What happened

Shares of Novavax (NVAX -4.32%) are crashing 25.2% lower as of 10:45 a.m. ET on Wednesday. The steep decline came after the company provided its 2022 full-year and fourth-quarter updates after the market close on Tuesday.

Novavax announced fourth-quarter revenue of $357 million, up 61% year over year. It posted a net loss in Q4 of $182 million, or $2.28 per share. This result was much worse than the consensus estimate of a net loss of $0.92 per share.

However, this earnings miss wasn't the biggest worry for investors. Novavax stated that "substantial doubt exists regarding our ability to continue as a going concern" over the next year.

So what

When a company raises the possibility that it won't be able to continue operations, investors should be worried. Novavax's current cash flow projections indicate that it will be able to fund operations throughout the next year. But the company acknowledged that there's "significant uncertainty" about its revenue forecast.

One major headwind for Novavax is that the U.S. government plans to transition to a private market for COVID-19 vaccines. This would mean Novavax competing directly against Pfizer and Moderna to sell its Nuvaxovid vaccines to healthcare providers. 

Now what

Novavax's new CEO, John C. Jacobs, laid out three top priorities for the company. First, Novavax must have an updated vaccine ready for the 2023 vaccination season. Second, it must reduce spending and stretch out its cash flow. Third, the company needs to expand its product lineup beyond Nuvaxovid.

The first two are most important to keep operations going beyond this year. However, the third is critical for the company's long-term survival. Can this vaccine stock recover? It's possible, but it won't be easy.