As financial uncertainties clouds the biotech sector, Novavax, announced on Tuesday that it will cut its worldwide workforce by 25 per cent. This is another big job cut news in the biotech industry as the sector is still trying to tackle the lukewarm demand for its COVID-19 vaccines.
As per the company’s recent regulatory filings, Novavax’s decision to lay off employees is part of its continued cost-saving initiatives. This move will affect around 498 jobs out of the 1,992 full-time employees it had as of February 21.
In the first quarter, Novavax posted a net loss of $293.9 million, in contrast to a profit of $203.4 million from the previous year. However, the company then expressed significant uncertainty about generating revenue for the year. Currently, the company anticipates total annual revenue of $1.4 billion to $1.6 billion, banking on the timely release of its updated COVID vaccine.
As per the company’s plans, Novavax predicts that its cost-saving strategies will result in a 20 per cent to 25 per cent reduction in its annual research and commercial expenses compared to last year. As of the end of the quarter, the biotech had $637 million in cash and equivalents, which is lower than the $1.3 billion it had on December 31.
After being in business for 35 years, Novavax’s only marketed product is its COVID-19 vaccine. The company is currently relying on its cost-cutting measures and a positive outcome from clinical trials for its COVID/flu combination vaccine candidate to ensure its survival.
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