By Connor Lynch

Pictured: Gloved hand holding syringe in front of Novavax sign, Courtesy of rafapress/Getty Images
Embattled vaccine maker Novavax is back in the black—at least, for now. In its second-quarter financial update Tuesday, the Maryland-based biotech posted a surprise $58 million in net income compared to a net loss of $510 million in the same period last year.
Novavax reported second-quarter sales of $424.4 million, a significant increase from the expected $239.2 million in the quarter and $185.9 million during the same period in 2022.
The latest update saw the biotech trim its full-year revenue forecast, but it is still anticipating between $1.3 and $1.5 billion in sales and grants, down from the $1.4 billion to $1.6 billion guidance provided in May. The company also entered into a stock purchase agreement with SK Bioscience, with Novavax issuing 6.5 million shares at $13 each to the South Korean company for an $85 million equity investment.
However, Novavax is not out of the woods as its turnaround strategy hinges on the launch of its updated COVID-19 shot this fall. The FDA isn’t expected to make a decision on Novavax’s new non-mRNA XBB COVID vaccine until late September.
“There is still much work to be done with significant execution risk ahead of us. Much of our success this year will be dependent on how and when regulatory authorities react to our filings, how the fall season unfolds, including demand for COVID vaccine in general,” Novavax CEO John Jacobs said on Tuesday’s earnings call with investors.
Novavax is continuing to execute its cost-cutting plan announced in May, which includes a 25% reduction in its workforce. For the full-year 2023, the company reiterated its target to reduce annual combined R&D and SG&A expenses to between $1.3 billion and $1.4 billion, a 20% to 25% reduction compared to 2022. Novavax also said it has reduced its current liabilities by over $1 billion this year and with the approach of the fall vaccination season has over $900 million in cash and receivables.
It’s welcome news for Novavax, which has been having a difficult few years. Back in October 2020, after pivoting to developing vaccines for COVID-19, it announced it had run into manufacturing issues, which slowed its Phase Ⅲ trials and vaccine launch. And its coronavirus vaccine, Nuvaxovid, ran into challenges including alleged safety concerns such as myocarditis and severe allergic reactions.
Having weathered those challenges, the vaccine was only granted emergency use authorization by the FDA in July 2022, after Pfizer and BioNTech as well as Moderna had largely already cornered the market. Novavax’s full-year 2022 financial report informed investors that the company may not be able to continue operations past February 2024.
However, the first quarter of 2023 proved more optimistic, according to Novavax’s financial report. Cutting costs and leaning on its only product, a protein-based coronavirus vaccine, could help to further turn things around for the company. The latest second-quarter earnings support that momentum, as does the direction of the FDA’s COVID vaccine efforts.
In June 2023, the company released data during an FDA advisory committee meeting showing that its vaccine provides protection against multiple subvariants of coronavirus, particularly XBB.1.5. The FDA has advised manufacturers who will be updating their COVID-19 vaccines that they should develop vaccines with a monovalent XBB.1.5 composition.
Filip Dubovsky, Novavax’s president of research and development, told investors Tuesday that the company submitted the preclinical and clinical packages and is going to complete its filing with the FDA this month. “The XBB BA 5 data is adequate and not only for the U.S. but globally for approval for XBB.1.5. And our plan is to have the product available in time for the FDA-CDC release at the end of September,” Dubovsky said.
Novavax CFO Jim Kelly said on Tuesday’s earnings call that the company expects its updated XBB COVID vaccine product sales will materially occur in the fourth quarter. “This is based on the recent U.S. FDA announcement for plans to approve updated COVID vaccines in late September, plus the expected timing for other regulatory approvals and deliveries of our updated XBB COVID vaccine outside the U.S.,” Kelly added.