Novavax falls after warning of ‘significant doubts’ about future

(Bloomberg) – Novavax Inc. said there were significant doubts about its ability to stay in business into next year, the company’s latest warning after it struggled to develop and sell a Covid-19 vaccine. The stock plummeted in extended trading.

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“Significant uncertainty” surrounds 2023 earnings, although there should be enough money to fund operations, the Gaithersburg, Maryland-based drugmaker said in a statement Tuesday. The warning came as the company reported a fourth-quarter loss that nearly doubled analysts’ estimates.

“In the face of these uncertainties, there are significant doubts about our ability to continue as a going concern,” the company said.

Shares of Novavax plunged 25% in late trade as of 6:35 p.m. in New York. The stock is down 10% this year through Tuesday’s close, extending a 93% selloff into 2022.

Novavax reported revenue of $357 million last quarter, compared to the median estimate of $380.3 million compiled by Bloomberg. The company posted an adjusted loss of $2.28 per share, more than Wall Street had expected from a $1.15 per share loss. It ended the quarter with $1.34 billion in cash and cash equivalents.

Production issues had delayed the company’s regulatory filings for its Covid-19 vaccine. When Novavax received approval for its protein-based shot last year, mRNA vaccines from Moderna Inc. and Pfizer Inc. were already dominating the market. Novavax is now looking to sell its shot as the US government prepares to stop buying Covid vaccines and instead shifts that responsibility to the private market.

To date, Novavax has shipped 1.1 million doses of its Covid vaccine to the United States, a small fraction of Pfizer’s roughly 650 million and Moderna’s 400 million, according to the Centers for Disease Control and Prevention.

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The UK government canceled its deal with Novavax in December, sending shares down 34%. The company had announced that it would seek additional equity and outside capital.

(Updates with corporate statement and additional details from third paragraph)

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