NVAX Inventory
In asserting its This fall outcomes, Novavax stated that it faces “important uncertainty” associated to its 2023 income and funding from the U.S. authorities. The corporate reported that it misplaced $182 million, or $2.28 per share, in This fall as gross sales of its Covid-19 vaccine got here in at a weaker-than-expected $357 million. Analysts had forecast vaccine gross sales in the course of the closing quarter of 2022 within the quantity of $380 million.
Nevertheless, Novavax did point out it has $1.33 billion in money available, which ought to be sufficient to fund its operations over the following 12 months. “If we execute on our working plan, we’ll be in a really robust place not solely on the finish of this 12 months, however going into subsequent 12 months,” stated Novavax CEO John Jacobs, who joined the corporate in late January of this 12 months.
Why It Issues
Novavax has struggled to carry its Covid-19 vaccine to market. The corporate’s vaccine was solely licensed to be used by the U.S. Meals and Drug Administration (FDA) in July of final 12 months, effectively behind opponents comparable to Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA). Since final summer time, solely about 80,000 of Novavax’s Covid-19 pictures have been administered worldwide.
In lots of respects, Novavax’s Covid-19 vaccine got here to market simply as demand for the pictures was waning. Bringing the vaccine to market was repeatedly delayed by regulatory points, manufacturing issues and weak orders. Whereas Novavax has been in enterprise since 1986, the Covid-19 vaccine is its first commercially accessible product.
In talking to analysts following the This fall outcomes, Jacobs stated the corporate has $2 billion price of signed contracts with governments world wide for its vaccine, and the corporate plans to gather on the cash owed. Nevertheless, future gross sales of the Covid-19 shot don’t look good. Consequently, Novavax is planning to chop a few of its 1,500 employees members and is contemplating “all choices” because it assesses its future.
What’s Subsequent for NVAX Inventory
Through the pandemic’s peak, NVAX inventory traded as excessive as $330, giving the corporate a $20 billion market capitalization. Nevertheless, since hitting that peak, the share value of Novavax has dropped 97% — and that was earlier than as we speak’s steep selloff. With its future doubtful and losses mounting, traders could be smart to avoid Novavax inventory.
On the date of publication, Joel Baglole didn’t have (both instantly or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Tips.
