Novavax loss grew in 4th quarter

Company lowers revenue for previous 3 quarters

March 20, 2003|By Julie Bell | Julie Bell,SUN STAFF

Novavax Inc. said yesterday that its fourth-quarter loss widened by more than a third, to $4.3 million, as sales of its prenatal vitamins fell in the face of competition.

The Columbia-based company said it also was revising revenue downward by $800,000 for the prior three quarters combined.

Novavax acted after deciding its accounting method for four vaccine-research contracts over the year's first nine months did not accurately estimate how close they were to completion, causing revenue to be booked too soon, Chief Financial Officer Dennis Genge said.

The company plans to detail the restatements in its annual report to the Securities and Exchange Commission, which has yet to be filed.

Genge said that report will show the company's loss over the first three quarters combined was 3 cents a share more than initially reported.

For the year, including the restatement, Novavax lost $22.7 million, or 93 cents a share, on revenue of $15 million. That compares with a loss of $9.7 million, or 43 cents a share, on revenue of $24 million in 2001.

"It's not a concern because it's a relatively immaterial event," C.E. Unterberg Towbin analyst Kenneth Trbovich said of the restatement, noting that the company has since changed its accounting method. "This problem should not occur again."

In the quarter, Novavax lost 18 cents a share as product sales dropped to $2 million from $4.9 million in the corresponding quarter a year ago. It lost $3.2 million, or 14 cents a share, in the corresponding period in 2001.

Revenue was $2.5 million, down from $6.1 million a year ago.

Novavax Chief Executive Officer Mitchell J. Kelly told analysts during a conference call that the company expects the Food and Drug Administration to issue an "approvable" letter for Novavax's Estrasorb estrogen-replacement lotion no later than July 12.

An FDA "approvable" letter is one in which the agency indicates it will approve a drug if certain concerns are addressed.

Shares of Novavax gained a penny to close at $4.27 yesterday on the Nasdaq stock market.

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