Novavax Reports First Quarter 2024 Financial Results and Operational Highlights
Novavax reported its financial results and operational highlights for Q1 2024, including a co-exclusive licensing agreement with Sanofi for COVID-19 vaccines, a Phase 3 trial for a combination flu-COVID-19 vaccine, and a standalone influenza vaccine. The agreement holds potential multi-billion dollar revenue opportunities for Novavax, including upfront payments, equity investments, milestones, and royalties. Novavax also reduced liabilities by $831 million and achieved $94 million in revenue for Q1 2024. The company's financial position improved, with reduced losses and cash reserves of $496 million as of March 31, 2023.
Co-exclusive licensing agreement with Sanofi presents multi-billion dollar revenue opportunities for Novavax.
Reduction of liabilities by $831 million during Q1 2024.
Achieved total revenue of $94 million in Q1 2024.
Improved financial position with reduced losses and $496 million in cash reserves as of March 31, 2023.
R&D expenses for Q1 2024 were $93 million, indicating ongoing high costs.
Net loss for Q1 2024 was $148 million, although an improvement from the previous year.
Certain costs related to excess inventory and unutilized capacity impacted cost of sales.
Insights
Novavax's partnership with Sanofi marks a momentous financial milestone with substantial economic implications. The upfront payment of
However, the challenge lies in the execution and the market uptake of the new vaccines, including the COVID-19-Influenza combination. Additionally, investors should be aware of the long-term financial commitments and the pressure to deliver on the partnership terms. It is notable that Novavax's liabilities have been significantly reduced by
The projected revenue increase from
The strategic partnership underscores a positive market development for Novavax. The Matrix-MTM adjuvant technology is a significant asset and the collaboration to develop multiple new vaccines could potentially expand market reach and establish Novavax as a key player in the vaccine industry. However, the competitive landscape for COVID-19 vaccines is fierce and dynamic, with demand potentially declining as the pandemic phase transitions to endemicity. Therefore, investor optimism should be cautiously tempered with realistic expectations about market conditions.
Moreover, while the expansion into the standalone influenza vaccine and the combined COVID-19-Influenza vaccine increases the addressable market, the timeline to market and regulatory hurdles remain non-negligible risks. The market will closely watch the Phase 3 trials and regulatory interactions for signs of success or potential challenges ahead.
The legal structures involved in the Novavax-Sanofi deal — co-exclusive licensing agreements and milestones linked to product development — are indicative of Novavax's strong IP positioning. The equity investment by Sanofi suggests a vote of confidence in Novavax's long-term viability. From a legal standpoint, the collaboration has potentially strengthened Novavax's regulatory standing as it benefits from Sanofi's established global presence and regulatory expertise, especially in navigating the Emergency Use Authorization pathways and obtaining full market approvals.
- Announces co-exclusive licensing agreement with Sanofi to co-commercialize COVID-19 vaccine, develop novel COVID-19-Influenza combination vaccines and develop multiple new vaccines utilizing Novavax's Matrix-MTM adjuvant
- This agreement represents a potential multi-billion dollar revenue opportunity for Novavax including:
$500 million - Approximately
$70 million - Up to
$700 million - Up to
$200 million
- Announces addition of standalone influenza vaccine to Phase 3 COVID-19-Influenza Combination vaccine trial, which is on-track to initiate second half of 2024, with potential 2026 launch for both candidates
- Reduced current liabilities by an additional
$831 million - Achieved total revenue in Q1 2024 of
$94 million - Novavax removes going concern notice
- Company to host conference call today at 8:30 a.m. ET
Earlier today, Novavax and Sanofi (NASDAQ: SNY) announced that they have entered into a co-exclusive licensing agreement. The terms of the agreement include: a co-exclusive license to co-commercialize Novavax's current stand-alone adjuvanted COVID-19 vaccine worldwide (except in countries with existing Advance Purchase Agreements [APAs] and in
"Today we announce the beginning of an exciting new chapter for Novavax with the launch of a strategically important partnership with one of the world's leading vaccine companies. We believe the combined strength of Novavax and Sanofi will enable us to better fulfill our mission of developing and improving access to life-saving vaccines," said John C. Jacobs, President and Chief Executive Officer, Novavax. "I am proud of the progress our Company has made this quarter as we continue to advance our COVID-19 vaccine for the upcoming 2024-2025 vaccination season and plan for the launch of our Phase 3 CIC and standalone influenza program in the second half of this year."
The agreement is further validation of Novavax's technology platform and provides significant opportunity to drive value creation and benefit global public health. It strengthens Novavax's balance sheet and cash flow position, providing the opportunity to focus more on research and development and pipeline expansion to accelerate growth and generate long-term value for shareholders.
Sanofi Agreement Highlights
Financial Highlights
- This agreement represents a potential multi-billion dollar revenue opportunity for Novavax.
- The total value of near-term upfront payments, Sanofi's equity investment and potential milestones associated with Nuvaxovid™ sales and the development of Sanofi's flu-COVID-19 combination vaccine equate to approximately
$1.3 billion - Novavax will receive an upfront payment of
$500 million - Novavax will receive today an equity investment of approximately
$70 million 4.9% minority interest. - Novavax is eligible to receive up to
$350 million - Novavax is eligible to receive up to
$350 million
- Novavax will receive an upfront payment of
- In addition, Novavax is eligible to receive royalties associated with the ongoing sales of Nuvaxovid and Sanofi's flu-COVID-19 combination vaccine and any other combination vaccines Sanofi may develop including Nuvaxovid.
- And finally, 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
$200 million
Additional Highlights
- Novavax is eligible for cost reimbursement by Sanofi of certain R&D and medical affairs costs, select technology transfer costs and supply of COVID-19 and Matrix-M adjuvant.
- Sanofi will be solely responsible for the development and commercialization of any novel flu-COVID-19 combination product containing a Sanofi flu vaccine, and any other combination products they may develop utilizing Nuvaxovid and any other new vaccines they develop utilizing the Matrix-M adjuvant.
- Outside of the collaboration, each party may develop and commercialize their own COVID-19-Influenza combination vaccines and adjuvanted products at their own cost.
First Quarter 2024 and Recent Highlights
During the first quarter, Novavax continued executing against its three key priorities for 2024.
Priority #1: Deliver an Updated COVID-19 Vaccine for the 2024-2025 Vaccination Season
U.S. Market:
- Updated protein-based COVID-19 vaccine to JN.1 with anticipated pre-filled syringe presentation.
- Completed the submission of the Biologics License Application for Novavax's COVID-19 vaccine with the
U.S. Food and Drug Administration (FDA). - Aligned with the FDA on pathway for Emergency Use Authorization for updated COVID-19 vaccine for the 2024-2025 vaccination season, with the intent of facilitating product availability at the beginning of the season.
- Advanced retail pharmacy contract negotiations for the 2024-2025 vaccination season.
Global Markets:
- Delivered doses of Nuvaxovid XBB.1.5 vaccine to
Europe and for distribution by the Taiwan Centers for Disease Control. - Received marketing authorization from the
United Kingdom's (U.K. ) Medicines and Healthcare products Regulatory Agency for Nuvaxovid XBB.1.5 in individuals aged 12 and older in January and progressed preparations for participation in theU.K. spring campaign for private healthcare providers. - Granted full approval from
Singapore's Health Sciences Authority for Nuvaxovid XBB.1.5 for active immunization to prevent COVID-19 in individuals aged 12 and older.
Priority #2: Launch Phase 3 trial of CIC and Stand-alone Influenza Program
Novavax remained focused on leveraging its technology platform, including its proprietary Matrix-M adjuvant, to expand its pipeline with CIC and stand-alone influenza vaccine candidates.
- Made strategic decision to add a stand-alone influenza arm to the Phase 3 trial and to focus on individuals at higher risk by enrolling adults aged 60 and older for both the stand-alone influenza and CIC arms of the trial.
- On track to submit an investigational new drug application and initiate the pivotal Phase 3 trial for both CIC and stand-alone influenza vaccine candidates in the second half of 2024, with potential for accelerated approval and launch in 2026.
- Continued to optimize preclinical candidates, including a new approach to H5N1 pandemic bird flu vaccination, and expanded core technology for novel applications including mucosal vaccination and high-density nanoparticles.
Priority #3: Continue Evolution of Novavax, Further Reducing Operating Expenses
Novavax has made significant progress on its commitment to improve its financial position while maintaining the capabilities that support long-term value creation.
- On track with global restructuring and cost reduction plan, continued to transform the Company into a more lean and agile organization, with an approximately
50% reduction in combined R&D and SG&A expenses in the first quarter of 2024 compared to 2023. - Since December 31, 2022, reduced current liabilities by
$1.7 billion $831 million
First Quarter 2024 Financial Results
- Total revenue for the first quarter of 2024 was
$94 million $81 million - Cost of sales for the first quarter of 2024 was
$59 million $34 million $15 million $25 million - R&D expenses for the first quarter of 2024 were
$93 million $247 million $27 million - SG&A expenses for the first quarter of 2024 were
$87 million $113 million - Net loss for the first quarter 2024 was
$148 million $294 million - Cash, cash equivalents and restricted cash were
$496 million $584 million
Financial Framework
Novavax is updating its Full Year 2024 Financial Guidance and expects to achieve the following objectives:
Full Year 2024 Guidance
$ in millions | Prior (as of February 28, 2024) | Updated (as of May 10, 2024) |
Combined Revenue and Sanofi Agreement Payments | ||
Total Revenue1,2 | ||
Initial Sanofi Agreement Payments3 | ||
Combined R&D and SG&A |
1. | Total Revenue includes product sales and royalties and other revenue. |
2. | Full year 2024 guidance reflects APA expected dose delivery schedules of |
3. | Sanofi agreement initial payments include a non-refundable |
Total potential contract value for APAs outstanding, as of March 31, 2024, was over
Novavax is prepared to initiate an additional cost reduction program to reduce 2025 R&D plus SG&A expenses to below
Intends to further reshape the size and scope of global business operations to prioritize enabling Sanofi to successfully execute its commercial and development plans under the agreement, deliver on existing Novavax APAs and focus on creating value from R&D and business development.
Conference Call
Novavax will host its quarterly conference call today at 8:30 a.m. ET. To join the call without operator assistance, you may register and enter your phone number at https://emportal.ink/3VNP8J5 to receive an instant automated call back. You may also dial direct to be entered to the call by an operator. The dial-in numbers for the conference call are (888) 664-6383 (Domestic) or (+1) (416) 764-8650 (International). Participants will be prompted to request to join the Novavax, Inc. call. A replay of the conference call will be available starting at 11:30 a.m. EST on May 10, 2024, until 11:59 p.m. ET on May 17, 2024. To access the replay by telephone, dial (888) 390-0541 (Domestic) or (+1) (416) 764-8677 (International) and use passcode 414036 #.
A webcast of the conference call can also be accessed on the Novavax website at ir.novavax.com/events. A replay of the webcast will be available on the Novavax website until June 10, 2024.
Trade Name in the
The trade name Nuvaxovid™ has not been approved by the
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
Forward-Looking Statements
Statements herein relating to the future of Novavax, its mission, its near-term priorities including delivering an updated COVID-19 vaccine for the start of the 2024-2025 vaccination season in a pre-filled syringe presentation, launching a Phase 3 trial for CIC and stand-alone influenza in the second half of 2024, with possible combination vaccine and stand-alone influenza vaccine launch in 2026, and reducing operations expenses, including by initiating an additional cost reduction program, the anticipated timing of potential BLA approval for Novavax's prototype vaccine and EUA for Novavax's updated COVID-19 vaccine, potential royalties and milestones under the agreement with Sanofi, its operating plans, objectives and prospects, updated full year 2024 financial guidance, its future financial or business performance, conditions or strategies, and its ability to attain contract value under existing APAs 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 and Sanofi's ability to successfully implement its partnership, including the ability to transition key processes and effect technology transfers, Novavax's ability to successfully and timely manufacture, distribute, or market its updated COVID-19 vaccine including as a single dose vial or pre-filled syringe product presentation for the 2024-2025 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 2024-2025 vaccination season or for future COVID-19 variant strain changes, its CIC and stand-alone influenza vaccine candidate; manufacturing, distribution or export delays or challenges; Novavax's substantial 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 vaccine 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, constraints on Novavax's ability to pursue planned regulatory pathways, alone or with partners, in multiple jurisdictions simultaneously, leading to staggering of regulatory filings, and potential regulatory actions; 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 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, 2023 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 | ||||||
Three Months Ended March 31, | ||||||
2024 | 2023 | |||||
(unaudited) | ||||||
Revenue: | ||||||
Product sales | $ 82,324 | $ (7,457) | ||||
Grants | -- | 87,379 | ||||
Royalties and other | 11,531 | 1,029 | ||||
Total revenue | 93,855 | 80,951 | ||||
Expenses: | ||||||
Cost of sales | 59,209 | 34,086 | ||||
Research and development | 92,679 | 247,101 | ||||
Selling, general and administrative | 86,798 | 112,532 | ||||
Total expenses | 238,686 | 393,719 | ||||
Loss from operations | (144,831) | (312,768) | ||||
Interest expense | (4,111) | (4,316) | ||||
Other income | 3,654 | 24,362 | ||||
Loss before income taxes | (145,288) | (292,722) | ||||
Income tax expense | 2,262 | 1,183 | ||||
Net loss | $ (147,550) | $ (293,905) | ||||
Net loss per share | ||||||
Basic and Diluted | $ (1.05) | $ (3.41) | ||||
Weighted average number of common shares outstanding Basic and Diluted | 139,916 | 86,158 | ||||
SELECTED CONSOLIDATED BALANCE SHEET DATA | |||||
(in thousands) | |||||
March 31, 2024 | December 31, 2023 | ||||
(unaudited) | |||||
Cash and cash equivalents | $ 480,586 | $ 568,505 | |||
Total restricted cash | 15,350 | 15,305 | |||
Total current assets | 727,120 | 1,143,888 | |||
Working capital | (77,262) | (491,250) | |||
Total assets | 1,353,534 | 1,794,490 | |||
Convertible notes payable | 168,432 | 168,016 | |||
Total stockholders' deficit | (867,084) | (716,927) | |||
Contacts:
Investors
Erika Schultz
240-268-2022
ir@novavax.com
Media
Giovanna Chandler
202-709-5563
media@novavax.com
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SOURCE Novavax, Inc.
FAQ
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