Novavax Tumbles After Warning of ‘Substantial Doubt’ Over Future

(Bloomberg) — Novavax Inc. said there’s substantial doubt about its ability to stay in business through next year, the latest warning from the company after it struggled to develop and sell a Covid-19 vaccine. The stock plunged in extended trading.

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“Significant uncertainty” surrounds 2023 revenue even though there should be enough money to fund operations, the Gaithersburg, Maryland-based drugmaker said in a statement Tuesday. The warning came as the company reported a fourth-quarter loss almost twice as wide as analysts had estimated.

“Given these uncertainties, substantial doubt exists regarding our ability to continue as a going concern,” the company said.

Shares of Novavax plunged 25% at 6:35 p.m. in New York in late trading. The stock slid 10% this year through Tuesday’s close, extending a 93% selloff for 2022.

Novavax reported sales of $357 million last quarter, compared with the average estimate of $380.3 million compiled by Bloomberg. The company posted an adjusted loss of $2.28 a share, more than Wall Street’s expectation of a loss of $1.15 a share. It ended the quarter with $1.34 billion of cash and equivalents.

Manufacturing troubles had delayed the company’s regulatory submissions for its Covid-19 vaccine. By the the time Novavax received authorization for its protein-based shot last year, mRNA vaccines from Moderna Inc. and Pfizer Inc. already dominated the market. Novavax now finds itself trying to sell its shot as the US government prepares to stop buying Covid vaccines and instead let that responsibility shift to the private market.

To date, Novavax has delivered 1.1 million doses of its Covid vaccine in the US, a small fraction of the roughly 650 million from Pfizer and 400 million from Moderna, according to data from the Centers for Disease Control and Prevention.

The UK government cut its contract with Novavax in December, sending shares tumbling 34%. The company had said it was seeking additional equity and debt.

(Updates with company statement and additional details from third paragraph)