Covid-19 vaccine developer Novavax, one of the stars of the early pandemic, issued a going concern warning which sent its stock reeling.
It warned that “substantial doubt exists regarding our ability to operate as a going concern” through the next year.
Investors reacted to the accounting term used to identify whether a company is likely to survive the next year, sending the stock down over 27% to $6.74 in morning trade on the Nasdaq.
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The Maryland-based vaccine maker said there is uncertainty around its 2023 revenue, funding from the US government, and pending arbitration with global vaccine alliance GAVI.
Gavi paid $700 million to Novavax as pre-payment for 350 million vaccine doses, but by the time Novavax was able to deliver, Gavi no longer needed them and is now seeking a refund.
Novavax lost $182 million, or $2.28 per share, in the fourth quarter on weaker-than-expected sales of $357 million.
Novavax’s financial performance will depend on its ability to deliver an updated version of its Covid-19 vaccine to match virus strains for the 2023 fall vaccination season, CFO Jim Kelly said in an earnings call.
Novavax had $1.33 billion of cash on hand at the end of 2022.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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