Covid Vaccine Maker Novavax Shares Remain Volatile On Surprise Q2 Profit: The Details

Shares of Novavax Inc NVAX after reported Q2 revenue of $424 million, compared to $186 million a year ago, beating the consensus of $257.62 million.

The company is on track with its global restructuring and cost reduction plan. It reiterates its target to reduce annual combined R&D and SG&A expenses by approximately 20%-25% in 2023 versus 2022 and by approximately 40%-50% in 2024 versus 2022.

The company reported an EPS income of $0.58, a turnaround from an EPS loss of $(6.53) a year ago, beating the consensus estimate of $(1.24).

Novavax CEO John Jacobs told CNBC that the company pulled forward some sales that “might have drifted” into Q3 from prior Covid vaccine purchase agreements, recognizing those sales instead in Q2. 

Jacobs noted that there will be “little to no sales” in the third quarter because the FDA will not decide on Novavax’s new Covid shot until late September. 

Also Read: Novavax’s COVID-19 Vaccine Gets Complete Approval From European Commission.

Guidance: Novavax lowered its FY23 revenue guidance to $1.3-$1.5 billion from prior guidance of $1.4-$1.6 billion and the consensus of $1.44 billion.

Separately, Novavax executed a new strategic partnering agreement with SK Bioscience, including an equity investment of $85 million in Novavax at $13.00 per share.

It also sees an extension of exclusive commercial rights in South Korea until February 2029 and non-exclusive rights in Thailand and Vietnam until June 2028, with a $4 million milestone to Novavax, as well as royalties on future product sales.

SK bioscience agreement further reduces current liabilities by $195 million for a total reduction of over $1 billion in 2023.

Price Action: NVAX shares are down 3.86% at $7.23 on the last check Tuesday.