Novavax deeply cut its full year revenue guidance Monday, with no new Covid vaccine sales expected for 2022 in the U.S. or from an international alliance called Covax that represents low and middle income countries.
The Maryland biotech company cut its 2022 sales outlook by about 50% and now expects to generate $2 billion to $2.3 billion in revenue this year. Novavax previously forecast $4 billion to $5 billion in revenue for the year.
Novavax’s stock dropped 33% in after hours trading. The company posted a loss of $6.53 per share and booked revenue of $186 million for the quarter, well below expectations.
“For the quarter revenue was $186 million, a significant shortfall from both the first quarter results, and as I said from our expectations,” CEO Stanley Erck told analysts during the company’s earnings call. “We are now projecting that we will have no new revenues in 22 from the U.S .or from Covax.”
Erck said Novavax was originally expecting to book sales from 110 million shots in the U.S. and 350 million shots from Covax this year. But Novavax was late to the U.S. market, he said, where people are still overwhelmingly getting vaccinated with Pfizer and Moderna’s shots.
Novavax received U.S. authorization for its Covid shots for adults earlier this summer, but 77% of people in that age group are already fully vaccinated with Pfizer, Moderna and to a lesser degree Johnson & Johnson’s shots. The U.S. has ordered only 3.2 million doses of the Novavax vaccine so far.
Erck said Novavax has struggled because its shots are not yet approved as a booster or for adolescents in the U.S. yet, the core of the remaining market for Covid vaccination in the U.S.
“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.
A surge in vaccine supply to Covax also limited the alliance’s need for shots from Novavax, Erck said. Covax has struggled to distribute its current inventory to low and middle income countries, he added.
Novavax’s vaccine sales slowed to $55 million in the second quarter from nearly $585 million in the first part of the year. The company took a net loss of $510.5 million overall in the second quarter compared to a net loss of $352.3 million in the same period last year — before its vaccine was authorized anywhere. Novavax turned its first quarterly profit earlier this year.
Novavax was one of the original participants in the U.S. race to develop a Covid vaccine in 2020, called Operation Warp Speed. The company received $1.8 billion in taxpayer funding. But Novavax fell behind Pfizer and Moderna as it struggled to get its manufacturing base in place.
Novavax is now manufacturing and delivering vaccine, but demand for the Covid shots has softened overall as many people in major markets are already immunized and the public is less focused on the health risk posed by the virus despite stubbornly high infections.