Novavax (NVAX) Q2 2023 earnings report

Shares of Novavax Soared as much as 20% in premarket trading on Tuesday after the Covid vaccine maker reported surprise second-quarter earnings.

The results come as Novavax is working to strengthen its financial position, especially after the company expressed doubts about its ability to stay in business earlier this year. The company is pinning its hopes on the fall launch of its updated Covid vaccine, a global cost-cutting effort launched in May and a promising vaccine pipeline that will help it stay afloat.

This is Novavax reported compared to Wall Street expectations, based on a Refinitiv analyst poll.

• Earnings per share: 58 cents a share, versus an expected loss of $1.39 a share
• Revenue: $424.43 million versus $239.2 million expected

Novavax reported net income of $58 million, or 58 cents a share, for the quarter. This compares to a reported net loss of $510.5 million, or $6.53 per share, in the year-ago quarter.

The biotech company generated revenue of $424.4 million in the second quarter, up from $185.9 million in the same period last year.

Novavax CEO John Jacobs told CNBC that the company brought forward some revenue that “may have migrated into the third quarter” due to previous Covid vaccine purchase deals, and booked those revenue in the second quarter instead.

He noted that there will be “little to no sales” in the third quarter as the Food and Drug Administration won’t make a decision on Novavax’s new Covid vaccine until late September. The company can only begin the public rollout of the vaccine after possible regulatory approval.

According to Jacobs, the majority of Novavax’s third-quarter revenue will come from grants. He said the company would limit “most of the seasonal opportunity” of its new vaccine to the fourth quarter, when the country would normally see the peak of Covid cases and vaccinations.

The company lowered its full-year revenue guidance to $1.3 billion to $1.5 billion, down slightly from the $1.4 billion to $1.6 billion guidance it provided in May.

However, Jacobs pointed out that the adjustment reflects part of a cash settlement that the Canadian government was willing to pay for the loss of Covid vaccine doses that were previously scheduled to be delivered.

The new guidance doesn’t include the $100 million in cash Canada paid in the second quarter — an amount that “would have been revenue” if the parties had completed the transaction, he said.

“We’re still on track to generate the revenue, but we’d rather have it in cash,” Jacobs told CNBC. “That’s a good thing for Novavax.”

Novavax also said it is continuing to implement its global cost reduction plan, which includes cutting 25% of the company’s workforce and consolidating the company’s facilities and infrastructure.

The plan is expected to reduce research and development expenses and selling, general and administrative expenses by approximately 40% to 50% in 2024 compared to 2022. SG&A expenses typically include the costs of advertising, selling, and providing a company’s products and services.

The company reported research and development expenses of $258 million and SG&A expenses of $162 million last year.

Novavax will host a conference call with investors at 8:30 a.m. ET.