Novavax’s (NVAX) fourth quarter 2010 net loss per share came in at 6 cents, narrower than the Zacks Consensus Estimate of a loss of 9 cents. The year-ago adjusted loss was 15 cents. The narrower loss at Novavax in the final quarter of 2010 was attributable to the lower operating costs.
Quarterly Results
Novavax, a vaccine developer, does not have any marketed products at present. Revenues declined 32% to $0.05 million in the reported quarter. Novavax generates revenues from research contracts, licenses and agreements to provide vaccines, services and technologies.
Operating expenses at Novavax plummeted 50% to $7.1 million in the final quarter of 2010. The sharp decline was primarily attributable to the lower spend on research and development (R&D). R&D expenses fell to $4.8 million from $11 million a year ago. The decline in R&D expenses is primarily attributable to the lower costs incurred by Novavax on studies related to its H1N1 and seasonal influenza vaccine candidates.
Annual Results
For the full-year 2010, Novavax reported an adjusted loss of 36 cents per share compared to an adjusted loss of 44 cents in 2009. The Zacks Consensus loss estimate was 40 cents.
The narrower annual loss was attributable to reduced professional fees, the receipt of a therapeutic tax credit coupled with lower interest expense resulting from the payment of convertible notes in 2009. The decline was partially mitigated by increased costs related to the employees at Novavax.
Recently, the department of health and human services awarded a flu vaccine contract to Novavax for developing pandemic and seasonal influenza vaccines by utilizing its Virus-Like Particle technology. The contract is worth up to $179 million.
Our Recommendation
Currently, we have a ‘Neutral’ stance on Novavax which is supported by a Zacks# 3 Rank (short-term ‘Hold’ recommendation).
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