Novavax Reports Second Quarter 2024 Financial Results and Operational Highlights

Novavax, Inc. (Nasdaq: NVAX), a global company advancing protein-based vaccines with its Matrix-M™ adjuvant, today announced its financial results and operational highlights for the second quarter ended June 30, 2024.

“This is an exciting time for Novavax, and we have been keenly focused on evolving our operating model to leverage our key drivers of value,” said John C. Jacobs, President and Chief Executive Officer, Novavax. “We intend to drive future value for the business through not only the Sanofi partnership, but also through our late-stage combination and influenza assets. We plan to unveil a new and expanded clinical pipeline by the end of this year and leverage both the pipeline and our proven technology to drive additional partnerships and deals and to ultimately drive significant, long-term value for our shareholders.”

Second Quarter 2024 and Recent Highlights

During the second quarter, Novavax continued executing against its four key priorities for the remainder of 2024.

Priority #1: Successful Execution of Sanofi Partnership

Novavax has taken steps to enable a successful operationalization of the collaboration and license agreement (the Sanofi Agreement) with Sanofi Pasteur Inc. (Sanofi).

Effective January 1, 2025, Sanofi will assume primary commercial responsibility for Novavax’s updated 2024-2025 formula COVID-19 vaccine (NVX-CoV2705) in the U.S., Europe and select major markets not currently subject to Novavax Advance Purchase Agreements (APAs) or existing partnership agreements.

Received $500 million upfront payment and an approximately $70 million equity investment from Sanofi.

Novavax is eligible to receive up to $700 million in development, regulatory and launch milestones for activities related to commercializing Nuvaxovid™ and advancing Sanofi’s flu-COVID-19 combination vaccine candidate plus royalties. In addition, Novavax is eligible to receive royalties associated with any other Nuvaxovid combination vaccine Sanofi chooses to develop.

For each additional Sanofi vaccine product developed under the non-exclusive license with Novavax’s Matrix-M adjuvant technology, Novavax is eligible to receive additional launch and sales milestones of up to $210 million per product plus ongoing product royalties.

Priority #2: Drive Incremental Value from Novavax’s Proven Technology Platform

Novavax continued to leverage its technology platform to drive value creation.

On track to initiate the Phase 3 immunogenicity trial for both COVID-19-Influenza Combination (CIC) and stand-alone influenza vaccine candidates in the fourth quarter of 2024, with data expected by mid-2025.

Conducting pipeline prioritization activities to determine Novavax’s lead portfolio programs.

Priority #3: Continue Evolution of Novavax and Reduce Operating Expenses

Novavax continued to progress its cost reduction program to create a more lean and agile organization and accelerate its focus on Research and Development (R&D).

On track with global restructuring and cost reduction plan with an approximately 34% reduction in combined R&D and Selling, General and Administrative (SG&A) expenses in the second quarter of 2024 compared to the same period for 2023.

Prepared to initiate an additional cost reduction program to reduce R&D plus SG&A expenses, with a portion of expenses to be reimbursed by Sanofi under the Sanofi Agreement. Novavax plans to continue assessing existing capabilities to further refine the shape, size and scope of its organization this year and into 2025.

Targeting full year combined R&D and SG&A expenses to be below $500 million for full year 2025 and below $350 million for full year 2026. Novavax expects greater than $50 million of such expenses in 2025 to be reimbursed by Sanofi under the Sanofi Agreement, resulting in adjusted combined R&D and SG&A expenses, net of Sanofi reimbursement costs under the Sanofi Agreement, of below $450 million for full year 2025.

Priority #4: Deliver an Updated COVID-19 Vaccine for the 2024-2025 Vaccination Season

Novavax expects to deliver its updated 2024-2025 formula COVID-19 vaccine to the market by the start of the season.

U.S. Market:

Submitted an Emergency Use Authorization (EUA) amendment to the U.S. Food and Drug Administration (FDA).

Advanced manufacturing of pre-filled syringe presentation of updated 2024-2025 formula COVID-19 vaccine following FDA strain selection guidance. Expect doses will be ready to ship upon receipt of EUA.

FDA accepted the Biologics License Application (BLA) for Novavax’s COVID-19 vaccine with a Prescription Drug User Fee Act date of April 2025.

Advanced retail pharmacy contract negotiations to enhance access for the 2024-2025 vaccination season.

Global Markets:

For 2024, made decision to conduct lean and targeted commercial launch in Europe in select key countries including Germany, Italy and Poland.

Submitted marketing authorization amendments to the European Medicines Agency (EMA) and expect doses will be ready to ship upon receipt of market authorization.

Second Quarter 2024 Financial Results

Total revenue for the second quarter of 2024 was $415 million, compared to $424 million in the same period in 2023. Second quarter 2024 licensing, royalties and other revenue includes $391 million associated with the $500 million upfront payment received under the Sanofi Agreement.

Cost of sales for the second quarter of 2024 was $46 million, compared to $56 million in the same period in 2023. These quarters included $24 million and $31 million, respectively, related to excess, obsolete or expired inventory, losses on firm purchase commitments under third-party supply agreements and unutilized manufacturing capacity.

R&D expenses for the second quarter of 2024 were $107 million, compared to $219 million in the same period in 2023. The decrease was primarily due to reductions in manufacturing and clinical research-related spend.

SG&A expenses for the second quarter of 2024 were $101 million, compared to $94 million for the same period in 2023. The increase was primarily due to certain fees paid in association with signing the Sanofi Agreement.

Net income for the second quarter 2024 was $162 million, compared to a net income of $58 million in the same period in 2023.

Cash, cash equivalents, marketable securities and restricted cash (Cash) were $1.1 billion as of June 30, 2024, compared to $584 million as of December 31, 2023.