- Novavax shares sank 25% after it said it has "substantial doubt" about its ability to stay in business.
- The biotech plans spending cuts after it fourth-quarter loss was twice as deep as analysts expected.
Novavax shares sank as much as 25% after the COVID-19 vaccine maker warned it has "substantial doubt" about its ability to stay in business through next year and it plans cuts to its spending.
The stock was trading 24.6% lower at $6.96 on Wednesday, in the wake of the company's fourth-quarter earnings report on Tuesday.
The biotech said that while its cash-flow forecast showed it has enough capital to fund its operations, that forecast was subject to "significant uncertainty" around its 2023 revenue, US government funding and unresolved arbitration proceedings with the global vaccine alliance Gavi.
"Given these uncertainties, substantial doubt exists regarding our ability to continue as a going concern through one year from the date that these financial statements are issued," Novavax said in a statement Tuesday.
The warning came as the Maryland-based company reported a fourth-quarter earning loss that was nearly twice as bad as some analysts had predicted.
Novavax lost $182 million, or $2.28 per share, in the fourth quarter of 2022, compared with analyst expectations for a a loss of $1.15 loss per share, per Bloomberg. It ended the quarter with reported sales of $357 million, missing analyst expectations for $380 million.
The stock has fallen 89% over the past year, as of Tuesday's close.
The biotech's vaccine deal with the US government has not been extended beyond the end of 2023, which means it can't count on the remaining $416 million under the deal, Reuters reported.
The company said it plans to focus on delivering an updated COVID-19 vaccine for the fall of 2023, as required by regulators to adapt to new strains of the coronavirus. It will also reduce spending as a priority, but did not provide any detail on the cuts, including whether they would involve staff losses.