Novavax, Inc. (NASDAQ:NVAX) announced its financial results for the fourth quarter and twelve months ended December 31, 2016.

Recent and Fourth Quarter Achievements:

  • Continued execution of the global Phase 3 Prepare(TM) clinical trial to prevent RSV in infants via maternal immunization. Prepare is a randomized, observer-blinded, placebo-controlled trial, conducted at multiple international sites. The primary objective is to determine the efficacy of maternal immunization with our RSV F Vaccine against symptomatic RSV lower respiratory tract infection with hypoxemia in infants through a minimum of the first 90 days of life. Prepare is supported by a grant of up to $89 million from the Bill & Melinda Gates Foundation (BMGF); and
  • Initiation of a randomized, observer-blinded, multi-arm, dose-ranging Phase 2 clinical trial, in one and two dose formulations, both with and without adjuvants, of the RSV F Vaccine in older adults (60 years of age and older). The trial will evaluate safety and immunogenicity of these formulations in older adults as measured by serum microneutralization titers against RSV/A and RSV/B, palivizumab competing antibodies (PCA) and anti-F IgG.

Summary

“We`ve made significant progress executing on the path forward that we outlined in late 2016,” said Stanley C. Erck, President and CEO. “For the remainder of the year we will focus on the ongoing Phase 3 trial of our RSV F Vaccine for infants via maternal immunization and on understanding the results of our Phase 2 immunogenicity trial in older adults, along with a deeper understanding of the Resolve Phase 3 trial results we reported last September. We also plan on moving our Zika and nanoparticle influenza vaccine programs into the clinic later this year.”

Financial Results for the Three and Twelve Months Ended December 31, 2016

Novavax reported a net loss of $57.1 million, or $0.21 per share, for the fourth quarter of 2016, compared to a net loss of $78.8 million, or $0.29 per share, for the fourth quarter of 2015. For the twelve months ended December 31, 2016, the net loss was $280.0 million, or $1.03 per share, compared to a net loss of $156.9 million, or $0.60 per share, for the same period in 2015.

Novavax revenue in the fourth quarter of 2016 decreased 8% to $5.4 million, compared to $5.9 million for the same period in 2015. Revenue for the full year 2016 decreased 58% to $15.4 million, compared to $36.3 million in 2015.  The decrease in revenue under the HHS BARDA contract in 2016 of approximately $31 million relative to 2015 accounts for the decrease. The lower HHS BARDA revenue is the result of a lower level of activity, primarily resulting from the natural expiration of the BARDA contract, as compared to the same period in 2015. This decrease in HHS BARDA revenue was partially offset by an increase of $9.4 million in revenue in 2016 recorded under the BMGF grant relating to our ongoing Prepare clinical trial.

Research and development expenses decreased 33% to $51.1 million in the fourth quarter of 2016, compared to $75.9 million for the same period in 2015. For the full year 2016, research and development expenses increased 46% to $237.9 million, compared to $162.6 million in 2015.  The increase in research and development expenses for the full year 2016 was primarily due to increased costs associated with the clinical trials and development activities of our RSV F Vaccine and higher employee-related costs, including non-cash stock-based compensation.

General and administrative expenses decreased 6% to $8.3 million in the fourth quarter of 2016, compared to $8.9 million for the same period in 2015. For the full year 2016, general and administrative expenses increased 51% to $46.5 million, compared to $30.8 million in 2015.  The increase was primarily due to higher employee-related costs and professional fees for pre-commercialization activities as compared to the same period in 2015.

Interest income (expense), net for the fourth quarter and full year 2016 includes $3.4 million and $12.5 million, respectively, of interest expense relating the Company`s Convertible Senior Notes offering in the first quarter of 2016.

As of December 30, 2016, the company had $235.5 million in cash and cash equivalents and marketable securities compared to $230.7 million as of December 31, 2015. Net cash used in operating activities for the full year 2016 was $255.5 million, compared to $126.1 million for same period in 2015. The increase in cash usage was primarily due to increased costs relating to our RSV F Vaccine and higher employee-related costs.

Shares of Novavax are falling nearly 9% to $1.48 in after-hours trading Monday. NVAX has a 1-year high of $8.49 and a 1-year low of $1.16. The stock’s 50-day moving average is $1.38 and its 200-day moving average is $2.55.

On the ratings front, NVAX has been the subject of a number of recent research reports. In a report issued on January 19, Cantor analyst William Tanner reiterated a Hold rating on the stock, with a price target of $2.00, which implies an upside of 42% from current levels. On January 18, FBR’s Vernon Bernardino reiterated a Buy rating on the stock and has a price target of $12.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, William Tanner and Vernon Bernardino have a yearly average return of 4.7% and a loss of -17.3% respectively. Tanner has a success rate of 52% and is ranked #1470 out of 4501 analysts, while Bernardino has a success rate of 23% and is ranked #4429.

Novavax, Inc. operates as a clinical-stage biopharmaceutical company, which engages in the provision of development of recombinant nanoparticle vaccines and adjuvants. Its product pipeline targets infectious diseases with vaccine candidates in clinical development for respiratory syncytial virus, seasonal influenza, pandemic influenza, and Ebola virus.