Drug maker warns it may not have enough cash flow to last more than a year as losses come in more than double what Wall Street expected; new chief executive named
Novavax Inc. shares shares sank in the extended session Tuesday after the biotech drug maker posted more than double the loss that analysts expected, and reorganized with concerns it may not be in business in a year.
"While our current cash flow forecast for the one-year going concern look-forward period estimates that we have sufficient capital available to fund operations, this forecast is subject to significant uncertainty, including as it relates to 2023 revenue, funding from the U.S. government, and pending arbitration," Novavax said in a statement.
"Given these uncertainties, substantial doubt exists regarding our ability to continue as a going concern through one year from the date that these financial statements are issued," the company said.
Novavax $(NVAX)$ shares fell as much as 25% after hours, following a 6.8% rise in the regular session to close at $9.26. Shares were trading for less than $7 in the extended session, which would be their lowest prices since March of 2020 if they last into a regular session.
Novavax reported having $1.34 billion in cash and cash equivalents at the end of 2022.
The company reported a fourth-quarter loss of $182.3 million, or $2.28 a share, compared with a loss of $846.3 million, or $11.18 a share, in the year-ago period. Revenue rose to $357.4 million from $222.2 million in the year-ago quarter. Analysts surveyed by FactSet had forecast a loss of $1.01 a share on revenue of $383.1 million.
Novavax also appointed John Jacobs as chief executive, following the retirement of Stanley Erck, and Elaine O'Hara as chief strategy officer.
"In 2023, Novavax intends to focus the organization to align our investments and activities with our top priority of delivering an updated COVID-19 vaccine consistent with public health recommendations for strain composition for the 2023 fall vaccination season," the company said in a statement.
"To maximize our opportunities and mitigate the significant risks and uncertainties of the COVID-19 market, our goal is to reduce spend, extend our cash runway and operate efficiently to best position the company to deliver long-term growth," Novavax said.
Over the past 12 months, Novavax shares have cratered 89%, while the S&P 500 index has declined 9%, and the tech-heavy Nasdaq Composite Index has fallen 17%.