Novavax stock continues plunge following disclosure of serious financial challenges

The Yahoo Finance Live team discusses the sharp drop in Novavax stock on Wednesday.

Video transcript

SEANA SMITH: Time for a triple play. Three stocks that we're watching in the final 30 minutes of trading. We've got Novavax, Rivian, and MSG. Let's start it off with Novavax.

We're looking at a sell-off today after the company warned that it's facing serious financial challenges. And how serious? Warning they actually might not survive. You're looking at losses of about 26% today, trading at levels last seen before the start of the pandemic-- a very far cry, obviously, from the all-time high, but even from that 52 week high of $91 a share.

Now, Novavax is certainly bleeding cash, losing $182 million in its most recent quarter, losing a total of $658 million for all of 2022. Now, since the start of the pandemic, Novavax has delivered just over a million doses of its COVID vaccine. That's compared to about 400 million from Moderna and 650 million from Pfizer.

B. Reilly downgrading the stock to neutral, cutting its price target to a Street-low of $10 a share, citing those critical challenges facing Novavax. Lots of questions about the potential liquidity, what that future looks like. And we're seeing that reflected in the stock today, but might not survive. It's getting serious there.

JOSH SCHAFER: Yeah, I mean, you look at the price of Novavax, like you said, Seana, it's back to pre-pandemic levels. And when you think back to pre-pandemic and what Novavax was as a company, they hadn't brought a vaccine to market prior to COVID-19, right?

And I think that's an important thing to remember here when we think about the company kind of coming full circle. I mean, the federal stimulus of buying COVID-19 vaccines is just ending. And I think that they're sort of seeing where that puts them, obviously, significantly as they have been pretty much the entire time here-- behind Moderna, behind Pfizer. And I don't really see a great path forward here, Dave.

DAVE BRIGGS: No, I don't either. And their CEO says the company needs to do three things-- deliver a competitive product for the upcoming vaccination season, one. Cut spending, two. And number three, find ways to boost sales beyond the vaccine alone.

That is one, two, and three. Just find a product beyond the vaccine. You've got to pivot. They are woefully slow to turn this ship around and find a new product-- not looking likely.

JOSH SCHAFER: Finding a new product costs more money and people are already the cost.

DAVE BRIGGS: R&D, hundreds of millions, if not billions, of dollars in that space.