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Novavax (NVAX) Q2 Earnings Miss, Cuts '22 Sales Guidance by Half

·5-min read

Novavax, Inc. NVAX incurred a loss of $6.53 per share for second-quarter 2022, which missed the Zacks Consensus Estimate of earnings of $5.51. In the year-ago quarter, NVAX had posted a loss of $4.75 per share.

Revenues for the quarter were $185.9 million, down 37.6% year over year. Revenues missed the Zacks Consensus Estimate of $1.04 billion.

Quarter in Detail

During the second quarter, NVAX generated $55.5 million in product sales from NVX-CoV2373, its protein-based COVID-19 vaccine. In the year-ago quarter, the company did not record any product sales. Sequentially, the sales figure plunged 90.5% quarter over quarter. The significant decline was on account of timing issues with regard to shipments for the COVID vaccine doses to Europe and challenges being faced by the COVAX facility in supplying COVID-19 vaccine doses to low and middle-income countries.

NVAX recorded $22.7 million of revenues from royalties and adjuvant sales to license partners.

Novavax’s grant revenues declined 60.4% year over year to $107.8 million for the same period as it materially completed the activities required under the agreements with the U.S. Government.

In the reported quarter, research and development expenses were $289.6 million, down 49.2% year over year. This decline was attributable to lower clinical development activities for NVX-CoV2373 as well as lower manufacturing costs for the vaccine incurred during the quarter.

Selling, general and administrative expenses rose 47.8% year over year to $108.2 million. The rise in expenses was on account of activities to support the commercial launch of NVX-CoV2373.

As of Jun 30, 2022, Novavax had $1.4 billion of cash and cash equivalents compared with $1.6 billion as of Mar 31, 2022.

2022 Guidance Lowered

Novavax lowered its total revenue guidance for the full year. It now expects to record total revenues between $2 billion and $2.3 billion, down from the previously-expected guidance of $4 billion and $5 billion. Per management, the updated guidance accounts for the changing market dynamics.

Shares of Novavax were down 31% in after-hours trading on Aug 8, most likely following the slashing of total revenue guidance by half. The announcement of the company’s worse-than-expected earnings results also likely contributed to this decline. The stock has plunged 60.0% this year compared with the industry’s 18.0% decline.

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Recent Updates

Overall, the company’s COVID vaccine has gained authorization for use as a primary two-dose regimen of its COVID vaccine in adults across 43 countries. As of Aug 8, NVAX claims to have delivered over 73 million doses of its COVID-19 vaccine worldwide. The companycontinues to garner authorizations for using its COVID-19 vaccine in additional countries and for additional patient populations.

Currently, a booster dose of NVX-CoV2373 is authorized for use in Japan, Australia and New Zealand. The vaccine has been authorized for adolescents (aged 12 to 17 years) in the European Union, India, Japan, Australia and Thailand. Regulatory filings in other countries seeking these label expansions are either currently underway or undergoing review.

After a long-awaited period of time, NVAX secured emergency use authorization (EUA) from the FDA for its COVID vaccine as a primary two-dose regimen in adultsin July 2022. The company has also signed an agreement with the U.S. government to supply 3.2 million doses of its protein-based COVID-19 vaccine.

Novavax is also evaluating the vaccine across multiple studies. Earlier this month, the company initiated the phase IIb/III Hummingbird study evaluating a primary two-dose regimen of its COVID vaccine in younger children aged 6 months to 11 years of age. Initial data from this study is expected in first-quarter 2023. NVAX also recently completed the administration of a booster dose of NVX-CoV2373 in a late-stage study in adolescents.

Topline data from clinical studies evaluating its Omicron-specific booster vaccine is expected in third-quarter 2022. The company expects to file a regulatory application for this candidate with the FDA in fourth-quarter 2022.

NVAX is also evaluating a COVID-19-influenza combination (CIC) vaccine candidate in phase I/II study. The CIC vaccine is a combination of NVX-CoV2373 and NanoFlu in a single formulation. This April, Novavax announced initial data from this study, which demonstrated the CIC vaccine to be feasible and immunogenic. The immune responses were comparable to the standalone NanoFlu and the standalone NVX-CoV2373 formulations. NVAX expects to begin a phase III study evaluating the efficiency of this vaccine in the next year.

Novavax’s COVID vaccine faces stiff competition from the mRNA-based COVID vaccines developed by Moderna MRNA and Pfizer PFE/BioNTech BNTX. While Novavax is yet to tap the potential of the U.S. market, Moderna and Pfizer/BioNTech are currently way ahead of the curve. The vaccines developed by them dominate the U.S. market and are the only jabs that have received full approval for use in the country. While Moderna’s vaccine is approved for use in adults aged 18 years and older, the Pfizer/BioNTech vaccine is approved for use in individuals aged 12 years and older.

The Moderna and Pfizer/BioNTech vaccines are also authorized for use in individuals aged six months and above in the United States.A third and fourth booster dose of Moderna and Pfizer/BioNTech vaccines have also been authorized for use in certain age groups by the FDA. 

Novavax, Inc. Price

 

Novavax, Inc. Price
Novavax, Inc. Price

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Zacks Rank

 

Currently, Novavax has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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