Novavax shares slump as vaccine maker warns of its ability to stay in business

By Scott Kanowsky 

Investing.com -- Shares in Novavax Inc (NASDAQ: NVAX ) shed over a fourth of their value in pre-market U.S. trading on Wednesday after the COVID-19 vaccine maker warned of substantial doubt around its future in the wake of lower-than-expected fourth-quarter revenue.

The Maryland-based company flagged "significant uncertainty," particularly surrounding its 2023 sales, funding from the U.S. government, and pending arbitration with global vaccine alliance Gavi.

"[S]ubstantial doubt exists regarding our ability to continue as a going concern through one year from the date that these financial statements are issued," Novavax said in a statement.

A decision by the U.S. government not to extend an agreement with Novavax past December 2023 places $416 million at risk, according to a Reuters report. The result of the Gavi arbitration may also require the firm to refund about $700M it received from the group, the news agency said.

Novavax's quarterly top-line figure grew by 61% compared to the same period in the prior year, to $357M, but missed Bloomberg consensus estimates of $380.3M (NYSE: MMM ).

Meanwhile, expenses nearly doubled to $162M due to a strategy that will see Novavax move away from government contracts and attempt to start commercial sales of its COVID vaccine program. The business subsequently reported a net loss in the three months to the end of December of $182M, or $2.28 per share.

Analysts at Jefferies noted that while they continue to see value in Novavax's protein-based COVID jab, there are still a few uncertainties around the near-term outlook.

The slide in Novavax's shares put them on pace for their worst day in more than two months. The stock's market value had previously climbed to more than $20 billion at one point as it raced to develop a COVID vaccine, but has since slumped to less than $800M.