Novavax eases doubts on future with job cuts, COVID/flu shot data

(Reuters) -Novavax Inc on Tuesday announced plans to cut 25% of its workforce and unveiled promising data for its COVID-influenza combination vaccine and two other shots, raising hopes of a recovery for the cash-strapped biotech.

Shares of Novavax jumped nearly 9% before the bell as the company also released its 2023 revenue forecast after earlier flagging significant uncertainty around its future.

It now sees total annual revenue between $1.4 billion and $1.6 billion, compared with market estimates of $831.6 million, according to five analysts polled by Refinitiv.

Novavax’s coronavirus vaccine is its lone marketed product after 35 years in business and the company is now hoping that its cost controls and a successful trial for its COVID/flu combination vaccine candidate will help it stay afloat.

Data from a mid-stage trial in adults aged 50 to 80 years showed that the combination shot produced an immune response comparable to its protein-based COVID vaccine and already approved influenza shots.

Global regulators expect COVID vaccination campaigns to be conducted once a year, similar to annual flu inoculations.

All three of Novavax’s vaccine candidates – the COVID/flu combination shot, a standalone flu shot and a higher dose of its COVID shot – were all safe and well-tolerated in the study, the company said.

The layoffs, part of Novavax’s ongoing cost-reduction measures, would translate to about 498 jobs out of the 1,992 full-time employees it had as of Feb. 21 according to the company’s latest regulatory filings.

The biotech expects the cost-cut plans to help reduce its annual research and commercial expenses by 20% to 25% from last year.

The company’s cash and equivalents fell to $637 million at the end of the quarter from $1.3 billion as of Dec. 31.

Novavax also posted a first-quarter net loss of $3.41 per share, compared with estimates of $3.46.

(Reporting by Bhanvi Satija and Raghav Mahobe in Bengaluru; Editing by Devika Syamnath)