- Received authorization from the U.S. FDA and approval from
the European Commission for the Company's updated COVID-19 vaccine,
and launched the only protein-based non-mRNA vaccine
option
- Secured broad access to Novavax's COVID-19 vaccine in the
U.S.
- R21/Matrix-M malaria vaccine received recommendation from
WHO, resulting in initial sales of Matrix-M for launch
- Anticipate Phase 3 COVID-19-Influenza Combination vaccine
trial to commence in 2024, with potential for accelerated approval
and launch in 2026
- Expect to deliver total revenue at low end of guidance range
for season, when accounting for some revenue shifting into first
quarter 2024
- Prepared to initiate additional cost reduction program,
targeting over $300 million in 2024
to align company scope and structure with future COVID-19 market
opportunity
- Company to host conference call today at 8:30 a.m. ET
GAITHERSBURG, Md., Nov. 9, 2023
/PRNewswire/ -- 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
third quarter ended September 30,
2023.
"We are proud of the progress we made over the last quarter to
deliver the only protein-based non-mRNA vaccine option in the U.S.
and have worked to provide broad access across retail pharmacies
and healthcare offices," said John C.
Jacobs, President and Chief Executive Officer, Novavax.
"With the delayed start of respiratory vaccinations, we believe we
have yet to reach the midpoint of the vaccination season and, with
early and encouraging signs of demand for our vaccine, we believe
there remains opportunity to deliver doses and grow our share. This
reinforces our belief that the long-term COVID-19 market represents
a sustainable opportunity for Novavax in the years to come."
"As previously stated, one of our key objectives is to
strengthen the financial stability of the company. We are currently
exceeding the targeted reductions announced earlier in the year and
did so while launching our updated vaccine. To more efficiently
scale our business, we are prepared to initiate additional cost
reductions to further reduce expenses in 2024 by over $300 million, while continuing to maintain our
key capabilities and our ability to bring forward a combination
vaccine."
Third Quarter 2023 and Recent Highlights
During the third quarter, Novavax continued to make progress on
its three key priorities for 2023.
Priority #1: Deliver an Updated COVID-19 Vaccine for the
Upcoming 2023 Fall Vaccination Season
U.S. Market: Novavax received Emergency Use
Authorization (EUA) from the U.S. Food and Drug Administration
(FDA) in October for its updated COVID-19 vaccine and is executing
its commercial strategy to maximize access for consumers who want a
protein-based non-mRNA vaccine option.
- Expect U.S. 2023-2024 season COVID-19 vaccine demand of between
30 and 50 million doses, with potential for significant November
and December vaccinations given current trends and later start as
compared to 2022
- Secured broad access to the Company's updated vaccine through
major pharmacies, clinics and government programs
- Novavax's vaccine is available at approximately 14,000 pharmacy
locations, including Costco, CVS Pharmacy, Giant, Publix, Rite Aid
and Stop & Shop
Global Markets: Received approval in Europe for the Company's updated COVID-19
vaccine in individuals aged 12 and older
- Advanced regulatory filings against existing APAs for
Australia, Canada, New
Zealand, Singapore and
Taiwan
Priority #2: Reduce Rate of Spend, Manage Cash Flow and
Evolve Scale and Structure
Novavax has made significant progress on its commitment to
improve its financial position while maintaining the capabilities
to support long-term value creation.
- Reduced current liabilities by $128
million during the third quarter of 2023 and by
approximately $1 billion as of
September 30, 2023
- Reduced year-to-date operating expenses through the third
quarter of 2023 by $950 million or
47%, as compared to 2022
- On track to exceed the previously announced global
restructuring and cost reduction plan for 2023 by over $100 million for combined Research and
Development (R&D) and Selling, General, and Administrative
(SG&A) expenses
- Prepared to initiate additional cost reductions to further
reshape the size and scope of global operations beyond previously
stated cost reduction targets by over $300
million
Priority #3: Leverage Technology Platform, Capabilities,
and Portfolio of Assets to Drive Additional Value Beyond
Nuvaxovid™
Novavax remains focused on leveraging its technology platform to
drive long-term growth and protect global health.
- Expect to initiate a pivotal Phase 3 trial for
COVID-19-Influenza Combination (CIC) vaccine candidate in the
second half of 2024, with potential for accelerated approval and
launch as early as 2026
- Advanced partnerships with Matrix-M adjuvant technology
- R21/Matrix-M vaccine received recommendation from the World
Health Organization; launch expected in 2024
Third Quarter 2023 Financial Results
- Total revenue for the third quarter of 2023 was
$187 million, compared to
$735 million in the same period in
2022. Third quarter 2023 grant revenue of $165 million benefited from milestone
achievements related to U.S. market preparedness and progress on
clinical projects. Third quarter 2023 royalty and other revenue
includes $12 million in Matrix-M
sales to our collaboration partner in support of launch
preparations for the R21/Matrix-M malaria vaccine.
- Cost of sales for the third quarter of 2023 were
$99 million, compared to $435 million in the same period in 2022. Third
quarter 2023 cost of sales includes $82
million related to excess, obsolete or expired inventory and
losses on firm purchase commitments as compared to $249 million in the same period in 2022. Third
quarter 2023 cost of sales also includes a $22 million benefit related to certain negotiated
reductions to previously recognized firm purchase commitments.
- R&D expenses for the third quarter of 2023 were
$106 million, compared to
$304 million in the same period in
2022. The decrease was primarily due to reduction in clinical and
manufacturing spend and a $58 million
benefit associated with the negotiated settlement of manufacturing
liabilities recorded in the third quarter of 2023.
- SG&A expenses for the third quarter of 2023 were
$107 million, compared to
$123 million for the same period in
2022. The decrease was primarily due to certain cost containment
measures to reduce operating spend
- Net loss for the third quarter 2023 was $131 million, compared to a net loss of
$169 million in the same period in
2022.
- Cash, cash equivalents and restricted cash were
$666 million as of September 30, 2023, compared to $518 million as of June
30, 2023, and $1.3 billion as
of December 31, 2022. Through sales
of Novavax common stock pursuant to at-the-market offerings during
the third quarter of 2023, Novavax raised net proceeds of
$143 million.
Financial Framework
Novavax is updating its Full Year 2023 guidance and providing
First Quarter 2024 total revenue guidance:
For updated total revenue guidance, we have included combined FY
2023 and Q1 2024 total revenue to reflect the full delivery timing
and revenue recognition of sales associated with the 2023-2024
vaccination season. Consistent with 2023, we originally expected no
product sales revenue in the first quarter of 2024. Due to the
delayed start to and expectation for a longer season in the U.S.,
we expect some portion of revenue recognition will extend into the
first quarter of 2024. In addition, outside of the U.S., some
portion of APA dose deliveries may extend into the first quarter of
2024.
$ in
millions
|
Prior
(as of August 8,
2023)
|
Updated
(as of November 9,
2023)
|
|
|
|
|
FY
2023
|
Combined
FY 2023 &
Q1
2024
|
FY
2023
|
Q1
20243
|
Total
Revenue1
|
$1,300 -
$1,500
|
$1,300
|
$900 -
$1,100
|
$300
|
Product
Sales1
|
$960 -
$1,140
|
$850
|
$475 - $625
|
$300
|
Grants,
royalties & other
|
$340 -
$360
|
$450
|
$425 -
$475
|
|
|
|
|
|
|
Combined R&D and
SG&A2
|
$1,300 -
$1,400
|
|
$1,150 -
$1,250
|
|
|
|
1.
|
Full year 2023 and
first quarter 2024 guidance reflects APAs based on committed dose
delivery schedules of over $700 million, secured new
orders and U.S. market sales of $50 million to $150 million,
subject to updated variant manufacturing and regulatory
approvals.
|
2.
|
Full year 2023
adjusted combined R&D and SG&A expenses include one-time
restructuring costs for which $15 million was recorded in the
second quarter 2023.
|
3.
|
The first quarter
2024 total revenue guidance reflects the balancing amount to
achieve our expected combined full year 2023 and first quarter 2024
product sales and total revenue. We previously expected no product
sales in the first quarter of 2024.
|
Novavax is prepared to initiate an additional cost reduction
program to reduce 2024 expenses by over $300
million:
Intend to further reshape the size and scope of global business
operations beyond previously announced 2024 targets to align with
the COVID-19 market opportunity.
-
- Anticipate reducing 2024 R&D and SG&A expenses by over
$200 million compared to prior
targets to reflect $750 million or
lower spend for 2024, representing a greater than 50% reduction
compared to 2022.
- In addition, anticipate reducing supply network costs by over
$100 million as we continue to
rationalize our manufacturing footprint.
Conference Call
Novavax will host its quarterly conference call today at
8:30 a.m. ET. The dial-in numbers for
the conference call are (877) 550-1858 (Domestic) or (848) 488-9160
(International). Participants will be prompted to request to join
the Novavax, Inc. call. The passcode entry number is 1754341. A
replay of the conference call will be available starting at
11:30 a.m. ET on November 9, 2023, until 11:59 p.m. ET on November
16, 2023. To access the replay by telephone, dial (800)
645-7964 (Domestic) or (757) 849-6722 (International) and use
passcode 5567#.
A webcast of the conference call can also be accessed on the
Novavax website at novavax.com/events. A replay of the webcast will
be available on the Novavax website until February 7, 2023.
Trade Name in the U.S.
The trade name Nuvaxovid has not been approved by the U.S.
FDA.
About Novavax
Novavax, Inc. (Nasdaq: NVAX) promotes improved health by
discovering, developing and commercializing innovative vaccines to
help protect against serious infectious diseases. Novavax, a global
company based in Gaithersburg,
Md., U.S., offers a differentiated vaccine platform that
combines a recombinant protein approach, innovative nanoparticle
technology and Novavax's patented Matrix-M adjuvant to enhance the
immune response. Focused on the world's most urgent health
challenges, Novavax is currently evaluating vaccines for COVID-19,
influenza and COVID-19 and influenza combined. Please visit
novavax.com and LinkedIn for more information.
Forward-Looking Statements
Statements herein relating to the future of Novavax, its
near-term priorities including delivering an updated COVID-19
vaccine for the 2023-2024 vaccination season, reducing rate of
spend, managing cash flow and evolving its scale and structure, the
amount and impact of Novavax's previously announced global
restructuring and cost reduction plan and new cost reduction plan,
its operating plans, objectives and prospects, full year 2023 and
first quarter 2024 financial guidance, its future financial or
business performance, conditions or strategies, its partnerships,
including with respect to the launch of R21/Matrix-M Malaria
vaccine, the ongoing development of its updated COVID-19 vaccine,
its CIC vaccine candidate and stand-alone influenza vaccine
candidate, the scope, timing and outcome of future and pending
regulatory filings and actions, including Novavax's expected U.S.
Biologics License Application submission for Novavax's prototype
COVID-19 vaccine and submissions for its updated COVID-19 vaccine
in Europe, the availability of its
updated COVID-19 vaccine, the fall 2023 and future COVID-19 market,
and the timing of delivery and distribution of its vaccine are
forward-looking statements. Novavax cautions that these
forward-looking statements are subject to numerous risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statements. These risks and
uncertainties include, without limitation, Novavax's ability to
successfully manufacture, distribute, or market its updated
COVID-19 vaccine for the 2023-2024 vaccination season; challenges
satisfying, alone or together with partners, various safety,
efficacy, and product characterization requirements, including
those related to process qualification, assay validation and
stability testing, necessary to satisfy applicable regulatory
authorities; challenges or delays in conducting clinical trials;
challenges or delays in obtaining regulatory authorization for its
product candidates, including its updated COVID-19 vaccine in time
for the 2023-2024 vaccination season or for future COVID-19 variant
strain changes; manufacturing, distribution or export delays or
challenges; Novavax's exclusive dependence on Serum Institute of
India Pvt. Ltd. and Serum Life Sciences Limited for co-formulation
and filling and PCI Pharma Services for finishing Novavax's
COVID-19 vaccines and the impact of any delays or disruptions in
their operations on the delivery of customer orders; difficulty
obtaining scarce raw materials and supplies; resource constraints,
including human capital and manufacturing capacity, and constraints
on Novavax's ability to pursue planned regulatory pathways, alone
or with partners, in multiple jurisdictions simultaneously, leading
to staggered regulatory filings, and potential regulatory actions;
the loss of future funding from the U.S. government; the potential
for an unfavorable outcome in disputes, including the pending
arbitration with Gavi; challenges in implementing its global
restructuring and cost reduction plan; Novavax's ability to timely
deliver doses; challenges in obtaining commercial adoption and
market acceptance of its updated COVID-19 vaccine, NVX-CoV2373 or
any COVID-19 variant strain-containing formulation; challenges
meeting contractual requirements under agreements with multiple
commercial, governmental, and other entities, including
requirements to deliver doses that may require Novavax to refund
portions of upfront and other payments previously received or
result in reduced future payments pursuant to such agreements;
challenges related to the seasonality of vaccinations against
COVID-19; and those other risk factors identified in the "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" sections of Novavax's Annual
Report on Form 10-K for the year ended December 31, 2022 and subsequent Quarterly
Reports on Form 10-Q, as filed with the Securities and Exchange
Commission (SEC). We caution investors not to place considerable
reliance on forward-looking statements contained in this press
release. You are encouraged to read our filings with the SEC,
available at www.sec.gov and www.novavax.com, for a discussion of
these and other risks and uncertainties. The forward-looking
statements in this press release speak only as of the date of this
document, and we undertake no obligation to update or revise any of
the statements. Our business is subject to substantial risks and
uncertainties, including those referenced above. Investors,
potential investors, and others should give careful consideration
to these risks and uncertainties.
NOVAVAX,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except per share information)
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September 30,
|
|
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Product
sales
|
$
2,231
|
|
$ 626,091
|
|
$
279,937
|
|
$
1,267,174
|
Grants
|
164,922
|
|
106,273
|
|
389,380
|
|
313,348
|
Royalties
and other
|
19,833
|
|
2,213
|
|
23,046
|
|
43,951
|
Total
revenue
|
186,986
|
|
734,577
|
|
692,363
|
|
1,624,473
|
Expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
98,929
|
|
434,593
|
|
188,792
|
|
720,874
|
Research
and development
|
106,229
|
|
304,297
|
|
572,805
|
|
977,428
|
Selling,
general, and administrative
|
107,460
|
|
122,876
|
|
313,709
|
|
327,028
|
Total
expenses
|
312,618
|
|
861,766
|
|
1,075,306
|
|
2,025,330
|
Loss from
operations
|
(125,632)
|
|
(127,189)
|
|
(382,943)
|
|
(400,857)
|
Interest
expense
|
(2,859)
|
|
(4,169)
|
|
(10,299)
|
|
(15,279)
|
Other income
(expense)
|
(2,982)
|
|
(34,783)
|
|
26,912
|
|
(53,002)
|
Loss before income
taxes
|
(131,473)
|
|
(166,141)
|
|
(366,330)
|
|
(469,138)
|
Income tax
expense (benefit)
|
(697)
|
|
2,472
|
|
343
|
|
6,552
|
Net loss
|
$ (130,776)
|
|
$
(168,613)
|
|
$
(366,673)
|
|
$
(475,690)
|
|
|
|
|
|
|
|
|
Net loss per
share
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(1.26)
|
|
$
(2.15)
|
|
$
(3.94)
|
|
$
(6.13)
|
Weighted average number
of common shares outstanding
|
|
|
|
|
|
|
|
Basic and
diluted
|
103,429
|
|
78,274
|
|
93,046
|
|
77,631
|
SELECTED
CONSOLIDATED BALANCE SHEET DATA
|
(in
thousands)
|
|
|
September
30,
2023
|
|
December
31,
2022
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
651,104
|
|
$
1,336,883
|
|
Total restricted
cash
|
15,259
|
|
11,962
|
|
Total current
assets
|
1,006,764
|
|
1,703,391
|
|
Working
capital
|
(461,826)
|
|
(756,553)
|
|
Total assets
|
1,657,157
|
|
2,258,679
|
|
Convertible notes
payable*
|
167,621
|
|
491,347
|
|
Total stockholders'
deficit
|
(678,350)
|
|
(634,078)
|
|
|
|
|
|
|
|
|
*Included in
non-current liabilities as of September 30, 2023, and current and
non-current liabilities as of December 31, 2022.
|
Contacts:
Investors
Erika Schultz
240-268-2022
ir@novavax.com
Media
Ali Chartan
240-720-7804
media@novavax.com
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SOURCE NOVAVAX, INC