Novavax (NVAX) shares surged approximately 15.6% in afternoon trading Wednesday after the vaccine developer reported first-quarter revenue that significantly exceeded Wall Street expectations. The gains were fueled by a $30 million payment from Pfizer and other licensing revenue, which helped offset a sharp decline in COVID-19 vaccine product sales.
The Gaithersburg, Maryland-based company posted total revenue of $139.5 million for the quarter ended March 31, well above the $78.3 million consensus estimate compiled by LSEG. However, the company swung to a net loss of $9.5 million, or 6 cents per share, compared to a profit of $518.6 million, or $2.93 per diluted share, in the same period last year. Product sales plummeted to $42.2 million from $621.7 million a year ago.
The standout contributor was a $30 million payment from Pfizer under a January licensing agreement that grants Pfizer a non-exclusive license to Novavax's Matrix-M adjuvant for up to two infectious disease vaccine indications. The deal could deliver up to $500 million in additional milestone payments and tiered royalties if any vaccines reach the market. Overall, licensing, royalty, and other revenue more than doubled to $97.3 million.
CEO John Jacobs highlighted strong market interest in Matrix-M, noting on an analyst call that the company has signed four additional material transfer agreements with major pharmaceutical and biotech firms this year. Novavax's partners are now evaluating Matrix-M across more than 30 indications, including infectious diseases such as cytomegalovirus, Epstein-Barr virus, pneumococcal disease, and respiratory syncytial virus, as well as cancers like colorectal, head and neck, and pancreatic.
Novavax reaffirmed its 2026 adjusted total revenue forecast of $230 million to $270 million, excluding Sanofi-related supply sales, royalties, and milestones. The company is counting on Sanofi's development of Nuvaxovid and their joint COVID-flu combo vaccine programs to achieve profitability by 2028. Last month, Sanofi reported that Nuvaxovid, a protein-based COVID shot, produced fewer systemic side effects like fever and fatigue compared to Moderna's mRNA vaccine in a Phase 4 head-to-head trial.
Despite the positive quarterly results, Novavax faces significant challenges. The company's revenue outlook depends on achieving partner milestones, collecting royalties, and navigating regulatory approvals. If plans change, Novavax may need to seek additional funding, strike new deals, or sell assets. Product sales remain uncertain as the company shifts its focus to licensing and partnerships.
This quarter provides evidence that Novavax can generate cash through its partner-led strategy, even as demand for its COVID vaccine wanes. The key question is whether Pfizer, Sanofi, and other partners can advance programs quickly enough to replace lost revenue and sustain the company's growth trajectory.
