MD-Based Novavax To Lay Off 25% Of Workforce

GAITHERSBURG, MD — Gaithersburg-based Novavax Inc., a biotechnology company that creates vaccines for serious infectious diseases including COVID-19, announced Tuesday it plans to layoff a quarter of its workforce to cut costs.

In a statement on the company's website, Novavax officials announced a global restructuring and cost reduction initiative that includes cutting 25 percent of its workforce and consolidating facilities.

The company did not specify the number of employees the cut would affect.

"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," John Jacobs, president and CEO of Novavax, said in a statement. "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."

The announcement by the cash-strapped company caused its shares to jump 40 percent, according to a Reuters report.

Novavax developed a COVID-19 vaccine during the pandemic, its first marketed product in the company's 35-year history, Reuters reported. The vaccine's rollout, however, was plagued with problems and regulatory snags.

The company raised doubts in February about its ability to remain in business, citing uncertainty about its 2023 revenue, funding from the U.S. government, and pending litigation with global vaccine alliance Gavi, according to a separate Reuters report.

The company's total revenue for the first quarter of 2023 was $81 million, compared to $704 million in the same period in 2022, according to the company's statement.

Despite the drop in revenue, the drugmaker announced promising early data on its combination COVID-influenza vaccine, as well as its standalone influenza and high-dose COVID-19 vaccines.

"All three vaccine candidates were well-tolerated, demonstrated a reassuring preliminary safety profile, and had reactogenicity comparable to authorized comparators," the statement read.

In the statement released Tuesday, Novavax officials said they plan to focus on developing an updated COVID vaccine by fall to match public health recommendations.