The Q1 results for Novavax (NVAX) proves that burning cash is an art. The small biotech managed to ramp up the cash burn rate and as a surprise to no one paying attention rushed out a capital raise during April. Despite promising vaccines, the coast is not clear to not clear to own the small biotech stock.
Source: Novavax website
Cash Burn Hurts
One needs to look no further than the diluted share count to see how the hefty cash burn hurts the stock. Novavax reported an average share count of 337 million shares at the end of Q1, up from 274 million last Q1. The below chart shows the dramatic increase in the share count over the last 10 years despite the company having no approved vaccines to show for this dilution.
