Novavax Profits Soar as Vaccine Hopes Hang on Updated COVID Shot!

Novavax, the embattled vaccine maker, scored a surprising victory this week, announcing $58 million in net income for the second quarter of the year—a major departure from their $510 million loss during the same period last year.

Novavax soared to new heights with their impressive second-quarter sales that came in at an incredible $424.4 million – almost double the expected figure of $239.2 million and a whopping 130% increase year-over-year from the previous quarter’s $185.9 million!

Novavax has recently adjusted their full year revenue forecast, cutting it from $1.4 billion to $1.6 billion to a range between $1.3 and $1.5 billion. Furthermore, the biotech recently entered into a deal with SK Bioscience, issuing 6.5 million shares worth approximately $85

Novavax’s fate hinges on the launch of their updated COVID-19 shot this fall. With the FDA’s decision on their new non-mRNA XBB vaccine due in late September, the wait is on to see if their turnaround strategy will prove successful. Every moment matters for Novavax, and all eyes will be on the FDA for their decision.

As Novavax CEO John Jacobs stated on Tuesday’s investor call, we still have major milestones to accomplish, with various risks that come with progress. Much of our success for the year is contingent on how regulators respond to our filings, as well as the demand for a COVID vaccine throughout the upcoming fall season.

Novavax is on track to fulfill its ambitious cost-cutting program, with over a billion dollars in reduced liabilities in 2020 and a projected reduction in annual R&D and SG&A expenses of between 20-25% in 2023. To support the rollout of a fall vaccination season, the organization has prudently retained the funds necessary, boasting over $900 million in cash and receivables.

After a few turbulent years, Novavax received welcome news in October 2020 when it pivoted to develop vaccines for COVID-19. However, manufacturing issues soon turned up and slowed their Phase Ⅲ trials and postponed their vaccine launch. Moreover, their coronavirus vaccine, Nuvaxovid, met with safety concerns such as myocarditis and severe allergic reactions, making the journey to the vaccine even more difficult.

After significant delays, the Novavax vaccine was finally granted emergency use authorization in July 2022—but by then competitors such as Pfizer and BioNTech, as well as Moderna, had largely taken the lion’s share of the market. The company informed investors that, without further financial support, they may not be able to keep their operations running beyond February 2024.

The first quarter of 2023 saw a glimmer of hope for Novavax. Taking advantage of their sole product, a protein-based COVID vaccine, cost-cutting initiatives, and the momentum of the FDA’s vaccine development, the company released a strong financial report for the quarter. This was only strengthened by their impressive second-quarter earnings, validating the positive progress made during the first three months of the year.

At an FDA advisory committee meeting in June 2023, the company revealed that its coronavirus vaccine provides protection against multiple subvariants, including XBB.1.5. In response to this, the FDA has urged manufacturers to create vaccines which feature a monovalent XBB.1.5 composition, indicating a need to update existing COVID-19 vaccines.

Novavax’s president of research and development, Filip Dubovsky, expressed optimism to investors on Tuesday in regards to the company’s XBB 1.5 vaccine, revealing that its preclinical and clinical packages as well as its FDA filing will be completed this month. According to Dubovsky, U.S. and global approval for XBB 1.5 is likely given “adequate” data, and the product is anticipated to be available right in time for the FDA-CDC’s scheduled end-of-September release.

Novavax CFO Jim Kelly announced on Tuesday’s earnings call that the company anticipates a surge in sales for its updated XBB COVID vaccine. A key factor in this will be the recent US FDA disclosure regarding their plans to approve updated COVID vaccines in late September. Furthermore, Kelly expects other regulatory approvals and deliveries of its vaccine outside of the United States to transpire in the fourth quarter of this year.

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