Novavax tumbles 31% as waning COVID-19 vaccine demand hits revenue forecast

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U.S. vaccine maker Novavax slumped nearly 31% on Tuesday as falling demand for its COVID-19 shot from low- and middle-income nations led the company to cut its annual revenue expectation by half.

Demand for its vaccine is also waning in the United States, where it was authorized for use among adults last month and was expected to be preferred by the skeptics of messenger RNA-based shots from Moderna Inc and Pfizer Inc.

But only 7,381 Novavax vaccine doses have been administered so far in the country, with Chief Executive Stanley Erck saying that its late launch could have hampered demand. 

The company now expects 2022 revenue between $2 billion and $2.3 billion, compared with its prior forecast of $4 billion to $5 billion when it was hoping to benefit from the demand for its shots as part of the COVAX vaccine sharing program.

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 Vials with a sticker reading, “COVID-19 / Coronavirus vaccine / Injection only” and a medical syringe are seen in front of a displayed Novavax logo in this illustration taken October 31, 2020.  (REUTERS/Dado Ruvic/Illustration/File Photo / Reuters)

The forecast cut also dashes any hope of Novavax being able to garner a share of the market for the two-dose initial vaccination program, said Cowen analyst George Yordanov.

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"We completely share and understand investors' frustration with management's execution and lack of accurate near-term guidance," he said in a note.

Novavax CEO Stanley Erick (Reuters)

Analysts, however, expect the company to capture a small but meaningful share of a fast-developing market for COVID re-vaccinations.

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Dr. Nita Patel, Director of Antibody discovery and Vaccine development, returns a box of potential coronavirus, COVID-19, vaccines to a fridge at Novavax labs in Gaithersburg, Maryland on March 20, 2020, one of the labs developing a vaccine for the c ((Photo by ANDREW CABALLERO-REYNOLDS / AFP)  / AFP)

It could still be a 'viable COVID vaccine player in the future $5-10 billion market as it has shown comparable/better clinical profile vs mRNA vaccines, Jefferies analyst Roger Song said in a note.

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Novavax shares were trading lower at $39.30 before the bell. Rival Moderna Inc was also down about 3%. Earlier this month, it said gains from orders for new booster shots were offset by unallocated vaccines under the COVAX program.

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