Novavax said it will eliminate approximately 30% of its workforce in a restructuring that follows the failure of its respiratory syncytial virus (RSV) F-protein recombinant nanoparticle vaccine candidate in a Phase III trial.
The RSV F vaccine missed its primary and secondary efficacy endpoints in the Phase III Resolve trial, the company acknowledged in September.
The company’s announcement yesterday did not disclose exactly how many jobs it will axe under its restructuring. Novavax reported a workforce of 443 as of February 24, according to its Form 10-K Annual Report for 2015, filed in March.
Novavax did say, however, that it expected to incur one-time restructuring costs of approximately $3 million to $4 million, including severance expenses, in the fourth quarter related to the job cuts. In addition, management has begun carrying out cost-cutting measures relating to precommercialization activities, capital equipment investments, project-specific and general R&D, and general and administrative expenses, the company added.
Novavax said its restructuring was aimed at prioritizing development activities set to release clinical data during 2017, as well as maintaining “core” competencies and cutting its cash “burn” or rate of spending. The company projected a reduced cash burn of $70 million to $100 million next year.
“We have identified a clear path forward that we expect will provide us with important clinical data throughout 2017 and protect liquidity,” Novavax President and CEO Stanley C. Erck said in a statement. “We continue to have great confidence in our platform technology, our RSV F vaccine, and the significant commercial opportunity for an RSV vaccine for infants via maternal immunization.”
To that end, Erck added, Novavax will continue to conduct the Phase III Prepare™ trial, designed to determine the efficacy of maternal immunization with the company’s RSV F vaccine against symptomatic RSV lower respiratory tract infection with hypoxemia in infants through a minimum of the first 90 days of life. The Prepare trial is supported through an up-to-$89 million grant from the Bill & Melinda Gates Foundation.
Erck said Novavax would also launch a Phase II trial of its RSV F vaccine in older adults (60 years of age and older), in one- and two-dose formulations, both with and without adjuvants. The randomized, observer-blinded, multiarm, dose-ranging study is designed to assess the safety and immunogenicity of these formulations in older adults as measured by serum microneutralization titers against RSV/A and RSV/B, palivizumab competing antibodies (PCA), and anti-F immunogblobulin G (IgG).
The company said it also plans to begin a Phase I study of its Zika virus envelope dimer nanoparticle vaccine candidate (ZIKV EnvD vaccine) in 2017.
Novavax timed the disclosure of its restructuring in conjunction with its Investor and Analyst Day, during which it also reported third-quarter results.
The company finished the 3 months ending September 30 with a net loss of $66.3 million, compared to a net loss of $33.1 million in Q3 2015. The company’s revenue dropped by half during the third quarter, to $3.2 million from $6.5 million a year earlier. Novavax cited lower revenue under its contract with the U.S. Biomedical Advanced Research and Development Authority (BARDA) of $6.2 million, reflecting reduced activity due to the contract’s expiration, partially offset by $2.6 million in revenue recorded under the Gates Foundation grant related to the Prepare clinical trial.