The layoffs come as the company posts nearly $300 million in net losses and just over $80 million in revenue during the first quarter of 2023.
Pictured: Gloved hand holding syringe in front of Novavax sign, Courtesy of rafapress/Getty Images
Reeling from the rough launch of its COVID-19 vaccine and a shrinking pandemic market, Novavax is reducing its global workforce by approximately 25%, the company announced Tuesday in its first-quarter earnings report.
The strategic reorganization will see some 500 staff laid off out of the nearly 2,000 employees that Novavax cited in its 2022 annual report. The move will enable the company to cut its costs by 20% to 25% this year and contribute toward its goal of reducing its annual expenditure by around 40% to 50% by 2024, according to the press release.
During the company’s earnings call Tuesday morning, CEO John Jacobs called the headcount reduction a “difficult decision” but one that was “necessary” to help Novavax streamline its infrastructure and resources, allowing it to maximize the “current global opportunity” for its COVID-19 vaccine.
In the first quarter of 2023, Novavax reported net losses of $294 million. Meanwhile, the company posted only $81 million in total revenues, as opposed to $704 million during the same period in 2022. As of the close of the first quarter, Novavax had $637 million in cash, cash equivalents and restricted cash, less than half of its $1.3 billion cash position at the end of 2022.
Novavax, which was founded in 1987, has only one product: its COVID-19 vaccine Nuvaxovid. Its launch, however, was hamstrung by multiple challenges, including manufacturing issues that bogged down its Phase III trial, as well as regulatory concerns regarding a risk of myocarditis and severe allergies.
By the time Nuvaxovid earned the FDA’s emergency use authorization in July 2022, its biggest competitors, Pfizer/BioNTech and Moderna, had already captured much of the U.S. market.
Despite these challenges, the company will continue to rely on the vaccine for most of its earnings in the coming year. Novavax expects to make between $1.4 billion and $1.6 billion in 2023, of which its coronavirus shot will account for $1.06 billion to $1.24 billion.
However, much of Nuvaxovid’s projected earnings will still depend on the company’s timely release of the updated shot to cover a broader spectrum of COVID-19 variants. To this end, Novavax has engaged global regulatory bodies for guidance on strain selection. The company has also amended its agreement with the U.S. government to pledge up to 1.5 million more doses of the vaccine this year.
Novavax is also currently running the second part of its Phase III strain change study, which is an FDA requirement for approval of the updated Nuvaxovid composition for 2023-2024. Topline results are expected in mid-2023.
COVID-Influenza Combination Vaccine
Beyond Nuvaxovid, Novavax is also seeking to capitalize on its recombinant protein-based nanoparticle vaccine technology to see other candidates through to the market. Chief among these is its COVID-Influenza Combination (CIC) vaccine candidate, for which topline Phase II data were also released Tuesday.
“We believe our technology is particularly well-suited for combination vaccines, because large amounts of antigens can be incorporated without impacting tolerability,” Filip Dubovsky, president of R&D at Novavax, said during the call. “This is a feature that not all vaccine platforms share.”
Compared with approved vaccines, the CIC formulation was able to elicit comparable immune responses against SARS-CoV-2 and the four homologous influenza strains. The safety profile was also comparable to approved counterparts, inducing no adverse event of special interest or potentially immune-mediated medical toxicities.
Novavax is also developing a standalone flu vaccine and a high-dose COVID-19 shot, both of which induced robust immune responses in the Phase II study relative to approved comparators.
Tristan Manalac is an independent science writer based in metro Manila, Philippines. He can be reached at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
