- Announced global restructuring and cost reduction initiative
with expected 2024 full-year R&D and SG&A reduction of
approximately 40% to 50% vs 2022
- Provided full year 2023 total revenue guidance of between
$1.4 and $1.6
billion
- First quarter revenue reflects shift to seasonal demand
pattern; on-track to deliver updated COVID vaccine for Fall
season
- Announced positive Phase 2 topline results for
COVID-Influenza Combination, standalone influenza, and high-dose
COVID vaccine candidates
- Company to host conference call today at 8:30 a.m. ET
GAITHERSBURG, Md., May 9, 2023
/PRNewswire/ -- Novavax, Inc. (Nasdaq: NVAX), a global company
advancing protein-based vaccines with its novel
Matrix-M™ adjuvant, today announced its financial
results and operational highlights for the first quarter ended
March 31, 2023.
"Today we outlined significant measures intended to reduce
spend, extend our cash runway, and operate more efficiently.
Combined with our focus on revenue generation from
Nuvaxovid™ and management of our current
liabilities, these measures should strengthen our cash position and
our potential for the long-term growth and stability of Novavax,"
said John C. Jacobs, President and
Chief Executive Officer, Novavax. "We also made significant
progress on our other key priorities, including our efforts to
deliver an updated COVID vaccine for the Fall season. And, today we
announced positive Phase 2 data that we believe supports the
further development of our combination COVID-influenza, standalone
influenza, and high-dose COVID vaccines.
Reducing our workforce has been a difficult decision, but we
believe it was necessary to better align our infrastructure and
scale to the endemic COVID opportunity," continued Mr. Jacobs.
"Though we still have substantial challenges ahead of us in 2023,
we are encouraged by the progress we have made in the last quarter
and are determined to continue executing on our top
priorities."
First Quarter 2023 and Recent Highlights
During the quarter, the company has made progress delivering on
the three near-term priorities laid out during its fourth quarter
2022 earnings call.
Priority #1: Deliver an Updated, Competitive COVID Vaccine
for the Upcoming 2023 Fall Vaccination Season
Novavax remains focused on our top priority of delivering an
updated, competitive COVID vaccine consistent with public health
recommendations for the 2023 Fall vaccination season.
- Ongoing discussions with global regulators on strain selection
guidance and advancement of commercial preparedness for Fall
2023
-
- Invited to join the U.S. Food and Drug Administration's
Technology Working Group to evaluate emerging variants in
preparation for strain selection at the June VRBPAC meeting
- Ongoing development of variant strains "at risk" to support
regulatory and commercial readiness
- Modified U.S. government agreement for up to 1.5 million
additional doses of Novavax's COVID vaccine for delivery in 2023,
with initial delivery supplied in five-dose vials in the first
quarter of 2023
- Continued expansion of Nuvaxovid label to enable broader uptake
in the long-term commercial market
- Completed enrollment and on track to receive topline results
mid-2023 for Part 2 of Phase 3 strain change study, which is a
regulatory prerequisite for updating our 2023-2024 vaccine
composition
- Expect to file U.S. Biologics License Application in second
half of 2023
Priority #2: Reduce our Rate of Spend, Manage our Cash
Flow and Evolve our Scale & Structure
Novavax is focused on significantly reducing our expenses while
retaining the key capabilities needed to execute our operating
plans.
- Announced a global restructuring and cost reduction plan, which
is expected to reduce our annual combined 2024 R&D and SG&A
expenses by approximately 40% to 50% versus 2022
-
- Includes consolidation of facilities and infrastructure and
approximately 25% reduction in global workforce
- 2023 R&D and SG&A expense reduction expected to be 20%
to 25% versus 2022, based on timing of implementation, local laws
and regulations and other factors, as adjusted to exclude one-time
charges
Priority #3: Leverage our Technology Platform, our
Capabilities and our Portfolio of Assets to Drive Additional Value
Beyond Nuvaxovid Alone
Novavax continues to leverage our pipeline and technology with
the intent of delivering long-term growth and protecting global
health.
- Announced positive Phase 2 COVID-Influenza Combination (CIC)
vaccine, standalone influenza, and high-dose COVID vaccine data,
which evaluated safety and immunogenicity of different
formulations
-
- All three vaccine candidates were well-tolerated, demonstrated
a reassuring preliminary safety profile, and had reactogenicity
comparable to authorized comparators
- Preliminary topline immune responses for all three vaccine
candidates were robust
- Additional details found here
- Serum Institute of India has
received authorizations in Ghana
and Nigeria for R21/Matrix-M
adjuvanted malaria vaccine
-
- Vaccine was developed by Jenner Institute, University of Oxford, and formulated with our
proprietary Matrix-M adjuvant
First Quarter 2023 Financial Results
- Total revenue: Due to an emerging seasonal demand
pattern for COVID vaccines, total revenue for the first quarter of
2023 was $81 million compared to
$704 million in the same period in
2022. First quarter 2023 product sales include a $65 million revenue reversal associated with
doses delivered in 2022 that are scheduled for future
replacement.
- Cost of sales for the first quarter of 2023 were
$34 million, compared to $15 million in the same period in 2022. This
includes $20 million related to
excess, obsolete, or expired inventory and losses on firm purchase
commitments.
- Research and development expenses (R&D) for the
first quarter of 2023 were $247
million, compared to $383
million in the same period in 2022. The decrease was
primarily due to a reduction in clinical and manufacturing
spend.
- Selling, general and administrative expenses (SG&A)
for the first quarter of 2023 were $113
million, compared to $96
million for the same period in 2022. The increase is related
to expansion of our commercial sales operations in Europe and commercial investment in
preparation for the Fall 2023 vaccination campaign, partially
offset by certain cost containment measures to reduce our operating
spend.
- Net loss for the first quarter 2023 was $294 million, compared to a net income of
$203 million in the same period in
2022.
- Cash, cash equivalents, and restricted cash were
$637 million as of March 31, 2023, compared to $1.3 billion as of December 31, 2022. During the first quarter of
2023 Novavax reduced its outstanding current liabilities by
$541 million, including funding the
maturity of the $325 million
convertible debt in January
2023.
Financial Framework and Guidance
Full Year 2023 Guidance
Revenue
|
Full Year 2023
Guidance
|
Total
Revenue1
|
Between $1.4 billion
and $1.6 billion
|
Grant
Revenue
|
Between $340 million
and $360 million
|
Product
Sales2
|
Between $1.06 billion
and $1.24 billion
|
- Combined R&D and SG&A expenses of between $1.3 billion and $1.4
billion, as adjusted to exclude one-time restructuring
costs3
- Secured a $100 million payment in
the second quarter of 2023 related to a negotiated APA to reduce a
portion of committed dose deliveries. This payment is excluded from
full year 2023 sales guidance
1.
|
Total revenue
includes Product Sales, Grants and Royalties/Other
|
2.
|
APAs based on 2023
committed dose delivery schedules of approximately $800 million and
U.S. market sales, subject to updated variant manufacturing and
regulatory approvals
|
3.
|
Novavax expects to
record a restructuring charge of $10 million to $15 million
related to employee severance and benefit costs, the majority of
which are expected to be incurred in the second quarter of 2023,
and is evaluating the anticipated cost related to the consolidation
of facilities and infrastructure
|
Full year 2023 R&D expense guidance excludes the potential
costs associated with a Phase 3 Flu/CIC program. We plan to
evaluate our positive Phase 2 Flu/CIC results announced today to
frame our options to advance and finance this program via strategic
collaborations and/or available financing alternatives.
2023 Liability Management
- Reduced outstanding current liabilities in the first quarter of
2023 by $541 million, including
funding the maturity of the $325
million convertible debt in January
2023
- During April 2023, addressed
additional liabilities totaling $140
million, including a $27
million payment to resolve the Par arbitration and a
$113 million payment to the UK
government per the terms of our APA
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) 883-0383 (Domestic) or (412) 902-6506
(International). Participants will be prompted to request to join
the Novavax, Inc. call. The passcode entry number is 3370620. A
replay of the conference call will be available starting at
11:30 a.m. ET on May 9, 2023 until 11:59
p.m. ET on May 16, 2023. To
access the replay by telephone, dial (877) 344-7529 (Domestic) or
(412) 317-0088 (International) and use passcode 1969560.
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 August 7, 2023.
Trade Name in the U.S.
The trade name Nuvaxovid™ has not yet been approved by the U.S.
Food and Drug Administration.
About Novavax
Novavax, Inc. (Nasdaq: NVAX) promotes improved health by
discovering, developing and commercializing innovative vaccines to
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,
influenza, and COVID and influenza combined. Please visit
novavax.com and LinkedIn for more information.
Use of Non-GAAP Measures
The Company has used a non-GAAP financial measure in this press
release, which is R&D and SG&A expense, as adjusted to
exclude one-time restructuring costs including a restructuring
charge of $10 million to $15 million related to employee severance and
benefit costs. Non-GAAP financial measures refer to financial
information adjusted from financial measures prepared in accordance
with accounting principles generally accepted in the United States (GAAP). The Company believes
that the presentation of this adjusted financial measure is useful
to investors as it provides additional information on comparisons
between periods by excluding certain items that affect overall
comparability. The Company uses this non-GAAP financial measure for
business planning purposes and to consider underlying trends of its
business, and believes presenting this measure also provides useful
information to investors and others for understanding and
evaluating trends in the Company's expenses in the same manner as
the Company's management. Non-GAAP financial measures should be
considered in addition to, and not as an alternative for, the
Company's reported results prepared in accordance with GAAP. The
use of this non-GAAP financial measure may differ from similar
measures reported by other companies and may not be comparable to
other similarly titled measures. The company is unable to
reconcile this forward-looking non-GAAP financial measure to the
most directly comparable GAAP measure without unreasonable efforts
because the company is currently unable to predict with a
reasonable degree of certainty the type and extent of the
anticipated costs related to the consolidation of facilities and
infrastructure that would be expected to impact GAAP measure for
the period but would not impact the non-GAAP measure.
Forward-Looking Statements
Statements herein relating to the future of Novavax, its near
term priorities including delivering an updated, competitive COVID
vaccine for the 2023 Fall vaccination season, reducing spend,
extending its cash runway and operating efficiently, the amount and
impact of Novavax's global restructuring and cost reduction plan,
its operating plans, objectives and prospects full year 2023
financial guidance, its future financial or business performance,
conditions or strategies, its partnerships, the timing of clinical
trial results, the ongoing development of NVX-CoV2373, including
Part 2 of the Phase 3 strain change study, the CIC investigational
vaccine candidate, the scope, timing and outcome of future and
pending regulatory filings and actions, including expected U.S.
Biologics License Application filing in second half of 2023, future
deliveries under APAs and Novavax's ability to advance and finance
a Phase 3 Flu/CIC program via strategic collaborations and / or
financing alternatives 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, challenges satisfying, alone or together with partners,
various safety, efficacy, and product characterization
requirements, including those related to process qualification and
assay validation, necessary to satisfy applicable regulatory
authorities; difficulty obtaining scarce raw materials and
supplies; resource constraints, including human capital and
manufacturing capacity, on the ability of Novavax to pursue planned
regulatory pathways; unanticipated challenges or delays in
conducting clinical trials; challenges meeting contractual
requirements under agreements with multiple commercial,
governmental, and other entities; manufacturing delays or
challenges, including as a result of the timing of the anticipated
regulatory requirements for the Fall 2023 vaccination season; 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 our global
restructuring and cost reduction plan; challenges in obtaining
commercial adoption of NVX-CoV2373 or a COVID variant
strain-containing formulation; 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, 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
March
31,
|
|
|
2023
|
|
2022
|
|
|
(unaudited)
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
Product
sales
|
$
(7,457)
|
|
$
585,628
|
|
Grants
|
87,379
|
|
99,301
|
|
Royalties
and other
|
1,029
|
|
19,042
|
|
Total
revenue
|
80,951
|
|
703,971
|
|
Expenses:
|
|
|
|
|
Cost of
sales
|
34,086
|
|
15,204
|
|
Research
and development
|
247,101
|
|
383,483
|
|
Selling,
general and administrative
|
112,532
|
|
95,992
|
|
Total
expenses
|
393,719
|
|
494,679
|
|
Income (loss) from
operations
|
(312,768)
|
|
209,292
|
|
Interest
expense
|
(4,316)
|
|
(4,876)
|
|
Other income
(expense)
|
24,362
|
|
1,654
|
|
Income (loss) before
income tax expense
|
(292,722)
|
|
206,070
|
|
Income tax
expense (benefit)
|
1,183
|
|
2,662
|
|
Net income
(loss)
|
$
(293,905)
|
|
$
203,408
|
|
Net income (loss) per
share
|
|
|
|
|
Basic
|
$
(3.41)
|
|
$
2.66
|
|
Diluted
|
$
(3.41)
|
|
$
2.56
|
|
Weighted average number
of common shares outstanding
Basic
|
86,158
|
|
76,457
|
|
Diluted
|
86,158
|
|
80,711
|
|
SELECTED
CONSOLIDATED BALANCE SHEET DATA (in
thousands)
|
|
|
March
31,
2023
|
|
December
31,
2022
|
|
(unaudited)
|
|
|
|
|
Cash and cash
equivalents
|
$
624,950
|
|
$
1,336,883
|
|
Total restricted
cash
|
11,993
|
|
11,962
|
|
Total current
assets
|
971,028
|
|
1,703,391
|
|
Working
capital
|
(947,830)
|
|
(756,553)
|
|
Total assets
|
1,542,699
|
|
2,258,679
|
|
Convertible notes
payable*
|
166,857
|
|
491,347
|
|
Total stockholders'
equity (deficit)
|
(895,582)
|
|
(634,078)
|
|
|
|
|
*
|
Included in noncurrent
liabilities as of March 31, 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.