Novavax's 22% Post-Earnings Plunge: 5 Factors That Took Toll

Zinger Key Points
  • Novavax turned in disappointing quarterly results late Monday, sending the stock sharply lower
  • The top- and bottom-line misses, a lack of clarity on the uptake in low- and middle-income countries and delay in U.S. launch worried investors

Novavax, Inc. NVAX shares slumped 22.27% after-hours on Monday, reacting to its quarterly financial report. What would have been a trophy quarter to flaunt, given COVID-19 revenue only just began to trickle in, turned out to be a big disappointment.

Here're five reasons why the COVID-19 vaccine maker's report triggered a negative reaction:

1. Vaccine Revenue Don't Live Up To Expectations: Topline came in at $704 million compared to the $845.2 million-consensus estimate. The revenue tilted more toward the low-end of the consensus range of $650 million to $1.04 billion. Novavax had one full quarter of COVID-19 revenue, given it began selling the first doses of the vaccine in Indonesia in the fourth quarter itself.

COVID-19 vaccine revenue stood at $585.63 million. The company's vaccine is sold under the brand names Nuvaxovid and Covovax, the latter referring to the output from its manufacturing and commercialization partner, the Serum Institute of India.

2. Bottom Lime Misses Mark: Novavax's top-line miss seeped all the way down to the bottom line as the earnings per share, or EPS, came in at $2.56, missing the consensus estimate of $2.69 by about 5%.

3. GAVI Contract Uncertainty: To date, the company has not received an order from the Gavi, a public-private global healthcare partnership to make immunization more accessible to poor countries, the company said on the earnings call. John Trizzino, EVP and Chief Business & Commercial Officer, suggested this could be due to the low vaccination rates across low-income countries.

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4. Pushed Back U.S. Launch: Investors could also be losing patience over the U.S. approval not coming through. The Vaccines and Related Biological Products Advisory Committee meeting to discuss Novavax's emergency use authorization application is scheduled for June 7. This application is only for the adult indication. The company has already submitted to the Food and Drug Administration adolescent data and plans to submit additional data for a booster dose.

To put things in perspective Moderna, Inc. MRNA and Pfizer, Inc. PFE along with its partner BioNTech SE BNTX, have had their respective vaccines in the market since late December 2020.

5. Subsiding Pandemic: Investors apparently are concerned about the alleviation of the pandemic situation, which could pour cold water on the uptake. The availability of potent COVID-19 treatment option will likely act as a pushback, especially amid vaccine hesitancy seen widely.

Novavax ended Monday's session at $53.26, down 7.05%. It fell an incremental 22.27% to $41.40 in after-hours trading, according to Benzinga Pro data.

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