Covid vaccine maker Novavax sinks after slashing revenue forecast

Novavax shares tumbled after it slashed its full-year revenue forecast by half on tepid demand for its Covid-19 jab, underlining the challenges faced by vaccine makers that came late to market with pandemic-related shots.

The US drugmaker said on Monday that it recorded $55mn in vaccine sales in the second quarter, a sharp fall on the $586mn recorded in the previous three months. It expects to generate between $2bn and $2.3bn in total revenue in 2022, down from an earlier forecast in May of $4bn-$5bn.

The shares fell more than 30 per cent in after-hours trading following the earnings release.

Stanley Erck, Novavax chief executive, said the change to the company’s revenue forecasts reflected a collapse in demand from two markets: the US and Covax, the global vaccine initiative that aims to deliver doses to low- and middle-income nations.

“In the case of the US, I believe we were late to the market,” said Erck, who predicted the company would not generate any new sales in the US or from the Covax facility region during 2022. He said delays in vaccine shipments to Europe had also dented Novavax’s second-quarter results, which missed analysts’ expectations.

Demand for Covid jabs has fallen sharply since the start of the year as people in rich countries have become more reluctant to take repeated booster shots. Vaccine hesitancy also persists in low-income nations.

Last week, Moderna said it wrote off $500mn in inventory related to its own Covid jab.

Novavax faced manufacturing and regulatory challenges that delayed the authorisation of its Covid jab in the US until mid-July, a year and half behind rival vaccines produced by Pfizer, BioNTech and Moderna.

Health officials had hoped the launch of the Novavax jab, the first protein-based Covid vaccine — a type of technology that has been used for decades against diseases including shingles and the flu — would win over vaccine sceptics.

Anti-vaccine campaigners have taken aim at shots developed by BioNTech/Pfizer and Moderna despite their effectiveness over their use of mRNA technology.

However, just over 7,000 doses of the Novavax vaccine have been administered in the US amid slow demand for primary vaccinations and boosters, according to government data.

The challenges for Novavax point to the obstacles faced by other companies developing Covid jabs that have been late to the market.

In June, Sanofi and GSK reported promising results from trials of their Covid vaccine, which they said had proved effective against the Omicron strain of coronavirus. The French and British pharmaceutical companies hope the shot will help them catch up after they fell far behind in the race to supply Covid vaccines.