Novavax Q3 Revenue Slumps on Low Vaccination Rates, Trims 2023 Outlook

Pictured: Novavax/Getty Images, STR/NurPhoto

Struggling from the slow rollout and lack of demand for its COVID-19 vaccine, Novavax scaled down its full-year guidance Thursday, as total revenue for the third quarter sank 75% compared to the prior year. 

Thanks to a boost from $165 million in U.S. government grants to help cover clinical trial expenses, Novavax’s third-quarter revenue was higher than expected at $187 million, down from $735 million in the prior year. An additional $12 million came from royalties. 

With sagging sales, Novavax dropped its full-year guidance for 2023 to a range of $900 million to $1.1 billion, down from its previous forecast of $1.3 billion to $1.5 billion. 

R&D expenses for the quarter were $106 million, compared to $304 million for the same quarter last year. In the first nine months of the year, it cut $950 million out of its operating expenses. Yet, after warning investors it may not be able to continue operations in March 2023, Novavax is now ready to slash even more from its spending.  

The vaccine maker announced it is prepared to initiate an additional cost cutting program to further reduce 2024 expenses by over $300 million. Novavax anticipates slashing annual research and commercial expenses up to 25% through cost-cutting initiatives and layoffs. In May 2023, the company announced it would reduce its workforce by about 25%.  

Novavax is suffering from the same disappointing financial results Moderna, Pfizer and BioNTech have reported—a dwindling market for COVID-19 vaccines. 

While Novavax’s updated COVID-19 vaccine won regulatory approval last month, the market is significantly smaller this year than anticipated. Experts had estimated 80 million to 100 million doses in the U.S. market this year, but the expectation for COVID shots is now between 30 million to 50 million. As of Oct. 27, only around 4.5% of the U.S. population has received the updated shots now available. 

"We are proud of the progress we made over the last quarter to deliver the only protein-based non-mRNA vaccine option in the U.S.,” Novavax CEO John Jacobs said in a statement, clarifying that despite the planned cost reductions, the company will maintain its “ability to bring forward a combination vaccine.” 

Novavax and Pfizer are respectively working on combining their COVID shots with protection from seasonal influenza. Expecting to initiate a pivotal trial in the second half of 2024, Novavax is aiming for approval and launch as early as 2026. 

Kate Goodwin is a freelance life science writer based in Des Moines, Iowa. She can be reached at kate.goodwin@biospace.com and on LinkedIn.