Novavax shares plunge on weak demand for its COVID-19 vaccine

Shares of COVID-19 vaccine maker Novavax cratered Tuesday as the U.S. biotech company slashed its sales forecast due to a slump in demand for its shots. The company's stock dived 31% after it cut its 2022 sales outlook in half. 

Novavax's protein-based vaccine was a latecomer to the market. It was authorized by the Food and Drug Administration for use by adults in the U.S. only last month, long after a majority of adults had already been vaccinated with Pfizer, Moderna or Johnson & Johnson shots. Only 7,381 Novavax vaccine doses have been administered in the U.S., government data shows. 

The company alluded to softening demand for the COVID-19 vaccine in its earnings call Monday. Novavax CEO Stanley Erck said that hurdles in getting approval to administer booster shots and first doses to younger Americans have also hurt sales, as these applications are the company's best bet for finding a market. 

The Novavax COVID-19 vaccine has not been authorized by the FDA for use as a booster vaccination.

"Receiving booster and adolescent label expansions globally has taken longer than expected, and expanding our label is our core commercial priority. When coupled with global oversupply, this drove a shift in demand for our vaccine from the second quarter into the second half of the year and into 2023," Erck said in the call.  

Novavax does not expect any additional revenue through Covax, an international alliance aimed at ensuring vaccine equity by delivering doses to low- and middle-income countries. The company had expected to sell 350 millions shots through the partnership.

Wall Street analyst Adam Crisafulli of Vital Knowledge highlighted Novavax's earnings miss. Revenue for the second quarter came in at $186 million, versus Wall Street forecasts of $975 million. 

Novavax slashed its full-year earnings guidance to $2 billion to $2.3 billion, from a previous estimate of $4 billion to $5 billion.

"It's just an issue of earnings and guidance. The report last night was pretty disappointing and the guidance was slashed significantly. From a bigger-picture perspective, there's a sense that the COVID opportunity is diminishing overall while Novavax just came out of the gate too far behind the mRNA products," Crisafulli told CBS MoneyWatch.