COVID-19 vaccine maker Novavax to slash quarter of global workforce; shares surge over higher-than-expected revenue
1 min read 09 May 2023, 11:23 PM ISTNovavax, the manufacturer of the COVID-19 vaccine, has revealed its intention to reduce its global workforce by approximately 25% in an effort to decrease costs.
PremiumCOVID-19 vaccine maker Novavax has announced plans to cut about a quarter of its global workforce as it seeks to reduce expenses. The company's shares jumped as much as 40% on Tuesday as it forecast a much higher 2023 revenue than Wall Street expected and spurred hopes of a recovery for the cash-strapped biotech.
The development came even mere days after the World Health Organization ended the global emergency status for COVID-19. Novavax said that it expects to trim next year’s costs for research and development as well as selling, general and administrative expenses by about 40% to 50% compared to 2022.
The company currently has 1,992 full-time employees and the cuts will affect about 20% of the workforce or nearly 400 people. It will also affect some of the vaccine maker's contractors.
ALSO READ: US FDA asks consumers to discard SD Biosensor's Covid at-home tests; Here's why
In February, the company raised doubts about its ability to remain in business, due to uncertainty about 2023 revenue, funding from the US government, and pending arbitration with global vaccine alliance Gavi.
Novavax's total revenue sank to $81 million first quarter - from $704 million in last year’s quarter. The company swung to a net loss of $294 million from net income of $203 million. That equated to a loss of $3.41 per share.
The company said in February that it estimates that it has enough cash to fund operations for the next year, but “substantial doubt exists regarding our ability to continue as a going concern" due to uncertainty over factors like 2023 revenue.
The COVID-19 vaccine is Novavax’s lone commercial product. Theprotein-based jab debuted long after well known alternatives reached the market and only about 88,458 doses were administered in the United States. It is updating that vaccine for this fall and also developing a flu shot and a coronavirus-flu shot combination.
(With inputs from agencies)
