(Reuters) -Novavax Inc said it will cut 25% of its workforce and unveiled promising data for its COVID-flu combination shot, spurring hopes of a recovery for the cash-strapped biotech and sending its shares about 30% higher in early trade.
The company also released its 2023 revenue forecast on Tuesday, months after raising doubts about its ability to remain in business, and announced about $800 million in conditional ex-U.S. purchase contracts for its COVID shot for the year.
It now expects 2023 revenue between $1.4 billion and $1.6 billion, compared with expectations of $831.6 million, according to five analysts polled by Refinitiv.
Novavax, whose coronavirus vaccine is its lone marketed product after 35 years in business, is now banking on its cost-control measures and a successful trial for its COVID/flu combination vaccine candidate to help it stay afloat.
Data from a mid-stage trial in adults aged 50 to 80 years showed that the combination shot produced an immune response comparable to its protein-based COVID vaccine and already approved influenza shots.
The new data comes at a time when global regulators expect COVID vaccination campaigns to be conducted annually like flu inoculations.
Novavax said the mid-stage data supports further development of its COVID/flu vaccine and a standalone flu shot, for which it will seek potential partnerships.
The layoffs, part of its ongoing cost-reduction measures, would impact about 20% of the 1,959 full-time employees it had as of April 18, or about 392 jobs. The remaining 5% would consist of contractual employees.
The biotech expects the cost cuts to reduce its annual research and commercial expenses by 20% to 25% from last year.
Its cash and equivalents fell to $637 million at quarter-end from $1.3 billion as of Dec. 31.
Novavax also posted a first-quarter net loss of $3.41 per share, compared with estimates of $3.46.
(Reporting by Bhanvi Satija and Raghav Mahobe in Bengaluru; Editing by Devika Syamnath)