Why shares of Novavax are getting crushed

Shares of US biotech and COVID-19 vaccine maker Novavax fell sharply as the company cut its sales forecast due to a drop in demand for shots.

The company’s shares fell 31% on Tuesday after it halved its sales outlook for 2022.

Novavax’s protein-based vaccine was late to the market: it was only approved by the Food and Drug Administration for use in adults in the US last month, after most American adults had been vaccinated with shots from Pfizer, Moderna or Johnson & Johnson. Only 7,381 doses of the Novavax vaccine have been administered in the US, government data show.

The company alluded to reduced demand for the COVID-19 vaccine in its earnings call on Monday. Novavax CEO Stanley Erck said delays in receiving approval to administer booster doses of the vaccine as well as the first doses to younger Americans have also hurt sales, as those applications are the company’s best bet to find a market.

Novavax COVID-19 vaccine has not been cleared by the FDA for use as a booster vaccine.

“Getting booster and teen label expansions globally has taken longer than expected, and expanding our label is our core business priority. When combined with global oversupply, this lead to a shift in demand for our vaccine from the second quarter to the second half of the year. and 2023,” Erck said.

The company does not expect any additional revenue through Covax, an international alliance aimed at ensuring vaccine equity by delivering doses to low- and middle-income countries. The company expected to sell 350 million shots through the partnership.

Wall Street analyst Adam Crisafulli of Vital Knowledge highlighted Novavax’s huge earnings loss. Revenues were 186 million dollars, compared to 975 million expected.

Novavax cut earnings guidance from $4 billion to $5 billion to $2 billion to $2.3 billion for the full year.

“It’s just a matter of earnings and guidance. Last night’s report was quite disappointing and guidance was cut significantly. From a larger perspective, there is a sense that the opportunity for COVID is declining overall while NVAX also came out of the gate. well behind mRNA products,” Crisafulli told CBS MoneyWatch.