Shares of Novavax (NASDAQ: NVAX) have plunged over this week after the company significantly reduced its full-year revenue forecast as it no longer expects fresh coronavirus vaccine sales for 2022 in the U.S. 

 

Guiding Down

 

Novavax trimmed its 2022 sales outlook by roughly 50%, with the company now expecting to report full-year revenue in the range of $2 billion to $2.3 billion, down from the previous forecast of $4 billion to $5 billion. 

 

The biotechnology company reported a loss per share of $6.53 in the second quarter, while analysts were expecting earnings per share of $5.50. Revenue came in at $186 million in the quarter, a far cry from the expected $1 billion. 

 

“For the quarter revenue was $186 million, a significant shortfall from both the first quarter results and as I said from our expectations,” said Novavax CEO Stanley Erck. “We are now projecting that we will have no new revenues in ’22 from the U.S. or from Covax.”

 

Novavax was initially expecting to book sales in 2022 from 110 million vaccine shots in the U.S. and 350 million shots from the global alliance Covax. However, the company was late in the U.S. market, said Erck, where people were mainly getting Pfizer and Moderna shots. 

 

The company received U.S. approval for its coronavirus vaccines for adults earlier this year, however, 77% of adults were already fully vaccinated with shots from other vaccine makers. The company registered just 3.2 million orders for its vaccine in the U.S. 

 

Erck said one of the reasons behind the slowdown is that its vaccines are not yet approved as a booster or for adolescents in the United States, one of the key Covid vaccination markets in the country. 

 

“We’re hopeful that we can get through this in days and weeks, but the absence of these indications slows the global rollout of our vaccine,” he said.

 

The company’s vaccine sales in Q2 plummeted to $55 million, from about $585 million in the previous quarter. Novavax reported a net loss of $510.5 million in the second quarter, up from the net loss of $352.3 million in the same quarter last year. 

 

Novavax was one of the first companies that was racing to create its own coronavirus vaccine in 2020. The company secured $1.8 billion in taxpayer funding but it quickly fell behind rivals Pfizer and Moderna as it failed to properly manage its manufacturing base. 

 

The gloomy forecast marks the latest major headwind for Novavax, which has been grappling with manufacturing constraints, regulatory delays, and slow growth in key markets. 

 

Furthermore, the company said it does not expect to receive a vaccine order this year from Covax, though it anticipates delivering more shots in the second half of 2022 and 2023 as customers spread out their vaccine orders due to high supply. 

 

The company said it secured more than $400 million in revenue since July 1. 

 

Novavax continues to produce and deliver Covid jabs but vaccine demand has weakened overall as the majority of people in large markets are already fully vaccinated and are less focused on the health risk posed by the current variants. 

 

After receiving an emergency authorization last month, just 7,300 shots of Novavax’s coronavirus vaccine have been administered to U.S. residents, according to new data from the Centers for Disease Control and Prevention (CDC).

 

Novavax’s shots are not as widely available in the U.S. compared to other vaccines, with just 385 sites initially offering the Novavax shots out of over 53,000 locations with coronavirus vaccines. That number has recently jumped to 986 sites.

 

Summary

 

Novavax shares are down over 30% this week after the biotech company reported disappointing results and made a deep cut to its full-year revenue projection on the back of the weak demand for its Covid vaccines.