Novavax aims to rebound with restructuring, more trials
- Clinical-stage Novavax tried to alleviate investor unrest by announcing plans to slash costs, restructure and send its lead candidate into another study after failing a Phase 3 trial in September.
- The Rockville, MD-based biotech saw its stock dive more than 85% two months ago, after its treatment for respiratory syncytial virus (RSV), an airway infection that can lead to bronchiolitis and pneumonia, didn't meet primary or secondary endpoints in a study of nearly 12,000 older adults.
- A Phase 2 rollover trial following that failure showed the drug may be more effective with sequential dosing. As such, Novavax plans to conduct another Phase 2 trial in the first quarter of 2017 that will assess how multiple doses affect the medication's performance in older adults. The company expects topline data for the trial in the third quarter of next year.
Novavax is leaning hard on a three-pronged strategy to get out of the hole it has recently been in.
Firstly, the company introduced a restructuring plan that it believes will mark down 2017 expenses by $70 million to $100 million. The plan includes cutting 30% of its workforce. As of Sept. 30, Novavax had around 540 general, administrative, and research and development employees, according to a quarterly filing with the Securities and Exchange Commission.
Novavax is also working to expand its nanoparticle vaccine portfolio. As part of that work, it is planning to push a drug for the treatment of Zika virus into clinical trials sometime in the first half of 2017.
Getting its lead RSV candidate to market is another top priority. The drug is currently being tested across three populations: adults aged 60 and older, children aged six months to five years, and infants (through maternal immunization). Those studies span all three phases of clinical development.
Novavax reported a loss of $66.3 million for the third quarter, more than double what it was during the same period last year. Revenues of $3.2 million were less than half what they were in 2015, while general and administrative and R&D expenses increased 50% and 75%, respectively, to $13.6 million and $53 million.
While Novavax touted more than $300 million in cash and cash equivalents and continued funding from the Bill and Melinda Gates Foundation, its announcement didn't seem to restore much confidence among investors. Shares traded at $1.34 on Monday morning, down about 21% since the initial announcement last week.
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