Novavax Q3 Earnings & Sales Beat, Stock Falls 6% on '24 View Cut

Novavax NVAX incurred a third-quarter 2024 loss of 76 cents per share, narrower than the Zacks Consensus Estimate of a loss of 87 cents. In the year-ago quarter, the company reported a loss of $1.26 per share.Revenues in the quarter amounted to $85 million, which beat the Zacks Consensus Estimate of $57 million. However, the top line declined 55% on a year-over-year basis.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.More on NVAX’s EarningsNovavax recorded $38.2 million in product sales compared with $2.2 million in the year-ago quarter. This upside was primarily driven by sales of the company’s protein-based COVID-19 vaccine, also the company’s sole marketed product, in the United States.While the reported figure beat our model estimates of $23 million, it missed the Zacks Consensus Estimate of $49 million.Licensing, royalties and other revenues rose 133% year over year to $46.3 million in the quarter, driven by a combination of activities as part of the recently signed agreement with pharma giant Sanofi SNY for its protein-based COVID-19 vaccine and adjuvant sales.Starting next year, Sanofi will market the company’s COVID-19 vaccine and also use it to develop novel COVID-19-influenza combination vaccines. As part of this deal, the company received a payment of $570 million from SNY, which includes $70 million in equity investment. NVAX is also eligible to receive milestone payments of up to $700 million and royalties on sales of the COVID-19 vaccine from Sanofi.Management did not record grant revenues during the quarter. The company reported about $165 million in grant revenues in the year-ago period.NVAX’s Costs & Cash BalanceIn the reported quarter, research and development (R&D) expenses totaled $87 million, down 18% year over year. The downside was caused by a reduction in clinical and manufacturing spending during the quarter.Selling, general and administrative (SG&A) expenses were down 34% year over year to $71 million, primarily due to management's restructuring activities to reduce costs.As of Sept. 30, 2024, the company had $924 million of cash and cash equivalents compared with $1.1 billion as of June 30, 2024.NVAX’s GuidanceFor 2024Novavax expects 2024 total revenues to be in the range of $650-$700 million, down from its previously issued guidance of $700-$800 million. This was likely due to lower COVID-19 vaccine uptake in ex-U.S. markets.This revised guidance includes nearly $475 million in licensing, royalties and other revenues. This includes $450 million of revenue recognition associated with the $500 million upfront payment from the Sanofi agreement and the rest in royalty and other revenues from partner-related activities.It expects full-year product revenue guidance of $175-$225 million, down from the earlier projection of $275-$375 million.Post the earnings release, Novavax’s share price fell 6% on Tuesday likely due to the curtailed guidance. Year to date, the stock has surged 76.2% against the industry’s 0.9% decline.Image Source: Zacks Investment ResearchThe company has maintained its projection for full-year combined R&D and SG&A expenses in the band of $700-$750 million.Beyond 2024Management has maintained its guidance on combined R&D and SG&A expenses for full-year 2025 and 2026. It expects the combined expenses to be nearly $500 million for 2025 and around $350 million for 2026. It also anticipates a portion of the costs of both these years to be reimbursed by Sanofi.Updates on NVAX’s Pipeline & Other NewsOn Monday, Novavax announced that the FDA has lifted the clinical hold on its two pipeline programs, COVID-19-Influenza Combination (CIC) and stand-alone influenza vaccine candidates. The agency had initially placed this hold in September after a study participant who took the CIC shot as part of a phase II study reported nerve damage. With this hold removed, management is working with study investigators and other partners to start the phase III immunogenicity study on both vaccines as quickly as possible.Novavax is on track to complete the database lock of a pediatric clinical study on its COVID-19 vaccine before the end of this year. Achieving this target will trigger a $50-million milestone payment from Sanofi.A regulatory filing is currently under the FDA’s review seeking full approval for the COVID-19 vaccine, with a final decision expected next year in April. If this filing is approved, it will trigger a $175-million milestone payment from Sanofi.Novavax is also focused on advancing its pre-clinical programs on pandemic influenza and RSV through investigational new drug (IND) filings. Management intends to focus on exploring RSV-combination options.Management also signed a deal with an unnamed ‘leading pharmaceutical company’ to use its patented Matrix-M adjuvant with the latter’s pipeline candidates.NVAX’s Zacks RankNovavax currently carries a Zacks Rank #2 (Buy).Novavax, Inc. Price Novavax, Inc. price | Novavax, Inc. QuoteOther Key Picks Among Biotech StocksSome other top-ranked stocks from the sector are Castle Biosciences CSTL and Biogen BIIB. While CSTL currently sports a Zacks Rank #1 (Strong Buy), BIIB carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.In the past 60 days, estimates for Castle Biosciences’ 2024 loss per share have narrowed from 58 cents to 8 cents. During the same timeframe, loss per share estimates for 2025 have narrowed from $2.13 to $1.88. Year to date, shares of Castle Biosciences have surged 56.5%.CSTL’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 172.72%.In the past 60 days, estimates for Biogen’s 2024 EPS have increased from $16.12 to $16.38. EPS estimates for 2025 have improved from $17.09 to $17.16. Year to date, shares of Biogen have lost 33.5%.Biogen’s earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 9.99%.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sanofi (SNY): Free Stock Analysis Report Biogen Inc. (BIIB): Free Stock Analysis Report Novavax, Inc. (NVAX): Free Stock Analysis Report Castle Biosciences, Inc. 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