Novavax, Inc. Conference Call Summary Company Overview - **Company**: Novavax, Inc. (NASDAQ: NVAX) - **Date**: November 20, 2024 - **Participants**: - Jim Kelly - CFO - Ruxandra Draghia - Head of R&D - Bob Walker - Chief Medical Officer Key Points Industry and Company Focus - Novavax is transitioning from a COVID-19 vaccine focus to a broader pipeline that includes flu and combination vaccines [4][8] - The company utilizes a validated technology platform based on nanotechnology recombinant protein and proprietary Matrix adjuvant [4] Strategic Partnerships and Developments - A licensing agreement with Sanofi allows them to develop a combination of Novavax's COVID vaccine with their flu vaccine [5] - Novavax is preparing to initiate Phase 3 trials for its own proprietary flu plus COVID combination vaccine [6] Market Position and Performance - Novavax currently holds approximately 3% market share in the COVID vaccine market, an improvement from the previous year [9][13] - The company aims to enhance its market share through improved product offerings and partnerships, particularly with Sanofi [14][15] Challenges and Solutions - Initial market entry faced challenges such as a short shelf life of the vaccine, which impacted pre-booking by pharmacies [13] - Transitioning commercial leadership to Sanofi is expected to improve market performance due to their established infrastructure [14][15] Clinical Trials and Regulatory Updates - A clinical hold on the COVID flu combination vaccine was lifted, allowing Novavax to proceed with Phase 3 trials [28][32] - The Phase 3 trial will focus on immunogenicity and non-inferiority compared to market leaders, particularly for individuals over 65 [34] Future Pipeline and Opportunities - Novavax is exploring additional vaccine opportunities, including RSV and pandemic flu, leveraging its Matrix-M platform [40][43] - The company is assessing partnerships to enhance existing vaccines and potentially expand into oncology [43][45] Financial Position - Novavax ended the quarter with over $1 billion in cash and receivables, ensuring a runway of 1-2 years for R&D and operational expenses [47] Conclusion - Novavax is positioned to leverage its technology and partnerships to create value in the vaccine market, with a focus on respiratory diseases and potential expansion into other therapeutic areas [46]

Group 1 - Novavax granted non-qualified stock options and restricted stock units to Ruxandra Draghia-Akli as an inducement for her employment, effective November 11, 2024 [1][2] - The non-qualified stock option allows the purchase of 64,150 shares at an exercise price of $9.01, with a ten-year term and a vesting schedule based on continued employment [2] - The restricted stock units consist of 42,770 shares, vesting one-third on each of the first three anniversaries of the grant date, also contingent on continued employment [2] Group 2 - Novavax is a global company focused on developing innovative vaccines, including a COVID-19 vaccine and candidates for COVID-19-Influenza Combination and stand-alone influenza vaccines [3] - The company utilizes a recombinant protein approach and patented Matrix-M adjuvant to enhance immune response [3] - Novavax's adjuvant is also part of the malaria vaccine developed by the University of Oxford and Serum Institute of India [3]

Core Viewpoint - Novavax reported a narrower loss in Q3 2024 compared to expectations, driven by increased product sales of its COVID-19 vaccine, but overall revenues declined significantly year-over-year Financial Performance - The company incurred a loss of 76 cents per share, better than the Zacks Consensus Estimate of a loss of 87 cents, and improved from a loss of $1.26 per share in the same quarter last year [1] - Revenues for the quarter were $85 million, exceeding the Zacks Consensus Estimate of $57 million, but representing a 55% decline year-over-year [1] - Product sales reached $38.2 million, a significant increase from $2.2 million in the prior year, primarily due to the COVID-19 vaccine sales in the U.S., although it fell short of the Zacks Consensus Estimate of $49 million [2] - Licensing, royalties, and other revenues rose 133% year-over-year to $46.3 million, attributed to a new agreement with Sanofi for the COVID-19 vaccine [3] Strategic Partnerships - Novavax entered a partnership with Sanofi, which will market its COVID-19 vaccine and develop combination vaccines, receiving a $570 million payment, including $70 million in equity investment [4] - The company is eligible for milestone payments of up to $700 million and royalties on vaccine sales from Sanofi [4] Cost Management - Research and development expenses were $87 million, down 18% year-over-year, while selling, general, and administrative expenses decreased 34% to $71 million due to restructuring efforts [6] Cash Position - As of September 30, 2024, Novavax had $924 million in cash and cash equivalents, down from $1.1 billion as of June 30, 2024 [7] Guidance - For 2024, Novavax revised its total revenue guidance to $650-$700 million, down from $700-$800 million, reflecting lower vaccine uptake outside the U.S. [8] - The revised guidance includes nearly $475 million in licensing and royalties, with product revenue expected to be $175-$225 million, reduced from $275-$375 million [9] Pipeline Developments - The FDA lifted the clinical hold on Novavax's COVID-19-Influenza Combination and stand-alone influenza vaccine candidates, allowing the company to proceed with a phase III study [13] - Novavax is on track to complete a pediatric clinical study on its COVID-19 vaccine, which could trigger a $50 million milestone payment from Sanofi [14] - A regulatory filing for full approval of the COVID-19 vaccine is under FDA review, with a decision expected in April next year, potentially triggering a $175 million milestone payment from Sanofi [14] Future Projections - The company maintains its combined R&D and SG&A expense guidance of $700-$750 million for 2024, with expectations of $500 million for 2025 and around $350 million for 2026, with some costs reimbursed by Sanofi [11][12]

Group 1 - Novavax, Inc. will participate in the Jefferies London Healthcare Conference on November 20, 2024, featuring a fireside chat with CEO John C. Jacobs and other management team members [1][2] - The fireside chat is scheduled from 11:00 to 11:25 a.m. Greenwich Mean Time and will be moderated by Roger Song, MD, CFA, an Equity Analyst [2] - A replay of the fireside chat will be available on Novavax's Events & Presentations page for 30 days following the conference [2] Group 2 - Novavax is a global company based in Gaithersburg, Maryland, focused on developing innovative vaccines to combat serious infectious diseases [3] - The company utilizes a differentiated vaccine platform that includes a recombinant protein approach, innovative nanoparticle technology, and the patented Matrix-M adjuvant to enhance immune response [3] - Novavax's portfolio includes a COVID-19 vaccine and candidates for COVID-19-Influenza Combination and stand-alone influenza vaccines, as well as involvement in the R21/Matrix-M malaria vaccine developed by the University of Oxford and Serum Institute of India [3]

Group 1 - Brendan completed a Ph.D. at Stanford University in organic synthesis in 2009 [1] - He worked for Merck from 2009 to 2013 and has experience in biotech startups including Theravance and Aspira [1] - Brendan is the first employee and co-founder of 1200 Pharma, which spun out of Caltech and received significant investment in the 8 figures [1] Group 2 - Brendan remains an avid investor focused on market trends, particularly in biotechnology stocks [1]

Financial Data and Key Metrics Changes - Novavax recorded total revenue of $85 million for Q3 2024, down from $187 million in Q3 2023, with product sales increasing to $38 million from $2 million in the same period last year [66][70] - Combined R&D and SG&A expenses were reduced by 26% to $158 million compared to Q3 2023, with a full-year guidance for R&D and SG&A expenses set between $700 million and $750 million, reflecting a decrease of approximately 40% compared to 2023 [67][68] - The company ended Q3 2024 with over $1 billion in cash and accounts receivables, maintaining a strong cash position [69] Business Line Data and Key Metrics Changes - The COVID-19 vaccine program saw significant improvements, with Novavax's vaccine administrations in the US outperforming the entire previous season, achieving a current market share of approximately 3% [31][32] - The company initiated the '24-'25 COVID-19 commercial season earlier than last year, with expectations of a total market size of approximately 40 million to 50 million shots this season [33] - The standalone influenza vaccine program is positioned to potentially be the first recombinant-based protein adjuvanted flu vaccine in the market, with plans to partner these assets [19][20] Market Data and Key Metrics Changes - Novavax's vaccine is now available in over 30,000 locations, including major pharmacies, which has increased visibility and access [34] - The company achieved approximately 70% market share in certain regions with favorable market access contracts, particularly among the target audience of individuals aged 65 and older [36] Company Strategy and Development Direction - The company is focused on a new corporate growth strategy that emphasizes business development and organic R&D, transitioning from a singular focus on the COVID-19 vaccine to a broader portfolio [9][10] - Key value drivers include the Sanofi partnership, late-stage pipeline development, leveraging technology for additional partnerships, and expanding the early-stage pipeline [11][12] - The company aims to execute a disciplined expense management strategy to support its growth initiatives [12][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for COVID-19 vaccines and the potential for Sanofi's commercialization efforts to enhance market share in 2025 and beyond [39][40] - The company is preparing for a seamless transition of commercial activities to Sanofi, which is expected to leverage Sanofi's scale and resources [39][40] - Management highlighted the importance of maintaining a flexible cost structure while pursuing value creation through strategic partnerships and R&D [26][69] Other Important Information - The clinical hold on the CIC and standalone influenza vaccine candidates has been lifted, allowing the company to proceed with Phase 3 trials [45][46] - The company welcomed Dr. Ruxandra Draghia as the new Head of R&D, expected to play a crucial role in evaluating future pipeline opportunities [30] Q&A Session Summary Question: Clinical hold removal and Phase 3 trial timing - Management confirmed that they are working on logistics to start the Phase 3 trial as soon as possible, with no specific date provided yet [90][92] Question: Commercial sales and market dynamics - The company reported $38 million in commercial sales, primarily from the US, and discussed the dynamics of retail versus non-retail channels [95][111] Question: Future IND filings and Sanofi's prioritization - The next IND filings are expected to be for the RSV combination program and pandemic influenza, with Sanofi preparing to initiate a Phase 1/2 CIC study this year [104][105]

Group 1 - Novavax shares declined after the company reduced its full-year revenue guidance in its third-quarter results [1][3] - The revised full-year revenue expectation is $650 million to $700 million, down from a previous estimate of $700 million to $800 million, and below the analyst consensus of $747.6 million [2] - In the third quarter, revenue decreased by 55% year-over-year to $85 million, compared to $187 million a year earlier, although it exceeded analysts' expectations [3] Group 2 - The FDA has allowed Novavax to continue testing its combination COVID-19-flu and standalone flu vaccines after lifting a clinical hold on the studies [4] - The FDA's decision enables Novavax to begin enrolling participants for a planned Phase 3 trial, indicating that the company has satisfactorily addressed all clinical hold issues [4]

| --- | --- | --- | |-------------------------------------|---------------------|-------| | | Third quarter 2024 | | | | | | | operational | financial results & | | | highlights | | | | Nasdaq: NVAX \| November 12th, 2024 | | | © 2024 NOVAVAX. All rights reserved. 1 Cautionary note regarding forward-looking statements This presentation includes forward-looking statements. These forward-looking statements generally can be identified by the use of words such as "anticipate," "expect," "plan," "could," "may," ...

Novavax (NVAX) came out with a quarterly loss of $0.76 per share versus the Zacks Consensus Estimate of a loss of $0.87. This compares to loss of $1.26 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 12.64%. A quarter ago, it was expected that this vaccine maker would post earnings of $1.82 per share when it actually produced earnings of $0.99, delivering a surprise of -45.60%.Over the last four quarters, the company has surpa ...

Core Viewpoint - Novavax, Inc. has made significant progress in its R&D strategy and financial performance, including the removal of the clinical hold on its COVID-19-Influenza Combination vaccine and the authorization for its updated COVID-19 vaccine for the 2024-2025 season [1][5][7]. Financial Performance - Total revenue for Q3 2024 was $85 million, a decrease from $187 million in Q3 2023 [9]. - Product sales amounted to $38 million, primarily from the U.S. market, while licensing, royalties, and other revenue were $46 million [9]. - The net loss for Q3 2024 was $121 million, compared to a net loss of $131 million in the same period in 2023 [9][18]. Operational Highlights - The company ended Q3 2024 with $1 billion in cash and receivables [1]. - Novavax is advancing its partnership with Sanofi for the Nuvaxovid™ COVID-19 vaccine, with a milestone payment of $50 million expected upon completion of pediatric clinical trial database lock [4]. - The FDA has removed the clinical hold on Novavax's Investigational New Drug application for its COVID-19-Influenza Combination and stand-alone influenza vaccine candidates [5]. R&D Strategy - Novavax is focusing on expanding its early-stage pipeline beyond COVID-19 and influenza, utilizing its proven technology platform [2]. - The company has outlined guiding principles for its new R&D strategy and appointed Ruxandra Draghia-Akli as Executive Vice President and Head of R&D [5]. - Ongoing pre-clinical programs for pandemic influenza and respiratory syncytial virus (RSV) are being advanced towards IND readiness [5]. Cost Management - Novavax achieved a 26% reduction in combined R&D and SG&A expenses in Q3 2024 compared to the same period in 2023 [6]. - The company targets combined R&D and SG&A expenses of approximately $500 million for 2025 and $350 million for 2026, reflecting a significant reduction from previous years [6]. Market Position - The updated COVID-19 vaccine has received Emergency Use Authorization from the U.S. FDA for individuals aged 12 and older, with broader access through over 30,000 locations in the U.S. [7][9]. - Global authorizations have been received, including in the European Union, Canada, and Taiwan [9].