Shares of Novavax (NASDAQ:NVAX) rose Tuesday after the company unveiled promising new vaccine data and a broad cost-cutting push that includes major layoffs.
The announcements are a sign of hope for investors after last quarter, when the biotech company raised doubts about its ability to stay in business and decided not to provide full-year guidance.
Novavax is now betting on its cost controls and new vaccines to help it stay afloat, forecasting 2023 sales of $1.4 billion to $1.6 billion, according to its first-quarter earnings report.
The Gaithersburg, Maryland-based company said its combination vaccine that targets both COVID and the flu produced a strong immune response against the viruses and was well-tolerated in a phase two trial. Novavax shared similar trial results on its stand-alone flu vaccine and new high-dose COVID shot.
The company’s COVID vaccine is its lone marketed product after 35 years in business.
Novavax also announced a global cost-cutting plan, which will involve slashing 25% of the company’s workforce. Approximately 20% of the company’s 2,000 full-time equivalent workers will be impacted, a Novavax spokesperson told the media.
The plan also involves consolidating the company’s facilities and infrastructure.
Novavax expects the plan to reduce 2023 R&D and SG&A expenses by around 20% to 25% compared with those costs in 2022. The company reported R&D expenses of $258 million and SG&A expenses of $162 million last year.
The plan is also projected to reduce 2024 R&D and SG&A costs by approximately 40% to 50% compared with 2022.
NVAX shares jumped $2.29, or 30.7%, to tower over Monday’s close at $9.74.
