[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited financial statements, management's analysis, and key risk disclosures for the period [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The company reported significant H1 2025 net income driven by APA terminations, leading to a positive shift in stockholders' equity [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) | Financial Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $239,240 | $415,484 | $905,895 | $509,339 | | **Total Expenses** | $138,170 | $254,486 | $289,311 | $493,172 | | **Income from Operations** | $101,070 | $160,998 | $616,584 | $16,167 | | **Net Income** | $106,508 | $162,381 | $625,154 | $14,831 | | **Diluted EPS** | $0.62 | $0.99 | $3.55 | $0.10 | - Net income for the first six months of 2025 surged to **$625.2 million**, a substantial increase from **$14.8 million** in the same period of 2024, primarily driven by higher revenue[13](index=13&type=chunk) - Total expenses **decreased significantly** in both the three-month and six-month periods of 2025 compared to 2024, reflecting successful cost control measures[13](index=13&type=chunk) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) | Balance Sheet Item | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $253,744 | $530,230 | | Marketable securities | $358,560 | $392,888 | | **Total Current Assets** | $919,512 | $1,128,942 | | **Total Assets** | $1,336,549 | $1,560,418 | | Deferred revenue (Current) | $113,763 | $675,067 | | **Total Liabilities** | $1,298,924 | $2,184,259 | | **Total Stockholders' Equity (Deficit)** | $37,625 | ($623,841) | - The company's financial position improved significantly, with total stockholders' equity becoming positive at **$37.6 million** as of June 30, 2025, compared to a deficit of **$623.8 million** at the end of 2024[17](index=17&type=chunk) - Total liabilities saw a substantial decrease to **$1.30 billion** from **$2.18 billion**, primarily due to a reduction in deferred revenue from **$1.12 billion** to **$0.51 billion**[17](index=17&type=chunk)[48](index=48&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($312,964) | $230,714 | | Net cash provided by (used in) investing activities | $37,779 | ($379,957) | | Net cash (used in) provided by financing activities | ($8,101) | $264,102 | | **Net (decrease) in cash, cash equivalents, and restricted cash** | **($276,310)** | **$111,748** | - There was a significant negative swing in operating cash flow, with a net cash use of **$313.0 million** in H1 2025 compared to a net cash provision of **$230.7 million** in H1 2024[22](index=22&type=chunk) [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Notes detail the strategic focus on the Sanofi partnership, revenue from APA terminations, and the basis for the going concern assumption - The company's three strategic priorities are: focusing on the Sanofi partnership, enhancing existing partnerships and forging new ones, and advancing its technology platform and early-stage pipeline[25](index=25&type=chunk) - Based on its current cash balance and cash flow forecast, management has concluded that the company has **sufficient capital to fund operations for at least one year** from the financial statement issuance date, supporting the going concern assumption[34](index=34&type=chunk) - In H1 2025, the company recognized **$575.7 million** in product sales revenue from the termination of the Canada APA and **$27.3 million** from the termination of the New Zealand APA[60](index=60&type=chunk)[61](index=61&type=chunk) - The company continued its global restructuring plan, recording charges of **$5.1 million** in H1 2025 for severance and asset impairments, as part of its effort to improve operational efficiency[111](index=111&type=chunk)[113](index=113&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes improved H1 2025 results to APA terminations and outlines its strategic focus on the Sanofi partnership and pipeline advancement [Overview and Pipeline](index=33&type=section&id=Overview%20and%20Pipeline) - The company's strategy is centered on three priorities: the Sanofi partnership, leveraging its technology platform for new partnerships, and advancing its early-stage pipeline through a lean operating model[126](index=126&type=chunk) - In May 2025, the FDA approved the Biologics License Application (BLA) for Nuvaxovid, triggering a **$175 million milestone payment** from Sanofi[137](index=137&type=chunk)[158](index=158&type=chunk) - Novavax intends to partner its late-stage COVID-Influenza Combination (CIC) and stand-alone influenza vaccine candidates to advance further development after a Phase 3 trial showed robust immune responses[130](index=130&type=chunk)[151](index=151&type=chunk) - The early-stage pipeline is being advanced with a capital-efficient approach, focusing on RSV combinations, H5N1 avian pandemic influenza, shingles, and C. Diff, with the intent to partner these programs at proof of concept[132](index=132&type=chunk)[142](index=142&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Three Months Ended June 30, 2025 vs 2024 (in thousands) | Item | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $239,240 | $415,484 | ($176,244) | | Cost of Sales | $15,325 | $46,242 | ($30,917) | | R&D Expenses | $79,233 | $106,946 | ($27,713) | | SG&A Expenses | $43,612 | $101,298 | ($57,686) | | **Net Income** | $106,508 | $162,381 | ($55,873) | - The decrease in Q2 2025 revenue was primarily due to **lower licensing revenue** from the Sanofi CLA compared to the prior year, which included a large upfront fee recognition[167](index=167&type=chunk)[170](index=170&type=chunk) Six Months Ended June 30, 2025 vs 2024 (in thousands) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $905,895 | $509,339 | $396,556 | | Cost of Sales | $29,439 | $105,451 | ($76,012) | | R&D Expenses | $168,170 | $199,625 | ($31,455) | | SG&A Expenses | $91,702 | $188,096 | ($96,394) | | **Net Income** | $625,154 | $14,831 | $610,323 | - The substantial increase in H1 2025 revenue was driven by the recognition of **$603 million** from the termination of the Canada and New Zealand APAs[185](index=185&type=chunk) [Liquidity Matters and Capital Resources](index=49&type=section&id=Liquidity%20Matters%20and%20Capital%20Resources) - As of June 30, 2025, the company had **$627.5 million** in cash, cash equivalents, restricted cash, and marketable securities[215](index=215&type=chunk) - The company expects to receive a **$175.0 million milestone payment** from Sanofi in Q3 2025, which was triggered by the FDA's BLA approval[203](index=203&type=chunk)[215](index=215&type=chunk) - Under the Sanofi CLA, Novavax is eligible for up to **$475 million** in remaining aggregate milestone payments related to COVID-19 and combination vaccine products[203](index=203&type=chunk)[204](index=204&type=chunk) - The company has remaining obligations of **$222.1 million** under various APAs, with a risk that up to **$92.5 million** under the Australia APA may become refundable[212](index=212&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks stem from foreign currency fluctuations and interest rate movements on its investment portfolio - The company's operations are subject to foreign currency exchange rate fluctuations, primarily the U.S. dollar against the Euro, Pound Sterling, and Swedish Krona[222](index=222&type=chunk) - A **10% decline in foreign exchange rates** would result in an approximate **$16 million decline** in stockholders' equity as of June 30, 2025[223](index=223&type=chunk) - Interest rate risk is primarily confined to the company's investment portfolio, and the company does not believe it has material exposure from its fixed-rate convertible notes[225](index=225&type=chunk)[227](index=227&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective and noted no material changes to internal controls - As of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective at the reasonable assurance level**[228](index=228&type=chunk) - There were **no material changes** to the company's internal control over financial reporting during the quarter ended June 30, 2025[229](index=229&type=chunk) [PART II. OTHER INFORMATION](index=54&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part details legal proceedings, risk factors, and other required corporate disclosures [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company has resolved significant stockholder class action and derivative lawsuits, resulting in dismissals and a net settlement gain - The Sinnathurai securities class action was settled, and the case was **closed by the court in May 2024**[102](index=102&type=chunk)[231](index=231&type=chunk) - A settlement was reached in the consolidated derivative lawsuits, which was approved by the court in March 2025, including a **$6.8 million payment to Novavax** and the adoption of new governance measures, resulting in a net gain of **$4.8 million**[104](index=104&type=chunk)[233](index=233&type=chunk) - Following the main derivative settlement, the Mesa and Acosta actions in Delaware were dismissed with prejudice in May and July 2025, and the Kirst and Needelman actions in Maryland were dismissed in April 2025[107](index=107&type=chunk)[109](index=109&type=chunk)[236](index=236&type=chunk)[238](index=238&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) Key risks include contractual obligations, the transition to a commercial COVID-19 market, regulatory changes, and vaccine shelf-life approval - The company faces risks in satisfying performance obligations under its Sanofi CLA and APAs, with up to **$92.5 million** of deferred revenue from the Australia APA potentially refundable if regulatory deadlines are not met[241](index=241&type=chunk)[244](index=244&type=chunk) - There is significant uncertainty regarding pricing and reimbursement as the COVID-19 vaccine market **shifts from government purchasing to a commercial model**, which could be adversely affected by changes in recommendations from bodies like the ACIP[245](index=245&type=chunk)[250](index=250&type=chunk) - The company faces regulatory uncertainty due to the **change in presidential administration**, which could lead to adverse changes in vaccine recommendations by the CDC and ACIP, potentially reducing demand for its COVID-19 vaccine[248](index=248&type=chunk)[260](index=260&type=chunk) - A key commercial risk is the pending FDA approval to **extend the shelf life of its COVID-19 vaccine from three to six months**, as the current shelf life is unlikely to be commercially attractive[253](index=253&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the second quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the three months ended June 30, 2025[261](index=261&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including officer certifications and material agreements

Company Performance - Novavax (NVAX) ended the recent trading session at $6.85, showing a -2.28% change from the previous day's closing price, which lagged behind the S&P 500's daily loss of 0.13% [1] - Over the past month, shares of Novavax gained 6.05%, outperforming the Medical sector's loss of 0.96% and the S&P 500's gain of 3.39% [1] Upcoming Earnings - Analysts predict Novavax will report an EPS of -$0.19, indicating a 119.19% decline compared to the same quarter last year [2] - The consensus estimate for quarterly revenue is $118 million, down 71.6% from the year-ago period [2] Annual Forecast - Zacks Consensus Estimates forecast earnings of $2.48 per share and revenue of $1.05 billion for the year, reflecting changes of +301.63% and +53.6%, respectively, compared to the previous year [3] - Recent revisions to analyst forecasts for Novavax are important as they reflect near-term business trends, with positive revisions indicating a favorable business outlook [3] Valuation Metrics - Novavax has a Forward P/E ratio of 2.83, significantly lower than the industry average Forward P/E of 19.79, suggesting that Novavax is trading at a discount [6] - The company currently has a PEG ratio of 0.09, while the Medical - Biomedical and Genetics industry has an average PEG ratio of 1.75 [7] Industry Context - The Medical - Biomedical and Genetics industry, part of the Medical sector, holds a Zacks Industry Rank of 91, placing it in the top 37% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Points - Novavax, Inc. will report its second quarter 2025 financial results and operational highlights on August 6, 2025, at 8:30 a.m. ET [1] - The company utilizes a scientific expertise in vaccines and a proven technology platform, including protein-based nanoparticles and Matrix-M® adjuvant [2] - Novavax's growth strategy focuses on optimizing existing partnerships, expanding access to its technology platform, and fostering new collaborations [2] Conference Call Details - The conference call is scheduled for August 6, 2025, at 8:30 a.m. U.S. ET, with a registration link provided for participants [1] - A replay of the call will be available starting at 11:30 a.m. U.S. ET on the same day until August 13, 2025 [2] - Participants can join the call via a direct dial or by registering online for an automated callback [4]

Group 1: Stock Performance - Novavax (NVAX) closed at $6.97, with a daily increase of +1.9%, outperforming the S&P 500's gain of 0.14% [1] - Over the last month, Novavax shares decreased by 1.44%, while the Medical sector lost 1.34% and the S&P 500 gained 3.97% [1] Group 2: Upcoming Earnings - The upcoming EPS for Novavax is projected at -$0.12, indicating a 112.12% decline compared to the same quarter last year [2] - Revenue is estimated at $130.5 million, reflecting a 68.59% decrease from the corresponding quarter of the previous year [2] Group 3: Fiscal Year Estimates - For the entire fiscal year, earnings are projected at $2.65 per share, representing a +315.45% change from the previous year [3] - Revenue for the fiscal year is estimated at $1.07 billion, indicating a +56.76% change from the prior year [3] Group 4: Analyst Estimates and Rankings - Recent modifications to analyst estimates for Novavax indicate changing near-term business trends, with positive revisions suggesting optimism [4] - The Zacks Rank system, which includes estimate changes, currently ranks Novavax at 3 (Hold) [6] Group 5: Valuation Metrics - Novavax has a Forward P/E ratio of 2.58, which is a discount compared to the industry average Forward P/E of 18.51 [7] - The PEG ratio for Novavax is 0.06, significantly lower than the industry average PEG ratio of 1.54 [8] Group 6: Industry Ranking - The Medical - Biomedical and Genetics industry, which includes Novavax, has a Zacks Industry Rank of 74, placing it in the top 30% of over 250 industries [8][9] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [9]

Group 1: Canopy Growth - Canopy Growth has been a disappointing investment over the past five years, with a significant decline in net revenue and increased losses per share [3][4] - The cannabis industry faces challenges such as legal and regulatory issues, competition from illicit markets, and oversupply, particularly in Canada [5][6] - Despite cost-cutting efforts and a focus on in-demand products, the long-term outlook for Canopy Growth remains bleak, with expectations of further stock decline [6][7] Group 2: Novavax - Novavax reported substantial revenue growth in the first quarter, with revenue of $666.7 million and a net income of $518.6 million, a significant improvement from the previous year [8] - The company has positive results from phase 3 studies for its influenza and combination COVID-19 vaccines, along with partnerships with major pharmaceutical companies [8][9] - However, the long-term sustainability of Novavax's performance is questionable due to market unpredictability, competition from leaders like Moderna and Pfizer, and reliance on external funding for future trials [10][12][13]

Core Viewpoint - Novavax has experienced a significant decline in stock performance, with a return of -10.9% over the past month, contrasting with the S&P 500's +5.2% and the Zacks Medical - Biomedical and Genetics industry's +0.9% [2] Earnings Estimates - For the current quarter, Novavax is projected to report a loss of $0.12 per share, reflecting a -112.1% change year-over-year, with the consensus earnings estimate for the fiscal year at $2.65, indicating a +315.5% change [5][6] - The consensus earnings estimate for the next fiscal year is $0.4, which represents a -84.8% change from the previous year [6] Revenue Growth Forecast - The consensus sales estimate for the current quarter is $130.5 million, indicating a year-over-year decline of -68.6%. For the current fiscal year, the estimate is $1.07 billion (+56.8%), while for the next fiscal year, it is $516.45 million (-51.7%) [11] Last Reported Results and Surprise History - In the last reported quarter, Novavax achieved revenues of $666.66 million, a +610.3% year-over-year increase, with an EPS of $2.93 compared to -$1.05 a year ago. The revenue exceeded the Zacks Consensus Estimate by +215.04%, and the EPS surprise was +312.68% [12][13] Valuation - Novavax is graded B in the Zacks Value Style Score, indicating it is trading at a discount to its peers, which suggests potential undervaluation [17]

Core Insights - Novavax announced positive results from a late-stage study of its COVID-19-influenza combination (CIC) and standalone influenza vaccine candidates, showing robust immune responses in adults aged 65 and older [1][2][8] - The study's findings will guide the design of another late-stage trial that could support regulatory submissions if successful [3][8] - Novavax is seeking strategic collaborations to finance further development and commercialization of both vaccine candidates as part of a strategic shift to expand its pipeline [4][8] Stock Performance - Novavax shares have underperformed the industry year to date [5] Recent Developments - The announcement followed the FDA's approval of Nuvaxovid for older adults, with a narrower label than expected, restricting use in individuals aged 12-64 with high-risk conditions [7][8] - Sanofi has acquired exclusive global marketing rights for Nuvaxovid, part of a multi-billion-dollar deal, and will receive tiered royalties on future sales [10] Competitive Landscape - Other companies like Pfizer and Moderna are also developing COVID-flu combination vaccines, with Moderna ahead in its investigational candidate mRNA-1083, despite a recent setback [11][12] - Pfizer faced challenges in its phase III study for its combination vaccine, missing one of its primary immunogenicity objectives [13] - Sanofi is testing multiple COVID-19/flu combination vaccine candidates, with two receiving fast-track designation from the FDA [14]

Company Overview - Novavax has transitioned from a vertically integrated commercial organization focused on the launch of its COVID-19 vaccine, Nuvaxovid, to a model that emphasizes research and development (R&D) and diversified partnerships [3][4]. Business Model Evolution - From 2020 to 2022, the majority of Novavax's resources were dedicated to the development and introduction of Nuvaxovid, marking a singular focus on this product [4]. - In early 2023, the company began to evolve its business model to prioritize R&D and establish a broader range of partnerships [3]. Leadership and Presentation - The presentation at the Goldman Sachs 46th Annual Global Healthcare Conference featured key executives, including the CEO, CFO, and the head of R&D, indicating a strong leadership presence [1]. - The conference serves as a platform for Novavax to communicate its strategic direction and business evolution to potential investors and stakeholders [1].

Novavax (NVAX) FY Conference Summary Company Overview - **Company**: Novavax, Inc. (NVAX) - **Date of Conference**: June 11, 2025 - **Key Speakers**: John Jacobs (CEO), Jim Kelly (CFO), Dr. Roxandra Draghia (Head of R&D) Core Industry Insights - **Industry**: Biotechnology and Vaccine Development - **Focus**: Transition from a vertically integrated commercial model to a research and development (R&D) and partnership-focused model [3][4] Key Points and Arguments Business Model Evolution - Transitioned from a singular focus on the COVID-19 vaccine (Nuvaxovid) to a diversified R&D strategy [3][4] - Emphasis on long-term growth through R&D and partnerships [5][6] Strategic Priorities for 2025 1. **Optimize Sanofi Partnership**: Focus on maximizing the collaboration with Sanofi, which includes multiple revenue streams from licensing and royalties [6][12] 2. **Leverage Technology Platform**: Expand the utility of the Matrix M adjuvant and develop new formulations [6][11] 3. **Advance Early Stage Pipeline**: Develop high-value assets and explore additional partnerships beyond Sanofi [6][9] Financial Health and Cost Management - Reduced liabilities by over $2 billion and cut annual SG&A and R&D expenses by over $1 billion [6][7] - Plans to reduce headcount by approximately 80% by 2027 without compromising capabilities [7] Partnership Developments - Signed multiple Material Transfer Agreements (MTAs) with top pharmaceutical companies to explore Matrix M in their pipelines [8][9][22] - Collaboration with Sanofi includes licensing for COVID-19 and combination vaccines, with potential for hundreds of millions in milestones and royalties [12][14] Market Opportunities - COVID-19 continues to pose a significant health threat, with hospitalization rates four times higher than flu [15] - Growing consumer preference for combination vaccines, with 83% of individuals willing to adopt a combo vaccine [24][18] Product Differentiation - Novavax's vaccine shows 39% fewer symptoms compared to mRNA vaccines, highlighting better tolerability [19] - Matrix M adjuvant allows for the development of combination vaccines with less antigen, maintaining tolerability [19][11] R&D Pipeline - Launched four new early-stage programs in Q1 2025, including vaccines for RSV, H5N1, varicella zoster virus, and C. difficile [9][27][28] - Focus on using AI and machine learning for antigen design and study models [28] Future Expectations - Targeting non-GAAP profitability by 2027 through revenue growth from partnerships and cost reductions [31][33] - Anticipating significant milestones from the Sanofi partnership and additional collaborations [35][36] Upcoming Milestones - BLA approval received, with a $175 million milestone achieved [35][36] - Sanofi to commercialize the COVID vaccine in the US and Europe in 2025, with additional milestones available [36][37] Additional Important Insights - The malaria vaccine developed in collaboration with Oxford University is expected to save 180,000 children's lives by 2030 [20] - Sanofi is developing two combination products using Novavax's technology, currently in phase one/two studies [21] This summary encapsulates the strategic direction, financial health, partnership developments, and market opportunities for Novavax as discussed in the conference.

Core Insights - The Zacks Premium service provides tools for investors to enhance their stock market strategies and confidence [1] - Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score identifies undervalued stocks using financial ratios [3] - Growth Score assesses a company's financial health and future growth potential [4] - Momentum Score capitalizes on price trends and earnings outlook changes [5] - VGM Score combines all three styles to provide a comprehensive evaluation of stocks [6] Zacks Rank and Performance - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to guide investment decisions [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41%, significantly outperforming the S&P 500 [8] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [10] Stock Highlight: Novavax (NVAX) - Novavax, Inc. is a biotechnology company focused on developing vaccines for infectious diseases and has a Zacks Rank of 3 (Hold) with a VGM Score of B [12] - The company has a Momentum Style Score of B, with shares increasing by 16.3% in the past four weeks [13] - Recent upward revisions in earnings estimates indicate a positive outlook, with the Zacks Consensus Estimate rising from $1.05 to $2.03 per share [13] - Novavax has an impressive average earnings surprise of 77.9%, making it a noteworthy consideration for investors [13]