Q3 2021 Novavax Inc Earnings Call

November 4, 2021

[music].

Ladies and gentlemen, thank you for standing by and welcome to the Novavax third quarter 2021 financial results and operational highlights conference call. At this time all participants are in a listen only mode should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.

Operator: And thank you for standing by, and welcome to the Novavax Third Quarter 2021 Financial Results and Operational Highlights conference call. At this time, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After the speaker's presentation, there will be a question and answer session. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sylvia Taylor. You may begin.

After the speaker's presentation, there will be a question and answer session to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today Silvia Taylor you may begin.

Sylvia Taylor: Thanks very much. Good afternoon, everyone. And thank you all for joining us today for our call to discuss our third quarter 2021 operational highlights and financial results. A press release announcing our results is currently available on our website at Novavax.com, and an audio archive of this conference call will be available on our website later today. Joining me today is Stan Erck, President and CEO, who will discuss regulatory developments. Additionally, John Trizzino, Chief Commercial Officer and Chief Business Officer, will discuss our manufacturing and supply updates and the market opportunity for our COVID-19 vaccine, and Dr. Filip Dubovsky, Chief Medical Officer, will discuss our clinical developments. Jim Kelly, Chief Financial Officer and Treasurer, will also join today's call to discuss our financial results for the third quarter

Thanks, very much good afternoon, everyone and thank you all for joining us today for our call to discuss our third quarter 2021 operational highlights and financial results.

A press release announcing our results is currently available on our website at Novavax Dot Com and an audio archive of this conference call will be available on our website later today.

Joining me today is Stan <unk>, President and CEO, who will discuss regulatory updates. Additionally, John Trevino, Chief commercial officer, and Chief business Officer will discuss our manufacturing and supply updates and the market opportunity for our COVID-19 vaccine and Doctor fill up Kubacki, Chief Medical Officer will discuss our clinical development.

Jim Kelly, Chief Financial Officer, and Treasurer will also joined today's call to overview of our financial results for the third quarter. Additionally, Dr. Greg Glenn President of R&D will be available for the Q&A section at the end of today's call.

Sylvia Taylor: Additionally, Dr. Greg Glenn, President of R&D, will be available for the Q&A section at the end of today's call. Before we begin with prepared remarks, I need to remind you that we will be making forward-looking statements during this teleconference, which are based on our current expectations and beliefs. For example, statements relating to future financial or business performance, conditions, or strategy, including expectations regarding revenue, operating expenses, cash usage, clinical development of our vaccine candidates, timing of future regulatory filings and actions, and other anticipated milestones are forward-looking statements.

Before we begin with prepared remarks, I need to remind you that we will be making forward looking statements. During this teleconference, which are based on our current expectations and beliefs. For example statements relating to future financial or business performance conditions or strategy, including expectations regarding revenue operating expenses cash used.

<unk> clinical development of our vaccine candidates timing of future regulatory filings and actions and other anticipated milestones are forward looking statements.

Sylvia Taylor: Novavax cautions that these forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time, and actual results could differ materially from what is described in such statements. We encourage you to consult the risk factors discussed in our SEC filings for additional detail. I'd now like to hand the call over to Stan. For those of you following the accompanying slides, please turn to slide 3.

<unk> cautions that these forward looking statements are subject to numerous assumptions risks and uncertainties, which change overtime and actual results could differ materially from what is described in such statements. We encourage you to consult the risk factors discussed in our SEC filings for additional detail I'd now like to hand, the call over to Stan for those of you following the accompanying.

Slides, please turn to slide three Stan.

Thank you Sylvia and thanks to everyone for joining us today I'm excited to be here today, following an incredibly exciting week for Novavax. This past week, we reached a critical milestone.

Stan Erck: Thank you, Sylvia, and thanks to everyone for joining us today. I'm excited to be here today following an incredibly exciting week for Novavax. This past week we reached a critical milestone. We received our first authorization for a COVID-19 vaccine in India and Indonesia. Sorry. This milestone marks Novavax's first-ever approval of our protein-based COVID-19 vaccine. This approval is based on demonstrated strong efficacy and a favorable safety profile and represents a significant point in our transformation into a global commercial vaccine company.

Shaved our first authorization for a COVID-19 vaccine and India, Indonesia, sorry.

This milestone marks <unk> first ever approval of our protein based COVID-19 vaccine. This approval was based upon demonstrated strong efficacy.

A favorable safety profile and represents a significant point in our <unk>.

Since formation into a global commercial vaccine company.

Stan Erck: In addition to receiving our first authorization for 2373, we executed on our regulatory strategy for other global markets, with nine submissions now filed with regulatory agencies around the world. I would like to acknowledge the tremendous efforts made by the entire Novavax team. I would like to express my gratitude for our partners and clinical trial sites for their continued support of our mission, and importantly, thank each of our clinical trial participants for their vital contributions made during an unprecedented global pandemic. Only through these collaborative efforts were we able to achieve this significant progress.

In addition to receiving our first authorization for $23 73, we executed on our regulatory strategy and other global markets was nine submissions now filed with regulatory agencies around the world.

I would like to acknowledge the tremendous efforts made by the entire Novavax team.

Express my gratitude for our partners and clinical trial sites for their continued support of our mission and importantly, thank each of our clinical trial participants for their vital contributions made during an unprecedented global pandemic.

Only through these collaborative efforts, where we're able to achieve significant progress on today's call.

Stan Erck: On today's call, I will discuss these regulatory developments in more detail, as well as our key upcoming milestones. Other members of our team will discuss manufacturing and supply updates, updates on clinical developments, and financial results for the quarter. With that said, I'd like to begin today's call by discussing the tremendous progress we've made to date on the regulatory front. Please turn to slide 4.

I will discuss these regulatory developments in more detail as well as our key upcoming milestones.

Other members of our team will discuss manufacturing and supply updates updates on clinical developments and financial results for the quarter.

With that I'd like to begin today's call by discussing the tremendous progress we've made to date on the regulatory front. Please turn to slide four.

Stan Erck: We now have our first regulatory authorization in hand with the granting of emergency use authorization for 2373 by Indonesia. Our COVID-19 vaccine will be manufactured and marketed by Serum Institute of India under the brand name of Covovax. The first authorization of our COVID-19 vaccine exemplifies our commitment to equitable global access and will fill a vital need for Indonesia, which is the fourth most populous nation on earth and continues to work to procure sufficient vaccine for its population. We expect that initial shipments into Indonesia by serum will begin imminently.

We now have our first regulatory authorization authorization in hand, with the granting of emergency use authorization for $23 73 by Indonesia, Our COVID-19 vaccine will be manufactured and marketed by serum Institute of India under the brand name of Cove X. The first authorization of our COVID-19 vaccine exemplifies our.

Commitment to equitable global access and will fill a vital need for Indonesia, which is the fourth most populous nation on Earth and continues to work to procure sufficient vaccine for its population.

We expect initial shipments into Indonesia by serum will begin imminently.

Over the past week alone.

Stan Erck: We completed submissions to six regulatory agencies in the following markets. These include the UK's MHRA, Australia's Therapeutic Goods Administration, Health Canada, New Zealand's MedSafe, and the European Medicines Agency, or EMA, where we completed the submission of all documents required for regulatory review. Additionally, today we completed Novavax's rolling submission to the WHO for the Emergency Use Listing of 2376. Our regulatory packages have been harmonized across our filings, which initially leverage our manufacturing partnership with Serum Institute.

We completed submission to six regulatory agencies in the following markets. These include the U k's MH or a Australia's therapeutics goods administration.

Health Canada.

New Zealand's med safe and.

And the European Medicines agency or EMA, where we completed the submission of all documents required for regulatory review.

Additionally, today, we completed Novavax is rolling submission to the WH O for emergency use listing 23 73.

Our regulatory packages have been harmonized across our filings, which initially leverage our manufacturing partnership with serum Institute.

Stan Erck: In the near future, we will supplement our submissions with information from additional facilities across our global supply chain and are confident that our clinical and manufacturing data form a strong package for review by regulatory agencies. All these regulatory packages are in addition to those we previously announced for filings in India, the Philippines, and, of course, Indonesia, where we are already approved. These filings, and in particular, the WHO EUL listing, will enable our effort to provide doses for global equitable access. We remain diligent in our efforts to complete filings and additional geography shortly.

In the near future, we will supplement our submissions with information from additional facilities across our global supply chain and are confident that our clinical and manufacturing data form a strong package for review by regulatory agencies.

All of these regulatory packages are in addition to those we previously announced for filings in India, and the Philippines and of course, Indonesia, where we're already approved these filings and.

And in particular, the W. H O E U L listing will enable our effort to provide doses for global equitable access.

We remain diligent in our efforts to complete filings and additional geographies shortly in the U S. We expect to submit our complete regulatory package to the FDA before the end of this year.

Stan Erck: In the U.S., we expect to submit our complete regulatory package to the FDA before the end of this year. So, we've made tremendous progress on the regulatory front. We have harmonized all of our regulatory filing packages and submitted them to multiple agencies around the world, all to advance our shared goal of making our vaccine available as quickly and safely as possible to those in need. While we cannot predict how long regulatory agencies will take to approve these packages, we are prepared to work closely and diligently with all the regulatory authorities to facilitate approval.

So we've made tremendous progress on the regulatory front, we have harmonized. So all of our regulatory filing packages and submitted them to multiple agencies around the world all to advance our shared goal of making a vaccine available as quickly and safely as possible to those in need.

While we cannot predict how long regulatory agencies will take two to approve these packages. We are prepared to work closely indulgently with all the regulatory authorities to facilitate approval.

Stan Erck: I'd now like to turn it over to John, who will update us on 2373's anticipated role in the COVID-19 landscape and an overview of our supply commitments for 2373. Thank you, Stan.

I'd now like to turn it over to John who updates across our global supply chain twenty-three 70, threes anticipated roll in the COVID-19 landscape and an overview of our supply commitments for $23 73.

Thank you Stan moving to slide five.

John Joseph Trizzino: Moving to slide five. Today, we have a global infrastructure in place to support the manufacturing of 2373, with a supply chain of partners and Novavax-owned facilities spanning the world. This expansive global supply chain includes our partnership with Serum Institute, the world's largest vaccine manufacturer by volume, a state-of-the-art, wholly-owned manufacturing site in the Czech Republic, also known as Novavax CZ, and in Sweden, Novavax AB. Manufacturing at established vaccine makers including SK, Bioscience in South Korea, and Takeda in Japan, and additional manufacturing partners around the world that include Biofibri in Spain, Fujifilm in the U.S. and U.K., Mabeyon in Poland, and the National Research Council's Biologics Manufacturing Center in Canada.

Today, we have a global infrastructure in place to support the manufacturing of $23 73, with a supply chain of partners and Novavax owned facilities spanning the world.

This expansive global supply chain includes our partnership with serum Institute, the world's largest vaccine manufacturer by volume.

Our state of the art wholly owned manufacturing site and the Czech Republic.

So no there's no vaccine Z and in Sweden, Novavax E Bay.

Manufacturing at established vaccine makers, including SK Bioscience in South Korea, and Takeda in Japan.

And additional manufacturing partners around the world that include <unk> in Spain.

G film in the U S and U K, maybe on in Poland, and the National Research Council as Biologics manufacturing Center in Canada.

Over the third quarter, we executed a number of agreements to expand our supply chain.

John Joseph Trizzino: In the third quarter, we executed a number of agreements to expand our supply chain and Ready! Our Global Network for Commercialization, and these include collaborating with our partner Takeda to support their anticipated annual manufacturing capacity of 250 million doses of 2373, expanding our partnership with Serum Institute to manufacture 2373, and entering into an agreement with Maybion for the large-scale production of 2373 through the year 2026. We have made significant progress in mobilizing our supply chain over recent months. We are routinely producing high-quality products at commercial scale at multiple sites around the world.

And ready our global network for commercialization and these include collaborating with our partner Takeda to support their anticipated annual manufacturing capacity of 250 million doses of $23 73.

Expanding our partnership with serum Institute manufacturer at $23 73, and entering into an agreement with may be on for the large scale production of $23 73 through the year 2026.

We have made significant progress in mobilizing our supply chain over recent months, we are routinely producing high quality product at commercial scale at multiple sites around the world.

John Joseph Trizzino: As of the end of the third quarter, we achieved our goal of a manufacturing capacity of 100 million doses per month. Looking to the months ahead, we expect to achieve a manufacturing capacity of 150 million doses per month by the end of the fourth quarter, with the expectation that we will have a manufacturing capacity in excess of 2 billion annual doses in 2022, inclusive of capacity from our partner Serum Institute. This significant ramp-up in manufacturing will allow us to not only deliver on our current supply agreements but also support additional demand for our vaccine in 2022 and beyond. Now moving to slide 6.

As of the end of the third quarter, we achieved our goal of the manufacturing capacity of 100 million doses per month.

Looking to the months ahead, we expect to achieve in manufacturing capacity of 150 million doses per month by the end of the fourth quarter with the expectation that we will have a manufacturing capacity in excess of 2 billion annual doses in 2022 inclusive of capacity from our partner.

Serum Institute.

This significant ramp up in manufacturing will allow us to not only deliver on our current supply agreements, but also support additional demand for our vaccine in 2022 and beyond.

Now moving to slide six.

In addition to dramatically increasing the number of available doses to immunize. The world. We expect our vaccine will help address major obstacles during this pandemic and beyond.

John Joseph Trizzino: In addition to dramatically increasing the number of available doses to immunize the world, we expect our vaccine will help address major obstacles during this pandemic and beyond, including global distribution challenges and vaccine hesitancy. Storage at standard refrigeration temperatures allows our vaccine to use the existing vaccine supply chain and will increase access to hard-to-reach areas to improve vaccination rates across the globe. Recombinant protein vaccines are well understood and already in widespread use, having been used for decades.

Excluding global distribution challenges and vaccine hesitancy.

Storage at standard refrigeration temperatures allows our vaccine to use the existing vaccine supply chain and will increase access to hard to reach areas to improve vaccination rates across the globe.

Recombinant protein vaccines are well understood and already in widespread use haven't been used for decades, and Additionally, we have a robust clinical data package, demonstrating our vaccines favorable safety profile and strong immunogenicity and efficacy against multiple strains of the Corona virus.

John Joseph Trizzino: And additionally, we have a robust clinical data package demonstrating our vaccine's favorable safety profile and strong immunogenicity and efficacy against multiple strains of the coronavirus, all of which drives confidence in Novavax's vaccine's ability to help protect against the disease. Now turning to slide seven.

All of which drives confidence and the other vaccines vaccines ability to help protect against the disease.

Now turning to slide seven.

John Joseph Trizzino: As you can see on this slide, we have several supply and licensing agreements in place to ensure the widespread distribution of our vaccine, maintaining the mindset that access to vaccines should have no borders. Our vaccine network will support our supply commitments globally, including up to over 400 million doses of 2373 through bilateral supply agreements, including doses to the European Commission through our APA executed during the third quarter, and our joint commitment with Serum Institute of 1.1 billion doses for the COVAX facility.

As you can see on this slide we have several supply and licensing agreements in place to ensure the widespread distribution of our vaccine maintaining the mindset that access to vaccines should have no borders.

Our vaccine network will support our supply commitments globally, including.

Up to over 400 million doses of $23 73 through bilateral supply agreements, including doses to the European Commission through our E. P. A executed during the third quarter.

And our joint commitment with serum Institute of $1 1 billion doses for the Kodak facility.

Okay.

John Joseph Trizzino: In addition to supplying 2373 for primary vaccination, we expect the need for boosters will continue in the coming years, and we believe 2373 will play a very important role in this ongoing need. In the coming months, we will be able to support supply to additional markets in need of boosters across high, middle, and low-income countries. I'd now like to turn it over to Filip Dubovsky to discuss clinical developments across our pipeline during the third quarter. Thanks, John.

In addition to supplying $23 73 for primary vaccination, we expect the need for both boosters will continue in the coming years, and we believe $23 73 will play a very important role in this ongoing need.

Over the coming months, we will be able to support supply to additional markets in need of boosters of course high middle and low income countries.

I'd now like to turn it over to Filip to Vosky to discuss clinical developments across our pipeline during the third quarter.

Thanks, John Please turn to slide eight.

Filip Dubovsky: Please turn to slide 8. What's displayed here is a high-level 2373 clinical development plan. The safety, immunogenicity, and efficacy of our vaccine are derived from these studies, and all these studies are part of our common clinical regulatory package that's included in our harmonized regulatory file. This data has been provided to regulatory agencies on an ongoing basis and is currently being reviewed.

What's displayed here is the high level $23 73 clinical development plan, the safety Immunogenicity and efficacy of our vaccine is derived from these studies and all of these studies are part of our common clinical regulatory package that is included in our harmonized regulatory filings. This data has been provided to regulatory agencies on an ongoing basis and this current.

Being reviewed.

Lets skip ahead to slide nine.

This slide highlights our two pivotal phase III studies, the bulk of our safety and efficacy data is derived from these studies one remarkable feature of our vaccine is the consistent efficacy. We've seen the primary vaccine efficacy estimates are within one percentage point of each other and Thats. Despite the fact these studies were conducted at different times and different popular.

Filip Dubovsky: This slide highlights our two pivotal Phase III studies. The bulk of our safety and efficacy data is derived from these studies. One remarkable feature of our vaccine is the consistent efficacy we've seen. The primary vaccine efficacy estimates are within one percentage point of each other. And that's despite the fact these studies were conducted at different times in different populations during a time when different variants emerged. You can see a very high point estimate of efficacy, 96 to 100% against match strains. These are the strains whose sequences are most similar to that included in the vaccine.

<unk> during a time when different burdens emerged.

You can see a very high point estimate of efficacy, 96% to 100% against match streams. These are strange who sequences are most similar to that included in the vaccine.

Filip Dubovsky: Additionally, the vaccine works well against variants, not only against alpha, but, as we detailed earlier in our U.S. Phase 3 study, against all variants that circulated at that time. Importantly, we have complete protection against severe disease, hospitalization, and deaths in all of our efficacy studies, and that includes severe disease caused by variants. In the larger U.S. study, our vaccine efficacy was 100 percent against severe disease. And in the smaller U.K. and South African studies, although we couldn't calculate efficacy because of the low number of cases, all the severe cases were in the placebo group.

Additionally, the vaccine works well against variance not only against Alpha, but as we have detailed earlier in our U S phase III study against all bearings that circulated at that time.

Importantly, we have complete protection against severe disease hospitalization and deaths and all of our efficacy studies and that includes against severe disease caused by variance.

And the larger U S study, our vaccine efficacy was 100% against severe disease and in the smaller U K and South African studies, although we couldnt calculate an efficacy because of the low number of cases, all the severe cases were in the placebo group.

Filip Dubovsky: Finally, our efficacy in high-risk populations, such as the elderly and people with comorbid conditions, is almost identical to that of their overall population. So now, let's skip forward to slide 10, and talk about our progress in pediatrics. We expanded our U.S.

Finally, our efficacy in high risk populations, such as the elderly and people with comorbid conditions is almost identical to that of their overall population.

So now, let's skip forward to slide 10, and talk about our progress in pediatrics.

We expanded our U S phase three study to include over 2212 to 17 year olds. All the primary vaccination series have been delivered and in fact ultra and had been crossed over and safety and efficacy data collection is ongoing.

Filip Dubovsky: Phase 3 study to include over 2,200 12- to 17-year-olds. All the primary vaccination series have been delivered. And in fact, all the children have been crossed over, and safety and efficacy data collection is ongoing. We expect to have a regulatory package available for global submission in the first quarter. The subsequent pediatric clinical development plan has been agreed to by the FDA, MHRA, and EMA, and the studies will be initiated after this adolescent study reads out.

We expect to have a regulatory package available for global submission in the first quarter.

The subsequent pediatric clinical development plan has been agreed to by the F. D. A M HRA in EMA and the studies will be initiated after the adolescent study reads out.

Okay, let's move on to slide 11, and talk about boosting.

Filip Dubovsky: Okay, let's move on to slide 11 and talk about Boost.

In our phase II study in the U S and Australia, we boosted select cohorts at six months and 12 months and 12 months doses are just finishing up now we've previously disclosed that a single dose at six month can increase wild type utilization as well as the IGT antibody levels more than fourfold from their peak after receiving two doses.

Filip Dubovsky: In our Phase 2 study in the U.S. and Australia, we boosted select cohorts at 6 months and at 12 months, and the 12-month doses are just finishing up now. We've previously disclosed that a single dose at six months can increase wild-type neutralization as well as IgG antibody levels more than four-fold from their peak after receiving two doses. However, more importantly, using a stringent human ACE2 inhibition assay that measures functional antibodies, we demonstrated that our vaccine can boost responses to alpha, beta, and delta 6.6 to 10.8 fold over their peak.

However, more importantly, using a stringent human ace two inhibition assay. This measure functional antibodies, we demonstrated their vaccine can boost responses to alpha beta and Delta six six to $10 eight fold over their peak. We believe this is a strength of our vaccine likely linked to our adjuvant system, we saw excellent protection and the phase III.

To use against periods and recently Professor Snape from Oxford presented data that demonstrated the $23 73, as a specific strengths introducing cross Barrington <unk> responses.

Filip Dubovsky: We believe this is the strength of our vaccine, likely linked to our adjuvants. We saw excellent protection in the Phase III studies against variants, and recently, Professors Nate from Oxford presented data that demonstrated 2373 has a specific strength in inducing cross-variant neutralizing responses. In our South Africa Phase 2 study, we boosted all participants who initially received two doses of vaccine with a third dose at six months, and safety data is maturing.

In our South Africa Phase II study, we boosted all participants who initially received two doses of vaccine with a third dose at six months and that safety data is maturing.

The interesting to see data from the U S. Australia, along with the safety data from our South Africa study will serve as the basis of a regulatory filing supporting our boosting indication.

Finally, let's move to slide 12, and I want to update you on the progress of our Australia, nano flue or $23 73 combination study.

As you May know, we recently published in Antiflu Phase III study this quarter, Atlanta, I D and <unk>.

Filip Dubovsky: The emergency data from the U.S.-Australia, along with the safety data from our South Africa study, will serve as the basis of our regulatory filing supporting our boosting indication. Finally, let's move to slide 12, and I want to update you on the progress of our Australia NanoFlu 2373 combination study.

Study met its primary endpoints and we've been given a regulatory pathway for licensure by the FDA.

The current study the combination study was designed to define the dosage levels and vaccination schedule for our quadrivalent flu H E antigen combined with our Covid antigen.

Enrollment is complete all the first doses have been delivered in the second doses are being currently administered we believe that much like flu coupled with continued to circulate.

Filip Dubovsky: As you may know, we recently published a nanofluid phase 3 study.

Our fluid Covid vaccine sure even logic attributes that make the vaccine attractive and providing protection against drifted <unk> strains as well as COVID-19 variance.

Filip Dubovsky: published a nanofluid phase 3 study this quarter in Lancet ID, and the study met its primary endpoints, and we've been given a regulatory pathway for licensure by the FDA. The current study, the combination study, was designed to define the dosage levels in a vaccination schedule for our quadrivalent flu HA antigen combined with our COVID antigen. Enrollment is complete, all the first doses have been delivered, and the second doses are currently being administered. We believe that, much like the flu, COVID will continue to circulate. Our flu and COVID vaccines share immunologic attributes that make the vaccine attractive in providing protection against rifted flu strains as well as COVID variants.

This data will be available in the first half of 2022.

I'd like to now turn it over to Jim to provide an overview of our financial results for the third quarter Jim.

Thank you Philip.

Yeah, I'd like to start by saying, how happy I am to join the Novavax team at such an important moment and look forward to contributing to a rapid transition to becoming a global commercial company.

This afternoon, we announced our financial results for the third quarter of 2021, and I will provide you with a summary of the key highlights beginning on slide 13.

Today, we reported total revenue for the third quarter of 2021 of $179 million and ended the period with $1 9 billion in cash.

This means we are well capitalized since we advanced towards the commercial launch of $23 73.

James Kelly: This data will be available in the first half of 2022. I'd like now to turn it over to Jim to provide an overview of our financial results for the third quarter. Jim?

Turning to our financial results on Slide 14, we compare our third quarter 2021 results to the third quarter of 2020.

James Kelly: Thank you. Yeah, I'd like to start by saying how happy I am to join the Novavax team at such an important moment and look forward to contributing to our rapid transition to becoming a global commercial company. This afternoon, we announced our financial results for the third quarter of 2021, and I'll provide you with a summary of the key highlights beginning on slide 13. Today, we reported total revenue for the third quarter of 2021 of $179 million and ended the period with $1.9 billion in cash.

During the third quarter of 2021, we recorded a net loss of $322 million were $4 31 per share.

This compares to a loss of $197 million or $3 21 per share in the prior year.

Our third quarter 2021 revenue of $179 million and 14% growth compares to a $157 million in the prior year.

Our total revenue consists of government contract revenue grant revenue and royalty revenue.

Government contract revenue of $98 million reflects our funding from the U S government under operation more speed, which increased by $55 million in the period as we saw an increase in our $23 73 funded activities.

James Kelly: This means we are well capitalized as we advance towards the commercial launch of 2373. Turning to our financial results on slide 14, we compare our third quarter 2021 results to the third quarter of 2020. During the third quarter of 2021, we recorded a net loss of $322 million, or $4.31 per share. This compares to a loss of $197 million, or $3.21 per share, in the prior year.

Grant revenue of $41 million comes primarily from our separate funding agreement and fell by $73 million as that agreement is more oriented towards startup activities, which are now coming to a close.

Finally royalty revenue of $40 million reflects the novavax share of sales of our licensed partners. In this case SK Biosciences made sales of $23 73 antigen component to the crane government during the period.

James Kelly: Our third quarter 2021 revenue of $179 million, and 14% growth compares to $157 million in the prior year. Our total revenue consists of government contract revenue, grant revenue, and royalty revenue. Government contract revenue of $98 million reflects our funding from the U.S. government under Operation Warp Speed, which increased by $55 million in the period as we saw an increase in our 2373 funded activities. Grant revenue of $41 million comes primarily from our CEPI funding agreement and fell by $73 million as that agreement is more oriented towards startup activities which are now coming to a close.

Total expenses for the third quarter of 2021 were $486 million and are primarily weighted towards our R&D activities in support of $23 73, both in total for the quarter and are the primary cause of the year over year growth.

Following unexpected regulatory approval of our vaccine certain types of expenses that have previously been expensed as R&D will be capitalized to inventory and expense as cost of goods sold when product is delivered.

As noted earlier, we ended the third quarter with $1 9 billion in cash and cash equivalents as compared to just over $800 million at year end 2020.

The primary sources of our increase in cash year to date or the $1 2 billion in payments received under advanced purchase agreements and over $560 million from the sale of common stock in the first quarter.

James Kelly: Finally, royalty revenue of $40 million reflects the Novavax share of sales of our licensed partners. In this case, SK Biosciences made sales of 2373 antigen components to the Korean government during the period. Total expenses for the third quarter of 2021 were $486 million and were primarily weighted towards our R&D activities in support of 2373, both in total for the quarter and are the primary cause of the year-over-year growth. Following an expected regulatory approval of our vaccine, certain types of expenses that have previously been expensed as R&D will be capitalized to inventory and expensed as costs of goods sold when product is delivered. As noted earlier, we ended the third quarter with $1.9 billion in cash and cash equivalents as compared to just over $800 million at year-end 2020.

I would now like to turn the call back to stand to discuss our strategic priorities for the months to come.

And I think you Jim welcome onboard please turn to slide 15.

It was a tremendous quarter for us at Novavax behind the scenes are over 1300 employees worked tirelessly to prepare for the delivery of $23 73 globally.

Over the coming months, obtaining regulatory authorization for a COVID-19 vaccine remains our top priority.

This involves continued conduct collaboration and discussion with regulatory agencies with whom we've already completed submissions in other geographies, we will finalize our packages for filing.

We also expect to submit a complete regulatory package to the FDA by the end of 2021.

James Kelly: The primary sources of our increase in cash year-to-date are the $1.2 billion in payments received under advance purchase agreements and over $560 million from the sale of common stock in the first quarter. I would now like to turn the call back to Stan to discuss our strategic priorities for the months to come. And I thank you, Jim, and welcome aboard. Please turn to slide 15.

Our first authorization by a regulatory agency is expected to be followed by others over the coming weeks. We are returning to swiftly to the work at hand to get product ready to ship on a global basis timing and location. We will of course depends on the timing of various regulatory approvals, we expect to be able to ship doses to Indonesia, and hopefully others before the.

End of the year.

That will scale up quickly in the first quarter as we match, our API and Kovacs orders with these regulatory approvals, we will initiate our shipments from serum is the first authorized production center and supplement our regulatory filings with data from our other sites importantly.

Stan Erck: It was a tremendous quarter for us at Novavax. Behind the scenes, our over 1,300 employees worked tirelessly to prepare for the delivery of 2373 units globally. In the coming months, obtaining regulatory authorization for a COVID-19 vaccine remains our top priority. This involves continued collaboration and discussion with regulatory agencies with whom we've already completed submissions. In other geographies, we will finalize our packages for filing. We also expect to submit our complete regulatory package to the FDA by the end of 2021.

Importantly, including our Czech facility and our partner SK Biosciences in Korea.

Our goal is to reach a cadence of production that we will allow no vaccine or partners to have a manufacturing capacity of over 2 billion doses in 2022.

And as we've indicated before we will fulfill our commitments to higher income countries from our Apa's signed over the last year, and we expect to supply low and middle income countries in partnership with serum to meet our commitments to kovacs co backs. We believe that our vaccine is ideally suited to address the needs of these countries.

Stan Erck: Our first authorization by a regulatory agency is expected to be followed by others over the coming weeks. We are turning swiftly to the work at hand to get the product ready to ship on a global basis. Timing and location will, of course, depend on the timing of various regulatory approvals. We expect to be able to ship doses to Indonesia, and hopefully others, before the end of the year. This will scale up quickly in the first quarter as we match our APA and COVAX orders with these regulatory approvals.

In the coming months.

We will continue to evaluate 23 70 threes use beyond the two dose primary vaccination regimen through our ongoing boosting study and expect to collect data that further supports twenty-three 70 threes vast potential to serve as a booster.

Though our favorable react agenda through our favorable reactor judiciary and safety profile consistently high levels of efficacy and well understood technology. We are confident that $23 73 will be an important tool in combat in combating COVID-19 in the years to come.

Stan Erck: We will initiate our shipments from CIRM as the first authorized production center and supplement our regulatory filings with data from our other sites, importantly including our Czech facility and our partner SK Biosciences in Korea. Our goal is to reach a rate of production that will allow Novavax and our partners to have a manufacturing capacity of over 2 billion doses in 2022. And, as we've indicated before, we will fulfill our commitments to higher-income countries from our APAs signed over the last year, and we expect to supply low- and middle-income countries in partnership with CIRM to meet our commitments to COVAX. We believe that our vaccine is ideally suited to address the needs of these countries. In the coming months,

In parallel we will develop other areas of our robust pipeline as discussed earlier by Philip We believe our Covid nano flue combination vaccine will be a key component of our pipeline and we look forward to advancing those candidates through clinical development. We also remain optimistic about areas for future development within our pipeline including for RSV.

Moving into the end of 2021, our mission, we will continue to drive US forward, we never rest in our quest to protect the health of people everywhere.

With that I will now turn it over to the operator for Q&A.

Stan Erck: We will continue to evaluate 2373's use beyond a two-dose primary vaccination regimen through our ongoing boosting study and expect to collect data that further supports 2373's vast potential to serve as a booster. Through our favorable reactogenicity and safety profile, consistently high levels of efficacy, and well-understood technology, we are confident that 2373 will be an important tool in combating COVID-19 in the years to come. In parallel, we will develop other areas of our robust pipeline.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Our first question comes from collection to carry of Jefferies. Please go ahead.

Yes, Thank you and again congrats on all the progress here.

Just a couple of questions on my end first.

The filing is that you had over the last couple of weeks a new development was that you're leveraging SaaS is manufacturing can you help us understand our reasoning and rationale behind that and I guess more importantly, what are the gating steps and how quickly will you be able to supplement those applications and potential approvals.

Stan Erck: As discussed earlier by Filip, we believe our COVID-nano flu combination vaccine will be a key component of our pipeline, and we look forward to advancing this candidate through clinical development. We also remain optimistic about areas for future development within our pipeline, including for RSV. Moving into the end of 2021, our mission will continue to drive us forward. We never rest in our quest to protect the health of people everywhere. With that, I will now turn it over to the operator for Q&A.

With manufacturing data from your own sites and I have one follow up question there.

Yeah.

Yes. This is Stan thanks for the question.

The reason for our our reliance upon.

Serum as a partner for this is they have we've been working with them for almost two years.

Variety of areas and so we know them really well and they have they have added capacity specifically for novavax production over the past year, that's that's stay well over.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Kalechi Chakiri of Jeffreys. Please go ahead.

We're targeting 2 billion capacity just to cheer them they'll have that next year and so they have fill finish capacity that is virtually unlimited. We can make many hundreds of millions of doses per month in their facility. So all of that came together over the past several months and really helped us get to the point, where we could file with nine different <unk>.

Kalechi Chakiri: Yes, thank you. And again, congratulations on all the progress here. Just a couple of questions on my end. First, with the filings that you've had over the last couple of weeks, a new development has been that you're leveraging the SII's manufacturing. Can you help us understand the reasoning and rationale behind that? And, I guess more importantly, what are the gating steps, and how quickly will you be able to supplement those applications and potential approvals with manufacturing data from your own?

<unk> filings in the past couple of weeks I mean, this has been stupendous progress and serum has been there with us. So the follow on to your question is what about the rest of our plants. We have data we're collecting data.

That we will submit once we get regulatory approval in various territories and we will supplement those filings with data from.

Stan Erck: data from your own sites. And I have one follow-up question there.

Stan Erck: Yeah, this is Stan. Thanks for the question. The reason for our reliance upon Serum as a partner for this is that they have, we've been working with them for almost two years in a variety of areas, and so we know them really well. And they have added capacity specifically for Novavax production over the past year that's staggering, well over, you know, we're targeting two billion units. Just at Serum; they'll have that next year.

Stan Erck: And so they have fill finish capacity that's virtually unlimited. We can make many hundreds of millions of doses per month in their facility. So all of that came together over the past several months and really helped us to get to the point where we could file nine different regulatory filings in the past couple of weeks. I mean, this has been stupendous progress, and Serum has been there with us.

Okay.

Well I I think I answered the second part of the question that S. I I will be the the initial manufacturer the way they've already made many tens of millions of doses that are waiting to be to be shippable, they're setting with my team is physically go out over there touched them and so it's their their.

Stan Erck: So the follow-on to your question is, what about the rest of our plants? We have data, you know; we're collecting data that we will submit once we get regulatory approval in various territories, and we will supplement those filings with data from Korea, from the Czech Republic, from Spain, et cetera, so we can get them all involved. And so our global capacity network is really potent.

I forget what it was the first part of the question and.

And just to just wanted to clear on how long did it take for that that'd be like Oh and that email out of it again.

Oh.

You know, we we can't Fort we're not allowed to forecast how long it's gonna take the regulatory the various regulatory agencies to opine on this if my opinion is it's gonna be soon so I think because we get we can judge there.

Stan Erck: Got it. Thank you. That's really helpful. And I guess you alluded to this in your answer. Can you provide any color or...

Stan Erck: on how much vaccine or how much of the current capacity is actually coming from serum.

Stan Erck: coming from the Serum Institute of India versus your own sites. Actually, we don't.

Stan Erck: We don't split that out by manufacturing facility, but sorry. No problem. All right. Thank you very much.

Interest in their speed by how many questions. They ask in there they've been inactive very active discussions with us so.

I think we're going to follow with the number of regulatory positive regulatory actions.

Operator: The next question is from Vernon Bernardino of H.C. Wainwright.

Lea Lowe: Good evening, everyone, and thank you for the update. I am, this is Lea Lowe, and I'm calling on behalf of Vernon. We just had a question. I guess we wanted more color on the timeline of how long it would take for the WHO and EWL review. And I just also wanted to confirm that the SII will actually be manufactured. And that's it for me.

Following this Indonesia I think.

So.

Awesome.

Stan Erck: Well, I think I answered the second part of the question, that SII will be the initial manufacturer. They've already made many tens of millions of doses that are waiting to be shipped. They're sitting, we've, my team has physically gone over there and touched them, and so it's, they're there. Then, I forgot, what was the first part of the question?

Lea Lowe: We just wanted some more color on how long it would take for the WHO and the EUL review. Oh, you know, we...

Stan Erck: Oh, you know, we can't, we're not allowed to forecast how long it's going to take the regulatory agencies the various regulatory agencies to opine on this. If my opinion is, it's going to be soon. So I think because we get, we can judge their interest and their speed by how many questions they ask, and they've been in active, very active discussions with us. I think we're going to follow with a number of regulatory, positive regulatory actions following this Indonesia, I think, soon.

Operator: The next question comes from Mayank Mamtani of B. Riley Securities.

Mayank Mamtani: Good afternoon. Thanks for taking our questions and, obviously, congratulations on a ton of recent progress. So maybe just staying with the serum question, are you able to comment on the economic arrangement you may have, you know, for the developed market specifically, if serum is a manufacturer? And also, are you able to comment on, you know, COGS, if, you know, things, if vaccine doses are coming from serum versus the Novavax facility? And then I have a follow-up question.

Stan Erck: Yeah, so one of the reasons we partnered with them a year ago is because we recognized their capabilities for making large quantities of vaccine. They, in fact, in their business, their model is to make vast amounts of vaccine at very low cost. And they've tied that to their target markets, which are all of the low and middle-income countries of the world. So that's been their goal.

Stan Erck: Our deal with them is that we agreed to license them so that they can make the product. They have an exclusive license in India to make and sell the product. And in the low and middle-income countries of the world, we share profits on that. And they'll make the product and distribute it, and we'll share profits. And we have not disclosed what the ratio of that is. And we've also signed an agreement with them if we want them to make products for higher-income markets.

Thanks, that's helpful color and then on the on.

On the other side of the planet on the U S FDA filing.

Think about the specific requirements youre working through.

You maybe detail is it about the product itself that it has to come from facilities, maybe non serum facilities or is it just the release assays that have been agreed upon with the FDA has a different criteria be it.

Stan Erck: And so we have a CDMO agreement with them, and so they would supply us finished products, whether in one of two ways, either from antigen, the spike protein that they make at serum, or from spike protein that we make at our various sites around the world. And so we'll have the choice of having serum fill it and produce it for us, produce the entire product for us, or just take our manufacturing network and make our own product all the way through fill, finish, and distribute it in high-income countries. So it's complicated, but it's a very effective way to reach our strategy of going from zero to two billion overnight.

Percentage of material that you know sort of meets a particular, a potency or safety level. Just can you can you help us understand.

How much of what you have today.

Be also applicable to the U S FDA filing.

Yeah, No we we made a.

A concerted effort to harmonize all of our filings. So so we're going to file the same thing in the U S. As we filed it elsewhere.

Stan Erck: And then on the other side of the planet, on the U.S. FDA filing, you know, as we think about the specific requirements, you know, you're working through, like, can you maybe detail, is it about the product itself that it has to come from facilities, maybe non-serum facilities? Or is it just, you know, the release assays that have been agreed upon that the FDA has different criteria, you know, be it a percentage of material that, you know, sort of meets a particular potency or safety level? Just can you help us understand, you know, how much of what you have today could also be applicable to the U.S. FDA filing?

And we are in the process of dealing with the FDA, we've had communication with them. This week, we're going to set up a meeting sometime in the foreseeable future. We don't know what date, yet we don't have a date, yet but sometime in the very near and from that we can give more clarity on the dates that we expect to.

File the complete package and Astral EUA, so that that will be coming later this month.

Great and my final question was on the pediatric study.

Stan Erck: Yeah, no; we made a concerted effort to harmonize all of our filings. So we're going to file the same thing in the U.S. as we filed elsewhere.

Data timeline I think you commented on the regulatory package and one gigabit, but just can you clarify since that crossover finished a while ago.

Stan Erck: And we are in the process of dealing with the FDA. We've had communication with them this week. We're going to set up a meeting sometime in the foreseeable future, but we don't know what date yet. We don't have a date yet, but it will be sometime in the very near future. And from that, we can give more clarity on the dates that we expect to file the complete package and ask for an EUA. So that will be coming later this month.

Can someone comment on the data timeline.

Yeah. The analysis is ongoing.

Stan Erck: And my final question was on the pediatric study data timeline. I think you commented on the regulatory package in one cue, but just can you clarify, since that crossover finished a while ago, can someone comment on the data timeline?

Stan Erck: Yeah, the analysis is ongoing, and it's made slightly more complicated by our current regulatory filings globally. So we need to balance that work out, but we are confident that we'll be able to get the data pulled together and submitted as a variation of our initial file in the first place.

Operator: Great, thanks for taking our questions.

Charles Duncan: The next question comes from Charles Duncan of Cantor Fitzgerald. Yes, hi, thanks for asking...

Charles Duncan: Yes, hi. Thanks for taking my question and congratulations, Stan and team, for all the recent progress. Very good to see you. Had a question regarding the EUA filings that I'm sure you won't be able to answer in great detail, but beyond being able to talk about when you might see approvals, I'm wondering if you can characterize next steps and whether or not there would be some kind of interim information that can be press released besides an actual approval, as Indonesia kind of came out of the blue.

Stan Erck: Yeah, I'm trying to interpret your question a little bit. We are expecting multiple authorizations this year, and for each of these we are trying to allocate products, both that we have an inventory in the U.S. and Europe and South Korea and an inventory that's being built up at CIRM, and that allocation process will be complicated because until we know what the, not only what the, when we get the authorization, but the timing of all of these different orders, and from GAVI we need to know, you know, where they want product when, and over the coming quarters, and the same thing from our APAs, and so we'll be building, we are building inventory, and we'll be, over the coming weeks, we'll be figuring out how to allocate those to label them for different geographies. Did that answer your question? I'm not sure I did.

Charles Duncan: Yeah, I apologize, Stan. I think I wasn't clear. What I was asking is if you would anticipate any part of the regulatory process to be visible to the public for any one of these emergency use authorizations over the course of the next some period of time before an actual grant of an authorization.

Of that authorization.

Stan Erck: I don't think we're going to have much visibility before the actual grants have been authorized. The process is they do the review; they've had the ability to review the clinical safety data for some time now because those have been submitted to the regulatory agencies, so the remaining analysis should be focusing on the CMC section. We can only know, and of course, it's not announceable, we can only know how interested they are by the number of questions we get and the responses we get back and whether they think they've got all the answers to the questions.

I don't think we're going to have much visibility before the actual granted but an authorization we have the process is.

As they do the review they've they've had the ability to review the the clinical and safety data for some time now because those have been submitted to the regulatory agencies. So the remaining analysis should be focusing on on the CMC section.

<unk>.

And we can only know and of course, it's not announce it will we could only know how interested they are by the by the number of questions. We get the responses, we get back and whether they think.

They've got all the answers to the questions.

Stan Erck: And so there's not going to be any information going forward about the EUA until it happens, optimistically forecasting that they're going to be working on this quickly, so we'll just... From week to week, we're going to see the results of that.

And so theres not going to be any information.

Going forward about the EUA until it happens, but all I'm, suggesting to us.

I'm optimistic.

Optimistically forecasted that theyre going to be working on this quickly so.

It's from week to week, we're going to see.

Results of that.

Charles Duncan: Okay, very good. That's helpful. If I could turn to Filip or Greg regarding a couple of clinical questions. First of all, I'm wondering if you have ever seen any cases of myocarditis that you think go beyond that which is seen with the virus with an infection generally, and if you could provide some kind of theoretical basis for not seeing any cases or foreseeing cases and perhaps even contrast with other technologies.

Okay very good that's helpful. If I could turn to Philip or Greg regarding a couple of clinical questions.

First of all I'm wondering if you have ever seen any cases of myocarditis. Thank you think go beyond that which is seen with the virus within infection generally.

If you could provide some kind of theoretical basis for forgot seeing any cases, or foreseeing cases, and perhaps even contrasts with other technologies.

Filip Dubovsky: So we don't really comment on specific safety signals we've seen or not seen in any of our studies. But what we can, or we all know, is that myocardial infarction is the most common cause of heart disease.

So we don't really comment on specific safety signals, we've seen or not seen in any of our studies.

We can where we all know.

Zero Carditis size is often caused by viral infections in those occur sporadically throughout a planner. So they do crop up and any database you look at our data is reviewed by our not only our external safety committee as well as by the MH DSM B and they havent identified any safety signals for us yet.

Filip Dubovsky: [inaudible]

Filip Dubovsky: So they do crop up in any database you look at. Our data is reviewed by not only our external safety committee but also by

Filip Dubovsky: by the NIH GSMB, and they haven't identified any.

Filip Dubovsky: identified any safety signals for us.

Okay very good last question regarding homologous versus heterologous boost.

Charles Duncan: Okay, very good. Last question regarding homologous versus heterologous boost. I was wondering if you could provide, you know, a little bit of perspective on homologous boost seems like it should work given the data that you've shown so far in six months. But do you sense that maybe heterologous boost may be a paradigm that you'll want to evaluate in the future? And is there at least a theoretical basis for thinking that 2373 could be useful on top of, say, past RNA primaries?

Wondering if you could provide a.

A little bit of perspective on homologous seems like should work given the data that you've shown so far in six months, but do you sense that maybe heterologous boost may be a paradigm that you want to evaluate in the future.

And is there at least a theoretical basis for thinking that.

$23 73 could be useful on top of say past RNA primary boost.

Yes, so we've.

Filip Dubovsky: Yeah, so we've outlined the details of our homologous boosting just today, and we think there's a path forward, and we see an obvious way to get a label indication for that. We also see huge value in boosting on top of other people's vaccines. We have a safety profile that I think will justify doing that, and a pathology that makes it convenient to move the vaccine around the world and use it in that regard.

I find that the details of our homologous boosting.

Today, and we think there's a path forward and we see an obvious way to get a.

Our label indication or that we also see huge value and boosting on top of other People's vaccines. We have a safety profile that I think will justify doing that and a pathology, which makes it convenient to move at the vaccine around the world and used in that regard.

How well <unk>.

Performs.

Filip Dubovsky: How well it performs will really be data-driven. We plan to do some studies in the near future to help define that, including studies we're designing to provide enough data to give us a label indication. There will be some data coming out from the UK studies, as everyone on this call knows, and may shed some light on that. But those studies aren't designed in such a way to be able to provide label claims, and that's really our goal.

We'll really be there now.

We plan to do some studies in the near future to help define that including studies were designing to provide enough data to give us a label indication there will be some data coming out from the U K studies.

And on this call knows that May shed some light into it but those studies are designed in such a way to be able to provide our label claims and thats. When we are a go.

Filip Dubovsky: So as far as the theoretical side of things, there isn't a ton known about what it looks like to boost on top of other platforms. There's more known about what it looks like to boost on top of viral platforms versus mRNA. So I think we'll have to wait for the data to come out. But what I do feel confident about is that if you were to stack up any homologous or heterologous three-dose regime compared to what we've shown in the phase two study from the US and Australia, I'm pretty confident we would come out on top or in parity with that.

So as far as the theoretical side of things.

Filip Dubovsky: And I have to say that there's something pretty unique about what we're seeing with our ability to induce cross-variant neutralizing antibodies, and that may be part of the story. So people shouldn't just think about the magnitude of the immune response but the quality of the immune response.

Charles Duncan: but the quality of the immune response as well. Okay, very good. That's helpful. Again, congrats on all the recent progress. Appreciate you taking the time to answer my question.

Operator: The next question is from Eric Joseph of J.P. Morgan.

Eric William Joseph: Hi, good evening. Thanks for taking the questions. I just wanted to circle back on plans to supplement the current filings with CMC packages from your own supply chain. Could this happen before or is it more likely to happen after the anticipated decisions, authorization decisions for regions, filed over the past week? [inaudible] As a follow-up to that, if it's primarily serum that's making Covax effectively over the near term, how should we be thinking about dose allocation between, you know, your commitments to COVAX, the COVAX facility, and higher income countries? I guess, is there any prioritization of doses to COVAX first? and then I have a follow-up. This is Stan.

Correct facility.

And higher income countries I guess is there any prioritization.

Doses too.

<unk>.

And then I have a follow up.

Yes, Steve.

Thanks for the question.

Q3 2021 Novavax Inc Earnings Call

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