Novavax (NVAX) Q3 Earnings Miss, Lowers '22 Sales Outlook

Novavax, Inc. NVAX incurred a loss of $2.15 per share for third-quarter 2022, which missed the Zacks Consensus Estimate of earnings of $2.21. In the year-ago quarter, NVAX posted a loss of $4.31 per share.

Revenues for the quarter were $735 million, up 311% year over year. Revenues beat the Zacks Consensus Estimate of $552 million.

Shares of Novavax have plunged 86.3% this year compared with the industry’s 21.5% decline.

Image Source: Zacks Investment Research

Quarter in Detail

During the third quarter, NVAX sold 35 million doses of NVX-CoV2373, its protein-based COVID-19 vaccine. The company generated $626 million in product sales. In the year-ago quarter, the company did not record any product sales. In the previous quarter, the company generated product sales worth $55.5 million.

NVAX recorded $2.2 million of revenues from royalties and adjuvant sales to license partners.

Novavax’s grant revenues declined 21.3% year over year to $106 million for the same period as it completed the activities required under the agreements with the Coalition for Epidemic Preparedness Innovations.

In the reported quarter, research and development expenses were $304 million, down 25.5% year over year. The downside was caused by a $98-million benefit received by the company following its settlement of a manufacturing agreement.

Selling, general and administrative expenses rose 58% year over year to $123 million. The rise in expenses was due to activities to support the commercialization of NVX-CoV2373.

As of Sep 30, 2022, Novavax had $1.3 billion of cash and cash equivalents compared with $1.4 billion as of Jun 30, 2022.

2022 Guidance Lowered

Novavax lowered its total revenue guidance for the year. It expects to record total revenues of- around $2 billion, which is at the low end of its previously-expected guidance of $2 billion and $2.3 billion.

Recent Updates

In a separate press release, Novavax announced topline results from a late-stage study evaluating NVX-CoV2515, its Omicron BA.1 vaccine candidate and bivalent COVID vaccine. The bivalent vaccine is a combination of NVX-CoV2373 and NVX-CoV2515. The study met the primary strain-change endpoint, with a greater neutralizing antibody response when compared to patients administered the original vaccine NVX-CoV2373. However, data from the study did not show any benefit of Novavax’s bivalent vaccine when compared to the original vaccine or the Omicron BA.1 vaccine candidate.

Overall, Novavax’s COVID vaccine gained authorization for use of its COVID vaccine in more than 40 countries. As of Nov 8, management claims to have delivered over 94 million doses of its COVID-19 vaccine worldwide. The companycontinues to garner authorizations for using its COVID-19 vaccine in additional countries and for additional patient populations.

During the quarter, Novavax securedauthorization from the FDA to use its COVID vaccine as a primary two-dose regimen in adults and adolescents aged 12 years and above. Last month, the vaccine also received the regulatory agency’s authorization for using a booster dose in adults as a heterologous or homologous shot. Similar authorizations have also been secured by the company in Europe.

Novavax is also evaluating the vaccine across multiple studies. Earlier this August, management initiated the phase IIb/III Hummingbird study evaluating a primary two-dose regimen of its COVID vaccine in younger children aged six months to 11 years of age. Initial data from this study is expected in first-quarter 2023.

Last month, Novavax announced updated topline data from a phase I/II study evaluating the safety and tolerability of its COVID-19-Influenza Combination (CIC) vaccine candidate. The CIC vaccine is a combination of NVX-CoV2373 and Novavax’s seasonal influenza vaccine candidate in a single formulation. The CIC vaccine candidate proved feasible, well-tolerated and immunogenic, inducing antibody and T-cell responses against SARS-CoV-2 and homologous and heterologous influenza strains in the subjects. Based on these results, management intends to start a phase II confirmation study by the end of this year.

Novavax’s COVID vaccine faces stiff competition from the mRNA-based COVID vaccines developed by Moderna MRNA and Pfizer PFE/BioNTech BNTX. While Novavax is yet to tap the potential of the U.S. market, Moderna and Pfizer/BioNTech are currently way ahead of the curve. The vaccines they developed dominate the U.S. market and are the only jabs that have received full approval for use. The vaccines developed by Pfizer/BioNTech and Moderna are approved/authorized for use in individuals as young as six months.

Moderna and Pfizer/BioNTech have also developed their respective bivalent vaccines, which have been authorized for use in children as young as five years. Novavax is yet to make a regulatory filing for its bivalent booster vaccine.

Novavax, Inc. Price

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Zacks Rank

Currently, Novavax has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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