Novavax lays off 25% of workforce, releases 2023 outlook

NOVAVAX said on Tuesday (May 9) it will reduce its global workforce by 25 per cent as the cash-strapped biotech pushes forward with its plans to slash expenses and navigate tepid demand for its Covid-19 vaccines.

The company, which had earlier flagged significant uncertainty around generating revenue for the year, said it expects total annual revenue between US$1.4 billion and US$1.6 billion, relying on a timely launch of its updated Covid shot.

Separately, Novavax said its Covid/flu combination shot was safe and well-tolerated in a mid-stage study, sending shares of the company up 9 per cent before the bell.

Global regulators expect Covid vaccination campaigns to be conducted once a year, similar to annual flu inoculations.

Novavax’s coronavirus vaccine is its lone marketed product after 35 years in business and the company is now hoping that its cost controls and a successful trial for its Covid/flu combination vaccine candidate will help it stay afloat.

For the first quarter, it reported a net loss of US$293.9 million, compared with a year-ago profit of US$203.4 million.

The layoffs, part of Novavax’s ongoing cost-reduction measures, would translate to about 498 jobs out of the 1,992 full-time employees it had as of Feb 21 according to the company’s latest regulatory filings.

The biotech expects the cost-cut plans to help reduce its annual research and commercial expenses by 20 per cent to 25 per cent from last year. It will also record about US$10 million to US$15 million in restructuring charges.

The company had US$637 million in cash and equivalents at the end of the quarter, compared with US$1.3 billion as of Dec 31. REUTERS