For COVID-19 vaccine latecomer Novavax, the company’s hard-won regulatory nods in the U.S. and abroad may have been too little, too late.
Novavax’s second-quarter vaccine sales of just $78 million represented “a significant shortfall from both the first quarter results," and also failed to meet the company's own expectations, CEO Stanley Erck said on a conference call. “We are now projecting that we will have no new revenues in ’22 from the U.S. or from Covax," he said.
All told, Novavax generated $186 million in the second quarter, a far cry from the $704 million it pulled down over the first three months of the year.
Making matters worse, Novavax’s cost of sales, at $271 million, eclipsed revenue earned for the period. Some $255 million of that charge related to “excess, obsolete, or expired inventory and losses on firm purchase commitments under our third-party supply agreements,” Novavax said in a release.
Novavax can take solace in the fact that it's not alone on the inventory write-off front. Fellow pandemic players Moderna and BioNTech each suffered inventory write-offs worth hundreds of millions of dollars during the same period.
As for Novavax, the company added that its unfavorable cost-earnings balance was fueled by a “substantial reduction” of expected deliveries to global vaccine and health authorities, plus “deferral of deliveries to other customers.”
In light of Novavax’s lackluster performance, the company is slashing guidance, too. It expects between $2 billion and $2.3 billion in 2022 sales, down from a previous range of $4 billion to $5 billion.
Launching in the shadow of Pfizer-BioNTech and Moderna’s massively successful mRNA-based prophylactics, Novavax has had to get creative with its marketing angle. The company has pitched its more traditional shot as an added option for kids, vaccine skeptics and others who may have avoided mRNA vaccines.
Still, with millions of people living in America already vaccinated and boosted against COVID-19, Novavax’s shot has struggled to catch on. A total of 7,381 Novavax vaccines have gone into patients’ arms in the U.S., according to the Centers for Disease Control and Prevention. Digging deeper into the numbers, just 2,365 people have been fully vaccinated with two doses of Novavax’s shot.
For comparison, around 128.34 million people in the U.S. have completed a full course of Pfizer and BioNTech’s vaccine Comirnaty, while another 77.47 million people in the U.S. are fully immunized with Moderna’s Spikevax, the CDC says.
Pfizer and Moderna’s mRNA dominance is reflected in the companies’ COVID vaccine sales, too. Pfizer’s BioNTech-partnered vaccine generated $8.8 billion in the second quarter, while Moderna’s Spikevax reaped about $4.5 billion.
Even still, two-and-a-half years into the pandemic, a global downturn in demand for vaccines has put the squeeze on COVID juggernauts, as well as smaller companies like Novavax.
Earlier this month, Moderna reported that it had logged more than $800 million in charges for the second quarter, thanks to unused vaccine inventory, changes in prior purchase agreements and excess manufacturing capacity.
The charges were "driven by a substantial reduction of our expected deliveries to COVAX and deferral of deliveries to other customers, particularly to the European Union,” Moderna said in a recent earnings announcement.
BioNTech, too, is feeling the sting, as the company on Monday reported revenue of 3.2 billion euros ($3.3 billion), about 40% down versus the same period in 2021 and a nearly 50% drop from the company’s haul in Q1 2022.
“The development of the pandemic has been and remains dynamic, causing a rephasing of orders, with this leading to fluctuations in quarterly revenue,” chief financial officer Jens Holstein told investors on an earnings call.