Novavax to cut global workforce by a quarter

Novavax is to cut a quarter of its workforce and slash spending, the US biotech said on Tuesday, as it looks to manage costs amid waning demand for its Covid vaccine.

The firm said revenues in the three months to 31 March had tumbled to $81m from $704m a year previously, while the net loss was $294m, compared to net income of $203m in the first quarter of 2022.

Novavax, which has just one marketed product, Covid vaccine Nuvaxovid, said demand had become more seasonal, and that discussions with global regulators were ongoing regarding strain selection and advancement of commercial preparedness for autumn 2023.

It also noted there had been "positive" data from Phase II studies for three drug candidates: a standalone flu jab, a combined Covid and flu shot, and a higher dose Covid vaccine.

But Novavax said it was also focused on "significantly reducing" expenses, and would look to cut the global workforce by around 25%. Novavax employs around 2,000 people worldwide.

In total, the cost reduction plan is expected to reduce annual combined 2024 research and development and selling, general and administrative expenses by between 40% and 50%.

John Jacobs, chief executive, said: "Combined with our focus on revenue generation from Nuvaxovid and management of our current liabilities, these measures should strengthen our cash position and our potential for the long-term growth and stability of Novavax.

"Reducing our workforce has been a difficult decision but we believe it was necessary to better align our infrastructure and scale to the endemic Covid opportunity.

"Though we still have substantial challenges ahead of us in 2023, we are encouraged by the progress we have made in the last quarter."

Investors welcomed the update on future products as well as confirmation that full-year revenues would likely come in between $1.4bn and $1.6bn, above analyst expectations. By 1400 the stock had put on 9% in pre-market trading.