In this illustration photo taken in Krakow, Poland on December 2, 2021, medical syringes and the Novavax logo are displayed in the background.
The shares of Novavax soared by 20% in premarket trading on Tuesday following the unexpected second-quarter profit announcement by the Covid vaccine manufacturer.
Novavax is working on strengthening its financial position after expressing doubts about its sustainability earlier this year. The company is banking on the launch of its updated Covid shot this fall, a global cost-cutting initiative launched in May, and a promising vaccine pipeline to sustain itself.
The following are Novavax’s financial results for the second quarter, compared to the expectations of Wall Street analysts surveyed by Refinitiv:
- Earnings per share: 58 cents, exceeding the expected loss of $1.39 per share
- Revenue: $424.43 million, surpassing the expected $239.2 million
Novavax recorded a net income of $58 million, or 58 cents per share, for the quarter. This is a significant improvement from the net loss of $510.5 million, or $6.53 per share, reported in the same quarter last year.
The company’s second-quarter sales reached $424.4 million, a substantial increase from $185.9 million in the same period last year.
Novavax CEO John Jacobs explained that some sales were pulled forward from the third quarter, which were originally part of previous Covid vaccine purchase agreements. These sales were recognized in the second quarter. However, he anticipates minimal sales in the third quarter as the Food and Drug Administration is expected to make a decision on Novavax’s new Covid shot in late September. The company can only distribute the vaccine to the public after potential approval from the agency.
Jacobs mentioned that most of Novavax’s revenue in the third quarter will come from grants and that they plan to fully utilize the seasonal opportunity of the new vaccine in the fourth quarter when there’s typically a surge in Covid cases and vaccinations.
The company revised its full-year revenue forecast to $1.3 billion to $1.5 billion, slightly lower than the original guidance of $1.4 billion to $1.6 billion provided in May. However, this adjustment includes a cash settlement from the Canadian government for forfeited Covid vaccine doses.
Novavax is also pursuing its global cost-cutting plan, which involves a 25% reduction in workforce and the consolidation of facilities and infrastructure. The plan aims to decrease research and development as well as selling, general, and administrative expenses by 40% to 50% compared to 2022.
Novavax will hold a conference call with investors at 8:30 am ET to discuss these financial results.
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