Novavax Reports Second Quarter 2023 Financial Results and Operational Highlights
- Novavax reports total revenue of $424 million and net income of $58 million for the second quarter, indicating strong financial performance. The initiation of FDA submission for their updated XBB COVID vaccine suggests progress in their vaccine development. The new strategic partnering agreement with SK bioscience, including an equity investment of $85 million, enhances Novavax's financial position. The reduction of current liabilities by over $1 billion demonstrates improved financial stability. The company's focus on deriving additional value from their pipeline and technology indicates potential for future growth.
- None.
- Second quarter total revenue of
and net income of$424 million $58 million - Executed new strategic partnering agreement with SK bioscience, including an equity investment of
in Novavax at$85 million per share, a$13.00 59% premium to the 90-day VWAP - Negotiated up to
in 2023 payments under amended Canada APA$350 million - 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
"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
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
- 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) andCanada 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
during the second quarter and by$323 million in the first half of 2023. SK bioscience agreement announced today further reduces current liabilities by$864 million for a total reduction of over$195 million in 2023$1 billion - Reduced combined research and development (R&D) and selling, general and administrative expenses (SG&A) to
in the second quarter of 2023, compared to$313 million in the same period in 2022$398 million - 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% to25% in 2023 versus 2022, and by approximately40% to50% 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
in 2023 payments$350 million
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 inGhana ,Nigeria andBurkina 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 inThailand andVietnam until June 2028 and provides for a milestone to Novavax, as well as royalties on future product sales$4 million - An
equity investment by SK bioscience in Novavax common stock at$85 million per share, reflecting a$13.00 59% premium to the volume weighted average price (VWAP) over the 90 days prior to August 8, 2023 - The settlement of
in manufacturing liabilities for$195 million $154 million - In total under these agreements, Novavax will issue 6.5 million common shares and pay net cash of
to SK bioscience$65 million - 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
, compared to$424 million in the same period in 2022$186 million - Cost of sales for the second quarter of 2023 were
, compared to$56 million in the same period in 2022. This includes$271 million related to excess, obsolete or expired inventory and losses on firm purchase commitments as compared to$2 million in the same period in 2022$255 million - R&D expenses for the second quarter of 2023 were
, compared to$219 million in the same period in 2022. The decrease was primarily due to a reduction in clinical and manufacturing spend$290 million - SG&A expenses for the second quarter of 2023 were
, compared to$94 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$108 million - Net income for the second quarter 2023 was
, compared to a net loss of$58 million in the same period in 2022$510 million - Cash, cash equivalents and restricted cash were
as of June 30, 2023, compared to$518 million as of March 31, 2023, and$637 million 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$1.3 billion $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 | ||||
Grant Revenue | ||||
Product Sales1 | ||||
Combined R&D and SG&A2 | 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
and U.S. market sales, subject to updated variant manufacturing and regulatory approvals.$700 million $100 million of the up to in cash payments under the June 2023 Canada APA amendment were included in the prior FY 2023 revenue guidance.$350 million - Prior full year 2023 adjusted combined R&D and SG&A expenses excluded one-time restructuring costs for which
was recorded in the second quarter 2023. Updated full year 2023 adjusted combined R&D and SG&A expenses includes these costs.$15 million
2023 Canada APA Amendments
The Company has negotiated up to
- A
cash payment under the April APA amendment was received in the second quarter of 2023$100 million - Up to
in cash payments under the June APA amendment$350 million - The first
payment was received in July 2023$175 million - The second
payment is contingent and payable upon delivery of vaccine in the second half of 2023$175 million
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
The trade name Nuvaxovid has not yet been approved by the
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
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
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
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
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.
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