- Second quarter total revenue of $424
million and net income of $58
million
- Executed new strategic partnering agreement with SK
bioscience, including an equity investment of $85 million in Novavax at $13.00 per share, a 59% premium to the 90-day
VWAP
- Negotiated up to $350 million
in 2023 payments under amended Canada APA
- Initiated FDA submission for approval of our updated XBB
COVID vaccine for the 2023 fall vaccination season and reiterated
plan to be in market by September; submissions to EMA and
Health Canada in the coming weeks
- Company to host conference call today at 8:30 a.m. ET
GAITHERSBURG, Md., Aug. 8, 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 second quarter ended
June 30, 2023.
"During the first half of 2023, Novavax has been focused on
execution, making significant progress on all three of our key
priorities. We have initiated the filing for authorization of our
updated XBB COVID vaccine in the U.S., with submissions in the
European Union and Canada to
follow and we are manufacturing at commercial scale in support of
our plan to deliver our vaccine on time for the fall season," said
John C. Jacobs, President and Chief
Executive Officer, Novavax. "I am also pleased to report that we
have now reduced our current liabilities by over $1 billion this year and we recorded $424 million in total revenue for the second
quarter. We continue to work towards deriving additional value from
our pipeline and technology and will be advancing our
COVID-Influenza Combination vaccine candidate through the next
stage gates and towards late-stage development."
Second Quarter 2023 and Recent Highlights
During the second quarter, the company continued to make
progress on our three key priorities for 2023.
Priority #1: Deliver an Updated COVID Vaccine for the
Upcoming 2023 Fall Vaccination Season
During the second quarter, Novavax continued preparations to
deliver our updated XBB COVID vaccine for the 2023 fall season. In
most of our key target markets, including the U.S., the Novavax
vaccine, if authorized, would be the only non-mRNA protein-based
XBB COVID vaccine available.
- Continue to prepare to deliver our updated XBB COVID vaccine
for the fall, consistent with recommendations from the U.S. Food
and Drug Administration (FDA), European Medicines Agency (EMA) and
World Health Organization
-
- Initiated filing in the U.S., with submissions in the European
Union (EU) and Canada to follow in
the coming weeks
- Manufacturing ongoing at commercial scale to supply global
markets
- Fully deployed commercial teams across the U.S., EU and other
select markets, with executed contracts to support market
access
- Received first Full Marketing Authorization in the EU for
Nuvaxovid™ as a primary series in individuals aged 12 and older and
as a booster in adults aged 18 and older
- Initiated rolling submission of U.S. Biologics License
Application (BLA) for full approval of the Novavax COVID-19
Vaccine, Adjuvanted for adults and adolescents aged 12 through
18
Priority #2: Reduce our Rate of Spend, Manage our Cash
Flow and Evolve our Scale and Structure
Novavax has made significant progress towards strengthening our
financial position. We continued to deliver on our commitments to
reduce our spend, address our one-time liabilities, and improve our
cash flow, with the goal of building a solid financial foundation
for long-term value creation.
- Reduced current liabilities by $323
million during the second quarter and by $864 million in the first half of 2023. SK
bioscience agreement announced today further reduces current
liabilities by $195 million for a
total reduction of over $1 billion in
2023
- Reduced combined research and development (R&D) and
selling, general and administrative expenses (SG&A) to
$313 million in the second quarter of
2023, compared to $398 million in the
same period in 2022
- On track with our global restructuring and cost reduction plan
and reiterate target to reduce our annual combined R&D and
SG&A expenses by approximately 20% to 25% in 2023 versus 2022,
and by approximately 40% to 50% in 2024 versus 2022
- Executed amended Canada Advance Purchase Agreement (APA) in
June 2023, outlining an updated
delivery schedule for Nuvaxovid™ and negotiated up to $350 million in 2023 payments
Priority #3: Leverage our Technology Platform, our
Capabilities and our Portfolio of Assets to Drive Additional Value
Beyond Nuvaxovid Alone
Novavax continued to leverage our pipeline and technology
platform with the intent of delivering long-term growth and
protecting global health.
- Based on the ongoing receipt and analysis of our Phase 2 safety
and immunogenicity results for COVID-Influenza Combination (CIC),
decision to make strategic stage gate investments in 2023 and 2024
to advance our co-formulated CIC vaccine candidate in preparation
for late-stage development
- Continued to advance partnerships with Matrix-M adjuvant
technology
-
- In partnership with Oxford
University and Serum Institute of India, secured authorizations in Ghana, Nigeria and Burkina
Faso for R21/Matrix-M malaria vaccine leveraging our
Matrix-M adjuvant technology
- Announced partnership with Bill & Melinda Gates Medical
Research Institute to provide our Matrix-M adjuvant for use in
preclinical vaccine research
Corporate Highlights
- Executed new agreements with SK bioscience, evolving our
relationship from a contract manufacturing organization arrangement
to a strategic business partnership, including:
-
- The extension of exclusive commercial rights in South Korea until February 2029 and non-exclusive rights in
Thailand and Vietnam until June
2028 and provides for a $4
million milestone to Novavax, as well as royalties on future
product sales
- An $85 million equity investment
by SK bioscience in Novavax common stock at $13.00 per share, reflecting a 59% premium to the
volume weighted average price (VWAP) over the 90 days prior to
August 8, 2023
- The settlement of $195 million in
manufacturing liabilities for $154
million
- In total under these agreements, Novavax will issue 6.5 million
common shares and pay net cash of $65
million to SK bioscience
- Appointed Ian Watkins as new
Chief Human Resources Officer, bringing years of experience in
publicly traded biotechnology companies to further strengthen our
company and culture
Second Quarter 2023 Financial Results
- Total revenue for the second quarter of 2023 was
$424 million, compared to
$186 million in the same period in
2022
- Cost of sales for the second quarter of 2023 were
$56 million, compared to $271 million in the same period in 2022. This
includes $2 million related to
excess, obsolete or expired inventory and losses on firm purchase
commitments as compared to $255
million in the same period in 2022
- R&D expenses for the second quarter of 2023 were
$219 million, compared to
$290 million in the same period in
2022. The decrease was primarily due to a reduction in clinical and
manufacturing spend
- SG&A expenses for the second quarter of 2023 were
$94 million, compared to $108 million for the same period in 2022. The
decrease was primarily due to a reduction in spend by corporate
support functions as outlined in the global restructuring and cost
reduction plan announced in May
2023
- Net income for the second quarter 2023 was $58 million, compared to a net loss of
$510 million in the same period in
2022
- Cash, cash equivalents and restricted cash were
$518 million as of June 30, 2023, compared to $637 million as of March
31, 2023, and $1.3 billion as
of December 31, 2022. Through sales
of Novavax common stock pursuant to at-the-market offerings during
the second quarter of 2023, Novavax raised net proceeds of
$68 million
Financial Framework
Novavax is updating its Full Year 2023 Financial Guidance and
expects to achieve the following objectives:
Full Year 2023
Guidance
|
|
$ in
millions
|
Updated
(as of August 8,
2023)
|
Prior
(as of May 9,
2023)
|
Total
Revenue1
|
$1,300 -
$1,500
|
$1,400 -
$1,600
|
Grant
Revenue
|
$340 -
$360
|
$340 -
$360
|
Product
Sales1
|
$960 -
$1,140
|
$1,060 -
$1,240
|
|
|
|
Combined R&D and
SG&A2
|
$1,300 -
$1,400
|
$1,300 -
$1,400,
as
adjusted
|
|
Updated full year 2023 R&D expense guidance includes stage
gate investments to advance our co-formulated CIC vaccine in
preparation for late-stage development
- Updated full year 2023 guidance reflects APAs based on 2023
committed dose delivery schedules of approximately $700 million and U.S. market sales, subject to
updated variant manufacturing and regulatory approvals. $100
million of the up to $350 million in
cash payments under the June 2023
Canada APA amendment were included in the prior FY 2023 revenue
guidance.
- Prior full year 2023 adjusted combined R&D and SG&A
expenses excluded one-time restructuring costs for which
$15 million was recorded in the
second quarter 2023. Updated full year 2023 adjusted combined
R&D and SG&A expenses includes these costs.
2023 Canada APA Amendments
The Company has negotiated up to $450
million in 2023 cash payments under the Canada APA related
to the forfeiture of committed doses
- A $100 million cash payment under
the April APA amendment was received in the second quarter of
2023
- Up to $350 million in cash
payments under the June APA amendment
-
- The first $175 million payment
was received in July 2023
- The second $175 million payment
is contingent and payable upon delivery of vaccine in the second
half of 2023
The cash payments under the amended Canada APA and related
deferred revenue are expected to be recognized ratably as product
sales between 2023 and 2025 as the remaining obligations are met
under the amended Canada 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 1209328. A
replay of the conference call will be available starting at
11:30 a.m. ET on August 8, 2023, until 11:59 p.m. ET on August
15, 2023. To access the replay by telephone, dial (877)
344-7529 (Domestic) or (412) 317-0088 (International) and use
passcode 2287018.
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 November 6, 2023.
Trade Name in the U.S.
The trade name Nuvaxovid has not yet been approved by the U.S.
FDA.
Securities Private Placement
The securities sold in the above referenced transaction do not
involve a public offering and have not been registered under the
Securities Act of 1933, as amended, and may not be offered or sold
in the United States except
pursuant to an effective registration statement or an applicable
exemption from the registration requirements. This press release
shall not constitute an offer to sell or the solicitation of an
offer to buy the securities, nor shall there be any sale of the
securities in any state or other jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to the registration
or qualification under the securities laws of any such state or
other jurisdiction.
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 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 in its prior full year 2023
guidance. 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. 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.
Forward-Looking Statements
Statements herein relating to the future of Novavax, its near
term priorities including delivering an updated, COVID vaccine for
the 2023 fall vaccination season, reducing rate of spend, managing
cash flow and evolving its scale and structure, 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 ongoing development
of NVX-CoV2373, the CIC investigational vaccine candidate and
influenza vaccine candidate, the scope, timing and outcome of
future and pending regulatory filings and actions, including
expected U.S. BLA submissions for NVX-CoV2373 and submissions in
the U.S., European Union and Canada with respect to the Company's updated
XBB COVID vaccine, future deliveries under APAs and Novavax's
ability to advance and finance its CIC/Influenza 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, assay validation, and stability
testing, 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;
challenges or delays in conducting clinical trials or obtaining
regulatory authorization for our product candidates, including for
our monovalent XBB COVID vaccine in time for the fall 2023
vaccination season, or for future COVID variant strain changes;
challenges meeting contractual requirements under agreements with
multiple commercial, governmental, and other entities;
manufacturing, distribution, or export delays or challenges,
including the requirement to obtain approval from the drug
licensing body in India for the
distribution of Novavax's updated XBB COVID vaccine; Novavax's
exclusive dependence on Serum for co-formulation and filling, and
PCI for finishing NVX-CoV2373 and the impact of any delays or
disruptions in these suppliers' operations on the delivery of
customer orders; 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 our updated XBB
COVID vaccine, NVX-CoV2373 or any 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 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
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Product
sales
|
$
285,163
|
|
$
55,455
|
|
$
277,706
|
|
$
641,083
|
Grants
|
137,079
|
|
107,774
|
|
224,458
|
|
207,075
|
Royalties
and other
|
2,184
|
|
22,696
|
|
3,213
|
|
41,738
|
Total
revenue
|
424,426
|
|
185,925
|
|
505,377
|
|
889,896
|
Expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
55,777
|
|
271,077
|
|
89,863
|
|
286,281
|
Research
and development
|
219,475
|
|
289,648
|
|
466,576
|
|
673,131
|
Selling,
general and administrative
|
93,717
|
|
108,160
|
|
206,249
|
|
204,152
|
Total
expenses
|
368,969
|
|
668,885
|
|
762,688
|
|
1,163,564
|
Income (loss) from
operations
|
55,457
|
|
(482,960)
|
|
(257,311)
|
|
(273,668)
|
Interest
expense
|
(3,124)
|
|
(6,234)
|
|
(7,440)
|
|
(11,110)
|
Other income
(expense)
|
5,532
|
|
(19,873)
|
|
29,894
|
|
(18,219)
|
Income (loss) before
income tax expense
|
57,865
|
|
(509,067)
|
|
(234,857)
|
|
(302,997)
|
Income tax
expense (benefit)
|
(143)
|
|
1,418
|
|
1,040
|
|
4,080
|
Net income
(loss)
|
$
58,008
|
|
$
(510,485)
|
|
$
(235,897)
|
|
$
(307,077)
|
Net income (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
$
0.65
|
|
$
(6.53)
|
|
$
(2.69)
|
|
$
(3.97)
|
Diluted
|
$
0.58
|
|
$
(6.53)
|
|
$
(2.69)
|
|
$
(3.97)
|
Weighted average number
of common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
89,362
|
|
78,143
|
|
87,769
|
|
77,305
|
Diluted
|
104,065
|
|
78,143
|
|
87,769
|
|
77,305
|
SELECTED
CONSOLIDATED BALANCE SHEET DATA
|
(in
thousands)
|
|
|
June
30,
2023
|
|
December
31,
2022
|
|
(unaudited)
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
505,912
|
|
$
1,336,883
|
Total restricted
cash
|
12,029
|
|
11,962
|
Total current
assets
|
1,127,554
|
|
1,703,391
|
Working
capital
|
(468,701)
|
|
(756,553)
|
Total assets
|
1,685,048
|
|
2,258,679
|
Convertible notes
payable*
|
167,248
|
|
491,347
|
Total stockholders'
equity (deficit)
|
(754,519)
|
|
(634,078)
|
|
|
|
*Included in noncurrent
liabilities as of June 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.