By Michael Erman
(Reuters) -COVID-19 vaccine maker Novavax (NASDAQ:NVAX) on Wednesday said it still faces significant financial difficulties and expects revenue this year to be flat or lower as it works to pick up U.S. market share from its much larger rivals, Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA).
The company posted a larger-than-expected fourth-quarter loss as revenue lagged analysts' estimates, sending its shares down 26.3% to $4.44 in early trading.
Chief Executive John Jacobs said Novavax claimed just a low-single-digit percentage market share in the U.S. during the most recent vaccination campaign, as demand for COVID vaccines was smaller than hoped and the company got its protein-based shot to market later than its messenger RNA-based rivals. U.S. sales for the 2023-2024 vaccination season are expected to total less than $25 million.
"We were disappointed with that U.S. performance," Jacobs said in an interview.
He said the company's sales force was not targeted enough toward retail pharmacy chains, and that its five-dose vials were not as convenient for use as rivals' prefilled syringes.
"Our intention this year is to be much more competitive. Prefilled syringes are our target in the U.S. market," the CEO said, adding that there will also be a focus on "much more broad retail availability and much better contracts."
The company posted a fourth-quarter loss of $1.44 a share on revenue of $291 million. Analysts, on average, had expected a loss of 45 cents and revenue of about $322 million, according to LSEG data.
Novavax said it expects 2024 revenue to be in the range of $800 million to $1 billion, compared with $984 million in 2023. The Maryland-based company cut its first-quarter revenue forecast to $100 million from its previous view of $300 million.
Jacobs said the company does not anticipate profitability this year, and will continue to drive down costs. It expects research and development and selling, general and administrative expenses to drop to between $700 to $800 million from over $1.2 billion in 2023.
Novavax raised doubts about its ability to remain in business last year, after its market value surged to over $20 billion early in the pandemic as it worked to develop its shot. The company was plagued by manufacturing snags and regulatory delays and was unable to get its shot to market in a timely manner.
As a result, Novavax shares have since lost over 98% of their value, resulting in a market capitalization of less than $600 million.
Last week, the company agreed to pay back international vaccine group Gavi at least $475 million in cash or vaccines by the end of 2028, settling a dispute that had created significant financial uncertainty.
Still, the company's warning about its ability to remain in business remains in place. "Should we have a successful year and we execute to our base plan, I think we'd be in a position where we start contemplating the lifting of that," Jacobs said.
"We've gotten better, faster, more lean and now we need to really prove out that execution in the commercial market."