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Novavax cuts works force by a third in struggle to restructure

pharmafile | November 10, 2016 | News story | Business Services, Manufacturing and Production, Medical Communications, Research and Development, Sales and Marketing Cost cutting, Jobs, Novavax, losses 

Novavax released the news that it would cut away 30% of its workforce alongside third quarter results that revenues were halves. This drop in revenue resulted in a quarterly loss of $66.3 million.

The restructuring will incur a $3 million to $4 million expense, with job losses being effective immediately.  Alongside cutting away jobs, the company plans wider cost-cutting that will see cut backs on research and development, pre-commercialisation activities, capital equipment investments, project specific and general expenses.

Novavax projects that this will see a reduction in cash burn of $70 million to $100 million in 2017, relative to 2016. The company has already seen a drop in value of shares by 80% in this year alone.

Novavax are still struggling to recover after its failed Phase III trial on 15 September. The trial was a treatment for RSV, a respiratory virus that infects the lungs and breathing passages. The drug failed to perform as expected, with the drug failing to show prevention or a reduction in the incidence in other respiratory diseases due to RSV. The drug was one of their lead candidates and their latest stage trial.

The company is still developing the vaccine to treat RSV in older adults and is conducting Phase II trials to re-examine the vaccine.

“We have identified a clear path forward that we expect will provide us with important clinical data throughout 2017 and protect liquidity,” said chief executive Stanley Erck. “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.”

Ben Hargreaves

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