Novavax will be laying off approximately 25% of its workforce, according to a May 9 company earnings announcement.
Although Novavax had previously made significant strides in reducing spending—cutting expenses by $50 million without laying off staff—the measures were not enough to keep pace with the effects of the COVID global health emergency.
“Reducing our workforce has been a difficult decision, but we believe it was necessary to better align our infrastructure and scale to the endemic COVID opportunity," CEO John Jacobs said in a prepared statement.
The company’s total revenue attributed to COVID vaccines saw a significant slide in this year's first quarter, dropping from $704 million in the same period in 2022 to $81 million in 2023.
Novavax also is taking a financial hit from increases in the cost of sales; this time last year, the company’s cost of sales for the quarter tallied $15 million, but it has since increased to $34 million. This uptick is due to “excess, obsolete, or expired inventory and losses on firm purchase commitments,” according to the report.
General expenses for the first quarter of 2023 also increased by around $17 million. In contrast, research and development costs saw a substantial decrease, down from $383 million in 2022 to $247 million currently.
In line with that figure, the report indicates that employees who are most likely to be affected by the staffing downsize work in research and development.
All factors combined led to a net loss of $294 million in the first quarter, compared to a net income of $203 million during the same time period in 2022.
Despite the losses, Novavax shared that it has made headway on several of its near-term priorities, including its plans to deliver an updated COVID vaccine.
"Though we still have substantial challenges ahead of us in 2023, we are encouraged by the progress we have made in the last quarter and are determined to continue executing on our top priorities,” Jacobs said.