Novavax, Inc. (NASDAQ:NVAX) investors are clearly concerned today after the vaccine maker reported its third-quarter results and announced corporate restructuring plan. Novavax reported revenue of $3.2 million, which was below consensus estimate of $4.2 million. Operating expense was $67 million, which was $27 million higher than a year ago.
Perhaps most importantly, the company will implement an immediate reduction in workforce of approximately 30%. This is expected to reduce cash burn from operation in 2017 by $70-$100 MM compared to 2016.
Novavax shares didn’t react well to the news, tanking nearly 20% to 1.36 in Thursday’s trading session. NVAX has a 1-year high of $9.23 and a 1-year low of $1.16. The stock’s 50-day moving average is $1.92 and its 200-day moving average is $5.72.
“We have identified a clear path forward that we expect will provide us with important clinical data throughout 2017 and protect liquidity,” said Stanley C. Erck, President and CEO. “We have the balance sheet to execute this plan. We have resized our organization consistent with this plan and look forward to reporting data from these programs in 2017. We continue to have great confidence in our platform technology, our RSV F Vaccine and the significant commercial opportunity for an RSV vaccine for infants via maternal immunization.”
On the ratings front, Novavax has been the subject of a number of recent research reports. In a report issued on October 10, FBR analyst Vernon Bernardino reiterated a Buy rating on NVAX, with a price target of $12, which implies an upside of 716% from current levels. Separately, on September 20, Chardan’s Keay Nakae maintained a Hold rating on the stock and has a price target of $1.50.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Vernon Bernardino and Keay Nakae have a yearly average loss of 23% and 28.6% respectively. Bernardino has a success rate of 22% and is ranked #4076 out of 4205 analysts, while Nakae has a success rate of 26% and is ranked #4047.
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 (RSV), seasonal influenza, pandemic influenza, and Ebola virus (EBOV).