Vaccine manufacturer Novavax will reduce its global workforce by 25%. The company said it aims to "reduce spending and operate more efficiently." CEO John Jacobs explained the decision in his latest earnings report:
We outlined significant measures aimed at reducing spending, extending our cash runway and operating more efficiently (...) Combined with our focus on Nuvaxovid's revenue generation and management of our current liabilities, these measures should strengthen our cash position and our potential for Novavax's long-term growth and stability. Reducing our workforce has been a difficult decision.
The cuts will affect 20% of its full-time employees (1,992 employees). The other 5% includes contractors and consultants. Jacobs said the reduction was "necessary to better align its infrastructure."
The company also plans to reduce next year's research and development costs, as well as selling, general and administrative expenses, by 40% to 50% (compared to 2022).
The company's stock soared after revealing layoffs
Novavax stated that it made significant progress on its "key priorities." The company is developing an updated Covid-19 vaccine that will be available in the fall. In addition to this, it is developing a flu vaccine as well as a Covid-19 and flu combination vaccine.
The company said it received "positive Phase 2 data that we believe supports further development of our Covid vaccine combination-influenza, standalone influenza and high-dose Covid."
After announcing the positive trial and vaccine results, in addition to the reduction of personnel, the biotech company's stock soared. The price went up by 45% half an hour after Wall Street opened. The company made up for lost ground from last year (when it faced sharp declines) after its success during the pandemic.
Due to these developments, Novavax expects to generate around $1.4-1.6 billion in revenue by 2023. These figures are well above analysts' expectations.
