(Reuters) – Novavax said on Tuesday it would reduce its global workforce by 25% as the cash-strapped biotech moves forward with its plan to reduce expenses and navigate sluggish demand for its COVID-19 vaccines.
The company, which previously flagged significant uncertainty about how it will generate revenue for the year, said it expects total annual revenue of between $1.4 billion and $1.6 billion, relying on the timely launch of its updated COVID shot. She hopes
Separately, Novavax said its COVID/flu combination shot was safe and well-tolerated in mid-stage studies, sending the company's shares up 9% before the bell.
Global regulators expect the Covid vaccination campaign to be carried out once a year, similar to the annual flu vaccination.
Novavax's coronavirus vaccine is its only marketed product after 35 years in business, and the company is now hoping that its cost controls and a successful trial for its COVID/flu combination vaccine candidate will help it stay afloat.
For the first quarter, it reported a net loss of $293.9 million, compared to a year-ago profit of $203.4 million.
The layoffs, part of Novavax's ongoing cost-cutting measures, will translate to about 498 jobs out of 1,992 full-time employees as of February 21, according to the company's latest regulatory filing.
The biotech expects the cost-cutting plan to help it reduce its annual research and commercial expenses by 20% to 25% compared to last year. It will record approximately $10 million to $15 million in restructuring charges.
The company had $637 million in cash and equivalents at the end of the quarter, compared to $1.3 billion at December 31.
(Reporting by Bhanvi Satija and Raghav Mahobe in Bengaluru; Editing by Devika Syamanath)