Q2 2024 Novavax Inc Earnings Call

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Operator: 2nd quarter, 2024 financial results, and operational highlights conference call. Our participants will be on listen-only mode. Should you need assistance, please signal the conference specialist by pressing star followed by zero.

Speaker Change: Good morning and welcome to Novavax Second Quarter 2024 Financial Results and Operational Highlights Conference Call. All participants will be in listen-only mode.

If you need assistance, please signal the conference specialist by pressing star followed by zero. After today's presentation, there will be an opportunity to ask questions.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask questions, please press star on your Star One on your touchstone phone. To withdraw your question, please press star two.

Speaker Change: To ask questions, please press star 1 on your touchtone phone. To withdraw your question, please press star 2.

Operator: Please note this event is being recorded.

Erika Schultz: I would now like to turn the call over to your speaker today, Erika Schultz.

Speaker Change: please note misevent is being recorded i'would now like to turn to call over to your speaker today erica shz

Erika Schultz: Senior Director and Vester Relations, please go ahead. Good morning, and thank you all for joining us today to discuss our 2nd quarter 2024 operational highlights and financial results. Approximately 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.

Erica Shz: Senior Director, Investor Relations, please go ahead.

Erica Shz: Good morning and thank you all for joining us today to discuss our second quarter 2024 Operational Highlights and Financial Results.

Speaker Change: 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. Please turn to slide 2.

Erika Schultz: Please turn to slide 2. Before we begin with prepared remarks, I need to remind you that this presentation includes four looking statements, including information relating to the future of Novavax. It's key strategic priorities. Statements related to potential royalties and milestones, operating plans, objectives, and prospects, full year 2024 financial guidance, the amount and impact of Novavax's cost reduction plans, its future financial or business performance conditions or strategies, its partnerships, anticipated timing and outcome, a future regulatory filings and actions, and the ongoing development, marketing opportunities, manufacturing capacity, and future availability of our vaccine candidates, and key upcoming milestones.

Erica Shz: Before we begin with prepared remarks, I need to remind you that this presentation includes four looking statements, including information relating to the future of Novavax, its key strategic priorities, statements related to potential royalties and milestones,

Erica Shz: Operating Plans, Objectives and Prospects.

Erica Shz: Full Year 2024 Financial Guidance, The Amount and Impact of Novavax's Cost Reduction Plans, Its Future Financial or Business Performance Conditions or Strategies,

Erica Shz: its partnerships anticipated timing and outcome of future regulatory filings and actions and the ongoing development marketing opportunities manufacturing capacity and future availability of our vaccine candidates and key upcoming milestones

Erika Schultz: Each forward-looking statement contained in this presentation is subject to risks and uncertainties that can cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears under the heading Cautionary Note Regarding Four Looking Statements. In the slide deck we issued this morning and under the heading Risk Factors in our most recent Form 10-K and subsequent Form 10-Qs filed with the Securities and Exchange Commission available at www.SEC.gov and on our website at Novavax.com. The four looking statements in this presentation speak only as of the original date of this presentation, and we undertake no obligation to update or revise any of these statements.

Erica Shz: Each forward-looking statement contained in this presentation is subject to risk and uncertainties that could cause actual results to differ materially from those projected in such statements.

Erica Shz: Additional information regarding these factors

Erica Shz: appeared under the heading cautionary note regarding

Erica Shz: forward-looking statements

Erica Shz: In the slide deck we issued this morning and under the heading risk factors in our most recent forum 10k and subsequent

Erica Shz: Form 10-Q filed with the Securities and Exchange Commission available at www.sec.gov and on our website at novavax.com.

Erica Shz: the forward-looking statements in this presentation speak only as of the original date of this presentation

Erica Shz: and we undertake no obligation to update or revise any of these statements

Erika Schultz: Please turn to slide three. This presentation also includes references to a non-GAAP financial measure, which is for looking information for R&D and SG&A expense as adjusted for expense reimbursements from Santa Fe under the Santa Fe agreement.

Erica Shz: please turn to slide three

Erica Shz: This presentation also includes references to a non-GAP financial measure, which is forward-looking information for R&D and SG&A expense as adjusted for expense reimbursement from Sanofi under the Sanofi Agreement.

Erika Schultz: Please turn to slide four. Joining me today is John Jacobs, our President and CEO, who will provide an update on our progress during the quarter and highlight our four key value drivers. Additionally, John Trezino, our president and chief operating officer, will provide an update on our operating activities, and Dr. Bob Walker, chief medical officer and interim head of research and development. We'll discuss our clinical development and pipeline. Finally, Jim Kelly, our Chief Financial Officer and Treasurer, will provide an overview of our financial results and implications of the Santa Fe partnership.

Erica Shz: Please turn to slide 4.

John Jacobs: Joining me today is John Jacobs, our President and CEO , who will provide an update on our progress during the quarter and highlight our four key value drivers.

John Trizzino: Additionally, John Trizzino, our President and Chief Operating Officer, will provide an update on our operating activities, and Dr. Bob Walker, Chief Medical Officer and Interim Head of Research and Development, will discuss our clinical development and pipeline.

Speaker Change: additionally john trasino our president and chief operating officer will provide an update on our operating activities and dr bob walker chief medical officer and ininter head of research development will discuss our clinical development and pipeline

Speaker Change: Finally, Jim Kelly, our Chief Financial Officer and Treasurer, will provide an overview of our financial results and implications of the Sanofi Partnership.

John Jacobs: I would now like to hand over the call to John Jacobs. Thank you, Erika, and thank you everyone for joining us. I'm pleased to be with you today, along with the members of our executive team, to highlight our recent achievements, progress on our annual priorities, and the shaping of a new vision for Novavax. When we spoke with you last quarter, we were taking the first steps on this exciting journey with the announcement of our global partnership with Sinofi. Our collaboration with Sinofi has allowed us to monetize the value of our COVID-19 vaccine, and proven technology platform, and freeze-up resources to develop multiple opportunities in the vaccine space.

Speaker: Thank you, Erika, and thank you, everyone, for joining us. I'm pleased to be with you today, along with the members of our executive team, to highlight our recent achievements, progress on our annual priorities, and the shaping of a new vision for Novavax. When we spoke with you last quarter, we were taking the first steps on this exciting journey with the announcement of our global partnership with Sanofi. Our collaboration with Sanofi has allowed us to monetize the value of our COVID-19 vaccine and proven technology platform and freeze up resources to develop multiple opportunities in the vaccine space.

Speaker Change: i would now like to hand over the calls to john jacobs

John Trasino: Thank you, Erika, and thank you, everyone, for joining us.

Speaker Change: i'm pleased to be with you today along with the members of our executive team to highlight our recent achievements progress on our annual priorities and the shaping of a new vision for nova ax

Speaker Change: When we spoke with you last quarter, we were taking the first steps on this exciting journey with the announcement of our global partnership with Sanofi.

Speaker Change: Our collaboration with Sanofi has allowed us to monetize the value of our COVID-19 vaccine and proven technology platform, and frees up resources to develop multiple opportunities in the vaccine space.

John Jacobs: Since then, we have worked hard to execute on our objectives, and our beginning to position the company back toward its roots as an innovation-driven organization, while remaining a close commercial partner to Sinofi for our COVID-19 vaccine. We are beginning to evolve from a company that is independently manufacturing, distributing, and commercializing vaccines on a global scale to a much more efficient and focused R&D model. This means that we intend to drive future value from additional business development activities and organic R&D via our proven and validated technology platform, with plans to unveil a new and expanded clinical pipeline by the end of this year, and to seek to execute our plans within a much leaner operating model in 2025 and beyond.

Speaker: Since then, we have worked hard to execute on our objectives and are beginning to position the company back toward its roots as an innovation-driven organization while remaining a close commercial partner to Sanofi for our COVID-19 vaccine. We are beginning to evolve from a company that is independently manufacturing, distributing, and commercializing vaccines on a global scale to a much more efficient and focused R&D model. This means that we intend to drive future value from additional business development activities and organic R&D via our proven and validated technology platform, with plans to unveil a new and expanded clinical pipeline by the end of this year and to seek to execute our plans within a much leaner operating model in 2025 and beyond.

Speaker Change: Since then, we have worked hard to execute on our objectives and are beginning to position the company back toward its roots as an innovation-driven organization, while remaining a close commercial partner to Sanofi for our COVID-19 vaccine.

Speaker Change: We are beginning to evolve from a company that is independently manufacturing, distributing, and commercializing vaccines on a global scale.

Speaker Change: to a much more efficient and focused R&D model.

Speaker Change: this means that we intend to drive future value from additional business development activities and organic rnd the are proven and validated technology platform with plans to unveil a new and expanded clinical pipeline by the end of this year

Speaker Change: and to seek to execute our plans within a much leaner operating model in two thousand and twenty-five and beyond

John Jacobs: The potential value drivers of our business are outlined on Slide 5, and include Value Driver 1, the Sinofi partnership; Value Driver 2, late stage pipeline; Value Driver 3, leveraging our proven technology platform to drive additional partnerships and deals; and Value Driver 4, new early stage pipeline. It is our intention that these potential value drivers will be supported by an appropriately scaled infrastructure, with significantly reduced experiences for our 2020-24 baseline. Jim Kelly will provide more detail and clarity on our expense projections later on in the call.

Speaker: The potential value drivers of our business are outlined on slide 5 and include Value Driver One, the Sanofi partnership; Value Driver 2, Late Stage Pipeline; Value Driver 3, Leveraging Our Proven Technology Platform to Drive Additional Partnerships and Deals; and Value Driver 4, New Early Stage Pipeline. It is our intention that these potential value drivers will be supported by an appropriately scaled infrastructure with significantly reduced expenses versus our 2024 baseline. Jim Kelly will provide more detail and clarity on our expense projections later in the call.

Speaker Change: The potential value drivers of our business are outlined on slide 5 and include Value Driver 1, the Sanofi partnership.

Speaker Change: Value Driver 2, Late Stage Pipeline. Value Driver 3, Leveraging Our Proven Technology Platform to Drive Additional Partnerships and Deals. And Value Driver 4, New Early Stage Pipeline.

Jim Kelly: It is our intention that these potential value drivers will be supported by an appropriately scaled infrastructure with significantly reduced expenses versus our 2024 baseline. Jim Kelly will provide more detail and clarity on our expense projections later on in the call.

John Jacobs: So let's take a moment to expand on each of these potential value drivers that are intended to be the foundation of our new growth strategy for Novavax. Value Driver 1, the Sinofi Partnership. The Sinofi partnership has four potential areas of value. First, immediate upfront payment and equity investment of approximately $570 million. Next, mid-term milestones related to our partnered COVID-19 vaccine of approximately $350 million and Sinofi's independent flu COVID-19 combination program were another $350 million. Third, anticipated royalty streams from both of these programs. And fourth, long-term royalties and or milestones from any other vaccines developed by Sinofi, utilizing our COVID-19 vaccine and or our MatrixM adjuvant.

Speaker: So let's take a moment to expand on each of these potential value drivers that are intended to be the foundation of our new growth strategy for Novavax. Value Driver One, the Sanofi partnership. The Sanofi Partnership has four potential areas of value. First, an immediate upfront payment and equity investment of approximately $570 million.

Speaker Change: so let's take a moment to expand on each of these potential value drivers that are intended to be the foundation of our new growth strategy for no evxs

Speaker: Next, midterm milestones related to our partnered COVID-19 vaccine of approximately $350 million, and Sanofi's independent flu COVID-19 combination program of another $350 million. Third, anticipated royalty streams from both of these programs. And fourth, long-term royalties and or milestones from any other vaccines developed by Sanofi utilizing our COVID-19 vaccine and or our MatrixM adjuvant. That means, for example, any additional combination vaccine commercialized using our COVID vaccine is eligible for royalties. Also, any new vaccine developed using our MatrixM adjuvant is eligible for both milestones and royalties. That being said, the partnership structure offers potential opportunities for decades to come, and because Sanofi is a global leader in vaccine development and commercialization with a substantial presence and proven track record in seasonal respiratory vaccines in the U.S. and around the world.

Jim Kelly: Value Driver One, the Sanofi partnership.

Jim Kelly: The Sanofi Partnership has four potential areas of value.

Jim Kelly: First immediate upfront payment and equity investment of approximately 570 million dollars.

Jim Kelly: next mid-term milestones related to our partnernered covid nineteen vaccine of approximately three hundred fifty million dollars and sanafe's independent flu covid ' nineteen combination program where another three hundred and fifty million dollars

Speaker Change: third anticipated royalty streams from both of these programs

Speaker Change: And fourth, long-term royalties and or milestones from any other vaccines developed by Sanofi utilizing our COVID-19 vaccine.

John Jacobs: That means, for example, any additional combination vaccine commercialized using our COVID vaccine is eligible for royalties. Also, any new vaccine developed using our Matrix M adjuvant is eligible for both milestones and royalties. That being said, the partnership structure offers potential opportunities for decades to come. And because Sanofi is a global leader in vaccine development and commercialization with a substantial presence and proven track record in seasonal respiratory vaccines in the US and around the world, we have the utmost confidence in their ability to perform when they begin commercializing our COVID-19 vaccine next year and potentially launch multiple additional vaccines using our technology in the future.

Speaker: That means, for example, any additional combination vaccine commercialized using our COVID vaccine is eligible for royalty. We have the utmost confidence in their ability to perform when they begin commercializing our COVID-19 vaccine next year and potentially launch multiple additional vaccines using our technology in the future. As we have stated on prior calls, we are on track to independently initiate our own late-stage Phase 3 trial in the fourth quarter of this year to evaluate our stand-alone influenza vaccine and COVID-19 influenza combination vaccine. Moving on to Value Driver 3, leveraging our proven technology platform to drive additional partnerships and deals.

Speaker Change: and or our MatrixM adjuvant.

Speaker Change: That means, for example, any additional combination vaccine commercialized using our COVID vaccine is eligible for royalties.

Speaker Change: Also, any new vaccine developed using our MatrixM adjuvant is eligible for both milestones and royalties.

Speaker Change: That being said, the partnership structure offers potential opportunities for decades to come.

Speaker Change: And because Sanofi is a global leader in vaccine development and commercialization with a substantial presence and proven track record in seasonal respiratory vaccines in the U.S. and around the world.

Speaker: We have the utmost confidence in their ability to perform when they begin commercializing our COVID-19 vaccine next year and potentially launch multiple additional vaccines using our technology in the future. We look forward to providing further updates on our partnership at the appropriate time. Value Driver 2, Novavax Late Stage Pipeline. As we have stated on prior calls, we are on track to independently initiate our own late-stage Phase 3 trial in the fourth quarter of this year to evaluate our stand-alone influenza vaccine and COVID-19 influenza combination vaccine. Top-line data from this trial is expected by the middle of 2025.

Speaker Change: We have the utmost confidence in their ability to perform when they begin commercializing our COVID-19 vaccine next year and potentially launch multiple additional vaccines using our technology in the future.

John Jacobs: We look forward to providing further updates on our partnership at the appropriate time. Value driver 2, Novavax late-stage pipeline. As we have stated on prior calls, we are on track to independently initiate our own late-stage Phase 3 trial in the fourth quarter of this year to evaluate our standalone influenza and COVID-19 influenza combination vaccines. Top-line data from this trial is expected by the middle of 2025. These assets have already demonstrated promising Phase 2 data. We intend to partner or monetize these assets, assuming successful Phase 3 results rather than commercialize them ourselves, which should allow us to avoid significant infrastructure expense and execution risk.

Speaker Change: We look forward to providing further updates on our partnership at the appropriate time.

Speaker Change: ValueDriver2, Novavax Late Stage Pipeline.

Speaker Change: as we have stated on prior calls we are on track independently initiate our own late stage phase three trial in the fourth quarter of this year to evaluate our stand-alone influenza and covid nineteen influenza combination vaccines

Speaker Change: top line data from this trial is expected by the middle of two thousand andtwenty-five

Speaker: These assets have already demonstrated promising Phase 2 data. We intend to partner with or monetize these assets, assuming successful Phase 3 results, rather than commercialize them ourselves, which should allow us to avoid significant infrastructure expenses and execution risk. Moving on to Value Driver 3, leveraging our proven technology platform to drive additional partnerships and deals. Beyond these two late-stage assets, our proven technology platform has the potential to offer other companies significant value. And our ambition is to be a partner of choice to help others enhance or even expand some of the established in-line vaccine franchises of larger players.

Speaker Change: These assets have already demonstrated promising Phase 2 data. We intend to partner or monetize these assets, assuming successful Phase 3 results, rather than commercialize them ourselves, which should allow us to avoid significant infrastructure expense and execution risk.

John Jacobs: Moving on to value driver 3, leveraging our proven technology platform to drive additional partnerships and deals. Beyond the two late-stage assets, our proven technology platform has the potential to offer other companies significant value. And our ambition is to be a partner of choice to help others enhance or even expand some of the established in-line vaccine franchises of larger players. For example, we believe that matrix M can help enhance many existing vaccines in the portfolios of other companies by boosting immunogenicity and lowering COGS without adding to the side effects burden. Later in this call, Bob Walker will share some new data with you as an example of this capability.

Speaker Change: Moving on to Value Driver 3, leveraging our proven technology platform to drive additional partnerships and deals.

Speaker Change: beyond the two late-stage assets our proven technology platform as the potential to offer other company' significant value and our ambition is to be a partner of choice to help others enhance or even expand some of the established in line vaccine franchises of a larger players

Speaker: We believe that MatrixM can help enhance many existing vaccines in the portfolios of other companies by boosting immunogenicity and lowering COGs without adding to the side effects burden. Later in this call, Bob Walker will share some new data with you as an example of this capability. These MatrixM attributes may also enable companies with clinical-stage vaccine portfolios to make those vaccines more competitive as they strive for the best product profile and even allow for the creation of new vaccines that might not otherwise be possible.

Speaker Change: for example we believe that matrix end can help enhance many existing vaccines in the portfolio of other companies by boosting immunogenicity and lowering cogs without adding to the side effectsburden

Speaker Change: Later in this call, Bob Walker will share some new data with you as an example of this capability.

John Jacobs: These matrix M attributes may also enable companies with clinical stage vaccine portfolios to make those vaccines more competitive as they strive for the best product profile and even allow for the creation of new vaccines that might not have otherwise been possible. We continue to explore the potential of our technology and believe that we have only just begun to tap into the value of our platform, to our company and portfolio, and to that of other vaccine companies.

Speaker Change: These MatrixM attributes may also enable companies with clinical stage vaccine portfolios to make those vaccines more competitive as they strive for the best product profile, and even allow for the creation of new vaccines that might not have otherwise been possible.

Speaker: We continue to explore the potential of our technology and believe that we have only just begun to tap into the value of our platform for our company and portfolio and that of other vaccine companies. And finally, value driver four, the new early stage pipeline. Our final and fourth potential value driver is the development of our own early stage organic pipeline rather than focusing our efforts on seasonal commercial execution of a single vaccine asset.

Speaker Change: We continue to explore the potential of our technology and believe that we have only just begun to tap into the value of our platform.

Speaker Change: to our company and portfolio and to that of other vaccine companies

John Jacobs: And finally, value driver 4, new early stage pipeline. Our final and fourth potential value driver is the development of our own early stage organic pipeline. Rather than focus our efforts on seasonal commercial execution of a single vaccine asset, we will instead invest our time, energy, and capital on the development of an expanded pipeline that uses our recombinant nanoparticle technology platform to develop new assets focused on infectious disease and respiratory, as well as potentially vaccines in other disease or areas and categories. We will be looking to develop assets that we believe can make a significant difference for global public health and at the same time present a significant commercial opportunity.

Speaker Change: and finally value driver new early stage pipeline our final and fourth potential value driver is the development of our own early stage organic pipeline

Speaker Change: rather than focus our efforts on seasonal commercial commercial execution of a single vaccine asset

Speaker: We will instead invest our time, energy, and capital in the development of an expanded pipeline that uses our recombinant nanoparticle technology platform to develop new assets focused on infectious disease and respiratory as well as potentially vaccines in other disease areas and categories. We will be looking to develop assets that we believe can make a significant difference for global public health and, at the same time, present a significant commercial opportunity. We reserve the right to develop, launch, and commercialize any of these assets ourselves should the emerging data and business case support it, for the remainder of 2024 and in line with our key value drivers.

Speaker Change: We will instead invest our time, energy, and capital on the development of an expanded pipeline that uses our recombinant nanoparticle technology platform to develop new assets focused on infectious disease and respiratory, as well as, potentially, vaccines in other disease areas and categories.

Speaker Change: we will be looking to develop assets that we believe can make a significant difference for global public health and at the same time present a significant commercial opportunity

John Jacobs: City. We reserve the right to develop, launch, and commercialize any of these assets ourselves should the emerging data and business case support us.

Speaker Change: We reserve the right to develop, launch, and commercialize any of these assets ourselves, should the emerging data and business case support it.

John Jacobs: For the remainder of 2024, and in line with our key value drivers, we will continue to execute on our four priorities, which you should be see on slide six. And these priorities are priority one: the successful execution of our new partnership with Santa Fe. Priority two, driving incremental value from our technology platform via the initiation of our phase three trial for kick and flu, the development and unveiling of our new refreshed pipeline, and pursuing new business development opportunities. Priority three, continue to reduce our R&D and SG&A costs and line with our prior stated targets, and prepare for additional significant reductions to scale and cost as we enter 2025 and beyond.

Speaker Change: For the remainder of 2024, and in line with our key value drivers, we will continue to execute on our four priorities, which you should see on slide 6.

Speaker: We will continue to execute on our four priorities, which you should be seeing on slide six. Priority one is the successful execution of our new partnership with Santa. Priority two, driving incremental value from our technology platform via the initiation of our phase three trial for Kik and Flu, the development and unveiling of our new refreshed pipeline, and pursuing new business development opportunities. Priority three, continue to reduce our R&D and SG&A costs in line with our prior stated targets and prepare for additional significant reductions to scale and cost as we enter 2025 and beyond.

Speaker Change: and these priorities are priority won the successful execution of our new partnership with sanfe

Speaker Change: Priority 2, driving incremental value from our technology platform via the initiation of our phase 3 trial for Kik and Flu, the development and unveiling of our new refreshed pipeline, and pursuing new business development opportunities.

Speaker Change: priority three continue to reduce our rnd and sgnna costs in line with our prior stated targets and prepare for additional significant reductions to scale and cost as we enter two thousand and twenty -five and beyond

John Jacobs: And finally, priority four: delivering our updated COVID-19 vaccine for the 24-25 fall vaccination season.

Speaker: And finally, priority four, delivering our updated COVID-19 vaccine for the 24-25 fall vaccination season. As we enter the second half of this year, we look forward to sharing more details on our updated plans as we continue to forge a new path forward. Now, I would like to hand it over to the team to discuss our results from the quarter in more detail, beginning with John Trizzino on our operating updates.

Speaker Change: and finally priority for delivering our updated covid ' nineteen vaccine for the twenty-four twenty-five fall vaccination season

John Jacobs: As we enter the second half of this year, we look forward to sharing more details on our updated plans as we continue to forge a new path forward.

Speaker Change: As we enter the second half of this year, we look forward to sharing more details on our updated plans as we continue to forge a new path forward.

John Trezino: Now I would like to hand it over to the team to discuss our results from the quarter in more detail, beginning with John Trezino for our operating updates. John?

John Trazino: now i would like to hand it over to the team to discuss our results from the quarter in more detail beginning with john trazino for our operating updates john

John Trezino: Thank you, John. Q2 was another quarter of progress for the business, as we continued to lay the groundwork for a successful new exhibit co-commercialization effort with Santa Fe beginning in 2025. And with a 24-25 season start less than one month away, we have continued to lay the groundwork for success by updating and filing for authorization of our updated COVID-19 vaccine formulation.

Speaker: Q2 is another quarter of progress for the business as we continue to lay the groundwork for a successful Novavax co-commercialization effort with Sanofi beginning in 2025. And with the 24-25 season start less than one month away, we have continued to lay the groundwork for success by updating and filing for authorization of our updated COVID-19 vaccine formulation. Please turn to slide 8.

Speaker Change: thank you john

Speaker Change: Q2 is another quarter of progress for the business as we continue to lay the groundwork for a successful Novavax-led co-commercialization effort with Sanofi beginning in 2025.

Speaker Change: and with a twenty-four twenty-five season stic less than one month away we have continued to lay the groundwork for success by updating and filing for authorization of our updated covid ' nineteen vaccine formulation

John Trezino: Please turn to slide eight. In the US, as John mentioned, we are concentrating our commercial efforts for the remainder of the year on our largest market, the US. This should enable us to drive continued cost savings starting this season and continuing into 2025 and beyond as we wind down our independent commercial presence in markets around the world, in anticipation of Santa Fe taking the lead on commercialization of our COVID-19 vaccine starting in 2025.

John Trizzino: In the U.S., as John mentioned, we are concentrating our commercial efforts for the remainder of the year on our largest market, the U.S. The product will be arriving in the U.S. this month and will be held in our warehouse as we await authorization before we can begin distribution. Turn next to slide 10.

John Trizzino: In the U.S., as John mentioned, we are concentrating our commercial efforts for the remainder of the year on our largest market, the U.S. This should enable us to drive continued cost savings starting this season and continuing into 2025 and beyond as we wind down our independent commercial presence in markets around the world in anticipation of Sanofi taking the lead on commercialization of our COVID-19 vaccine starting in 2025. Turn to slide nine.

Speaker Change: Please turn to slide 8.

Speaker Change: In the U.S., as John mentioned, we are concentrating our commercial efforts for the remainder of the year on our largest market, the U.S.

John: This should enable us to drive continued cost savings starting this season and continuing into 2025 and beyond as we wind down our independent commercial presence in markets around the world.

Operator: 2nd quarter, 2024 financial results and operational highlights conference call. Our participants will be on listen only mode. Should you need assistance, please signal the conference specialist by pressing star followed by zero.

Speaker Change: in anticipation of san fe taking a lead on commercialization of recovid ' nineteen vaccine starting in two thousand and twenty-five

John Trezino: Turn to slide nine. For the first time, we expect our product to be available in a pre-filter range in the US. The product will be arriving in the US this month and will be held in our warehouse as we await authorization before we can begin distribution.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask questions, please press star on your star one on your touchstone phone. To withdraw your question, please press star two. Please note, this event is being recorded.

Speaker: For the first time, we expect our product to be available in a pre-filled syringe in the U.S. It will be arriving in the U.S. this month and will be held in our warehouse as we await authorization before we can begin distribution. Turn next to slide 10.

Speaker Change: turned to slide nine

Speaker Change: For the first time, we expect our product to be available in a pre-filled syringe in the U.S. The product will be arriving in the U.S. this month and will be held in our warehouse as we await authorization before we can begin distribution.

John Trezino: Turn next to slide 10. We have adopted a highly targeted commercial approach and will focus on the retail pharmacy channel where over 90% of administrations occurred last season. We have secure contracts with CVS Pharmacy, Rite Aid, Walgreens, Costco, as well as regional grocers and independent pharmacies, and thus are tracking towards a significantly increased availability compared to last year. We have already initiated pre-season marketing efforts to build upon last year's campaign to drive increased awareness of new vaccinated.

Erika Schultz: I would now like to turn the call over to your speaker today, Erika Schultz, Senior Director and Investor Relations. Please go ahead. Good morning and thank you all for joining us today to discuss our 2nd quarter 2024 operational highlights and financial results.

Speaker: We have adopted a highly targeted commercial approach and will focus on the retail pharmacy channel, where over 90% of administrations occurred last season. In Europe, given our upcoming transition of primary commercial responsibilities to Sanofi, we plan to conduct a lean, limited, and targeted commercial launch in the region while still maintaining the necessary operations to ensure Sanofi is well positioned in Europe to execute beginning in 2025. We are already actively engaged in planning and partnership execution activities in the U.S. and Europe with the goal of creating a springboard for long-term value creation via enhanced Sanofi commercial sales of Novavaxvid while, at the same time, streamlining our own commercial execution for the upcoming season, with anticipated FDA authorization of our 2425 formulation ahead of the fall campaign, continued traction in driving retail availability, and increased product awareness.

Speaker: We have adopted a highly targeted commercial approach, and we'll focus on the retail pharmacy channel, where over 90% of administrations occurred last season. We have secured contracts with CVS Pharmacy, Rite Aid, Walgreens, Costco, as well as regional grocers and independent pharmacies, and thus are tracking towards significantly increased availability compared to last year. We have already initiated preseason marketing efforts to build upon last year's campaign to drive increased awareness of Novavax. Please turn to slide 11.

Speaker Change: Turn next to slide 10.

Speaker Change: we have adopted a highly targeted commercial approach and will'll focus on the retail pharmacy channel where are over ninety percent of administration' occurred last season

Speaker Change: we have secured contracts with cbs pharmacy right aid walgreens costsco as well as regional grocers and independent pharmacies and thus are tracking towards a significantly increased availability compared to last year

Erika Schultz: Approximately 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. Please turn to slide 2. Before we begin with prepared remarks, I need to remind you that this presentation includes four looking statements, including information relating to the future of Novavax. It's key strategic priorities. Statements related to potential royalties and milestones, operating plans, objectives, and prospects, full year 2024 financial guidance, the mountain impact of Novavax's cost reduction plans, its future financial or business performance conditions or strategies, its partnerships, anticipated timing and outcome, a future regulatory filings and actions, and the ongoing development, marketing opportunities, manufacturing capacity, and future availability of our vaccine candidates, and key upcoming milestones.

Speaker Change: we have already initiated preseason marketing efforts to build upon last year's campaign to drive increased awareness of new accident

Erika Schultz: Each four looking statement contained in this presentation is subject to risk and uncertainties that can cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears under the heading cautionary note regarding four looking statements. In the slide deck, we issued this morning and under the heading risk factors in our most recent form 10K and subsequent form 10Qs filed with the Security and Exchange Commission available at www.sec.gov and on our website at Novavax.com.

John Trezino: Please turn to slide 11. In Europe, given our upcoming transition of primary commercial responsibilities to Santa Fe, we plan to conduct a lean, limited, and targeted commercial launch in the region while still maintaining the necessary operations to ensure Santa Fe is well-positioned in Europe to execute beginning in 2025. This means we are focused on delivery of our updated vaccine in select European markets, including Germany, Italy, and Poland. We are already actively engaged in planning and partnership execution activities in the US and Europe with the goal of creating a springboard for long-term value creation via enhanced Santa Fe commercial sales of the Vaxivid while at the same time streamlining our own commercial execution for the upcoming season.

Speaker: In Europe, given our upcoming transition of primary commercial responsibilities to Sanofi, we plan to conduct a lean, limited, and targeted commercial launch in the region while still maintaining the necessary operations to ensure Sanofi is well positioned in Europe to execute beginning in 2025. This means we are focused on delivery of our updated vaccine in select European markets, including Germany, Italy, and Poland. We are already actively engaged in planning and partnership execution activities in the U.S. and Europe with the goal of creating a springboard for long-term value creation via enhanced Sanofi commercial sales of Novavaxvid while, at the same time, streamlining our own commercial execution for the upcoming season.

Speaker Change: please turn to slide eleven

Speaker Change: in europe given our upcoming transition of primary commercial responsibilities to sany we plan to conduct a lean limited and targeted commercial launch in the region while still maintaining the necessary operations to ensure sanfe is well positioned in europe to execute beginning in two thousand and twenty five

Speaker Change: This means we are focused on delivery of our updated vaccine in select European markets, including Germany, Italy, and Poland.

Speaker Change: We are already actively engaged in planning and partnership execution activities.

Speaker Change: in the U.S. and Europe with the goal of creating a springboard for a long-term value creation.

Speaker Change: via Enhanced Sanofi Commercial Sales of Nuvaxavid while at the same time streamlining our own commercial execution for the upcoming season.

John Trezino: The APA contracts we have been managing since the pandemic played an important role over the past few years in helping to manage vaccine distribution and access for millions of potential consumers around the world. As the pandemic has moved to annual seasonal vaccination and vaccination rates around the world for COVID have dropped. We are working with our government customers to renegotiate, adjust, or wear appropriate exit these agreements while preserving as much of their value as possible.

Speaker: The APA contracts we have been managing since the pandemic have played an important role over the past few years in helping to manage vaccine distribution and access for millions of potential consumers around the world. As the pandemic has moved to annual seasonal vaccination, and vaccination rates around the world for COVID have dropped, we are working with our government customers to renegotiate, adjust, or, where appropriate, exit these agreements while preserving as much of their value as possible.

Speaker Change: the apa contracts we have been managing since the pandemic played an important role over the past few years in helping to manage vaccine distribution and access for millions of potential consumers around the world

Speaker Change: As the pandemic has moved to annual seasonal vaccination,

Speaker Change: and vaccination rates around the world for covevid have dropped we are working with our government customers to renegotiate a just or where appropriate exit these agreements while preserving as much of their value as possible

Erika Schultz: The four looking statements in this presentation speak only as the original date of this presentation, and we undertake no obligation to update or revise any of these statements. Please turn to slide three. This presentation also includes references to a non-gap financial measure, which is for looking information for R&D and S-GNA expense as adjusted for expense reimbursements from Santa Fe under the Santa Fe agreement. Please turn to slide four.

John Trezino: To recap, we remain intently focused on and are well on track for a more successful US vaccination season than we experienced last year. With anticipated FDA authorization of our 24-25 formulation ahead of the fall campaign, manufacturing underway of our competitive pre-filled syringe presentation continued traction in driving retail availability and increased product awareness. We have all the components necessary for a better performance this 24-25 US vaccination season launch, which we are confident will serve as a foundation for a continued new Vaxivid uptake in 25 and beyond under-sanity.

Speaker: To recap, we remain intently focused on and are well on track for a more successful U.S. vaccination season than we experienced last year, with anticipated FDA authorization of our 2425 formulation ahead of the fall campaign. Manufacturing underway of our competitive pre-filled syringe presentation, continued traction in driving retail availability, and increased product awareness. We have all the components necessary for a better performance this 24-25 U.S. vaccination season launch, which we are confident will serve as a foundation for continued new vaccine uptake in 25 and beyond under Santa Fe. Now, I want to turn the call over to Bob to discuss our research and development updates.

Speaker Change: To recap, we remain intently focused on and are well on track for a more successful U.S. vaccination season than we experienced last year.

Speaker Change: With anticipated FDA authorization of our 24-25 formulation ahead of the fall campaign,

Speaker Change: Manufacturing underway of our competitive pre-filled syringe presentation.

Speaker Change: continued traction in driving retail availability and increased product awareness.

John Jacobs: Joining me today is John Jacobs, our President and CEO, who will provide an update on our progress during the quarter and highlight our four key value drivers. Additionally, John Tresino, our President and Chief Operating Officer, will provide an update on our operating activities and Dr. Bob Walker, Chief Medical Officer, and Interim Head of Research and Development.

Speaker Change: We have all the components necessary for a better performance this 24-25 U.S. vaccination season launch, which we are confident will serve as a foundation for continued new vaccine uptake in 25 and beyond under Sanofi.

Robert Walker: Now, I want to turn the call over to Bob to discuss our research and development updates.

Speaker Change: Now, I want to turn the call over to Bob to discuss our research and development updates.

Bob Walker: Please turn to slide 13. Thank you, John.

Robert Walker: Please turn to slide 13. Thank you, John. I'm going to present key updates and highlights from our research and development activities from the last quarter, which support the four key value drivers John outlined earlier. I'll discuss the 24-25 COVID-19 strain change, our kick and influenza programs, our efforts to expand potential opportunities for matrix M and our internal pre-clinical pipeline. Please turn to slide 14. With regard to our COVID-19 vaccine and the 24-25 strain change, we were pleased that the CDC renewed their recommendation for universal vaccination for everyone six months and older for the upcoming season with the updated vaccine and did not differentiate among manufacturers or vaccine strains.

John Jacobs: We'll discuss our clinical development and pipeline.

Bob Walker: Please turn to slide 13. Thank you, John .

Bob Walker: I'm going to present key updates and highlights from our research and development activities from the last quarter, which support the four key value drivers John outlined earlier. I'll discuss the 24-25 COVID-19 strain change, our kick and influenza program, our efforts to expand potential opportunities for Matrix M, and our internal preclinical pipeline. Please turn to slide 14.

Dr. Bob Walker: I'm going to present key updates and highlights from our research and development activities from the last quarter, which support the four key value drivers John outlined earlier. I'll discuss the 24-25 COVID-19 strain change, our kick and influenza program, our efforts to expand potential opportunities for Matrix M, and our internal preclinical pipeline. We submitted our regulatory packages for the strain change to both FDA and EMA in June, and we continue to work with the regulators to facilitate a smooth review and approval in the effort to have our vaccine available early in the vaccination season.

Jim Kelly: Finally, Jim Kelly, our Chief Financial Officer and Treasurer, will provide an overview of our financial results in implications of the Santa Fe partnership.

Bob Walker: I'm going to present key updates and highlights from our research and development activities from the last quarter, which support the four key value drivers John outlined earlier.

John Jacobs: I would now like to hand over the call to John Jacobs. Thank you, Erica. And thank you everyone for joining us.

Bob Walker: I'll discuss the 24-25 COVID-19 strain change, our KIC and influenza programs, our efforts to expand potential opportunities for Matrix M, and our internal preclinical pipeline.

John Jacobs: I'm pleased to be with you today along with the members of our executive team to highlight our recent achievements, progress on our annual priorities, and the shaping of a new vision for Novavax. When we spoke with you last quarter, we were taking the first steps on this exciting journey with the announcement of our global partnership with Sinofi. Our collaboration with Sinofi has allowed us to monetize the value of our COVID-19 vaccine and proven technology platform and freeze up resources to develop multiple opportunities in the vaccine space.

Bob Walker: With regard to our COVID-19 vaccine and the 24-25 strain change, we were pleased that the CDC renewed their recommendation for universal vaccination for everyone six months and older for the upcoming season with the updated vaccine and did not differentiate among manufacturers or vaccine strains. Our updated vaccine, which uses the JN1 strain, often characterized as the trunk of the tree from which the currently circulating variants emerged, is well positioned to compete with mRNA vaccines this fall in light of the guidance issued by the leading regulatory and policy body. We submitted our regulatory packages for the strain change to both FDA and EMA in June.

Bob Walker: please turn to slide fourteen

Speaker Change: with regard to our ccoubvid nineteen vaccine in the twenty-four twenty-five strain change we were pleased with the cdc renewed their recommendation for universal vaccination for everyone six months and older for the upcoming season with the updated vaccine

Bob Walker: and did not differentiate among among manufacturers or vaccine strains

Robert Walker: Our updated vaccine, which uses the JN1 strain, often characterized as the trunk of the tree from which the currently circulating variants emerged, is well-positioned to compete with the mRNA vaccines this fall. In light of the guidance issued by the leading regulatory and policy body. We submitted our regulatory packages for the strain change to both FDA and EMA in June, and we continue to work with the regulators to facilitate a smooth review and approval in the effort to have our vaccine available early in the vaccination season. And as you've already heard from John, our updated vaccine is on track to be in warehouses this month and is expected to be ready for distribution upon authorization.

John Jacobs: Since then, we have worked hard to execute on our objectives and our beginning to position the company back toward its roots as an innovation-driven organization while remaining a close commercial partner to Sinofi for our COVID-19 vaccine. We are beginning to evolve from a company that is independently manufacturing, distributing and commercializing vaccines on a global scale to a much more efficient and focused R&D model. This means that we intend to drive future value from additional business development activities and organic R&D, via our proven and validated technology platform, with plans to unveil a new and expanded clinical pipeline by the end of this year and to seek to execute our plans within a much leaner operating model in 2025 and beyond.

Bob Walker: our updated vaccine which uses the j and one strain often characterized as the trunk of the tree from which the currently circulating variance emerged

Bob Walker: is well-positioned to compete with the mRNA vaccines this fall in light of the guidance issued by the leading regulatory and policy bodies.

Bob Walker: we submitted our regulatory packages for the strange change to both fda and ea in june and we continue to work with the regulators to facilitate a smooth review and approval in the effort to have our vaccine available early in the vaccination season

Bob Walker: And we continue to work with the regulators to facilitate a smooth review and approval in the effort to have our vaccine available early in the vaccination season. And as you've already heard from John, our updated vaccine is on track to be in warehouses this month and is expected to be ready for distribution upon authorization. Please turn to slide 15.

Bob Walker: And as you've already heard from John , our updated vaccine is on track to be in warehouses this month and is expected to be ready for distribution upon authorization.

Robert Walker: Please turn to slide 15. We continue to monitor the performance of our JN1 vaccine against new variants in non-clinical studies. Our data indicate that our vaccine targeting JN1 should provide acceptable coverage for the currently circulating variants. This slide shows neutralizing antibody responses with JN1 vaccine in recessed macaques. You can see that the antibody titers are robust across the spectral variants, and this includes the KP3 and KP3.1.1 variants that are now widely circulating. Using these data, when we look at antigenic distance among these variants, shown in the table to the right, we see that in all cases, the antigenic distances are below 2.0 antigenic units, indicating that the variants are all antigenically similar to JN1.

John Jacobs: The potential value drivers of our business are outlined on slide 5 and include Value Driver 1, the Sinofi partnership, Value Driver 2, late stage pipeline, Value Driver 3, leveraging our proven technology platform to drive additional partnerships and deals and Value Driver 4, a new early stage pipeline. It is our intention that these potential value drivers will be supported by an appropriately scaled infrastructure with significantly reduced experiences for our 2020-24 baseline. Jim Kelly will provide more detail and clarity on our expense projections later on in the call.

Bob Walker: We continue to monitor the performance of our JN1 vaccine against new variants in non-clinical studies. Our data indicate that our vaccine targeting JN1 should provide acceptable coverage for the currently circulating variant. This slide shows neutralizing antibody responses to the JN1 vaccine in rhesus macaque. You can see that the antibody titers are robust across the spectrum of variants. And this includes the KP3 and KP3.1.1 variants that are now widely circulated.

Dr. Bob Walker: We continue to monitor the performance of our JN1 vaccine against new variants in non-clinical studies. Our data indicate that our vaccine targeting JN1 should provide acceptable coverage for the currently circulating variant. You can see that the antibody titers are robust across the spectrum of variants, indicating that the variants are all antigenically similar to JN1. We have alignment with FDA on the use of a single phase three immunogenicity study for both the kick and influenza program.

John: Please turn to slide 15.

Speaker Change: we continue to monitor the performance of our j and one vaccine against new variance in nonclinical studies

Speaker Change: Our data indicate that our vaccine targeting JN1 should provide acceptable coverage for the currently circulating variants.

Speaker Change: This slide shows neutralizing antibody responses with JN1 vaccine in rhesus macaques.

Speaker Change: You can see that the antibody titers are robust across the spectrum of variants.

Speaker Change: And this includes the KP3 and KP3.1.1 variants that are now widely circulating.

John Jacobs: So let's take a moment to expand on each of these potential value drivers that are intended to be the foundation of our new growth strategy for Novavax. Value Driver 1, the Sinofi partnership. The Sinofi partnership has four potential areas of value. First, immediate upfront payment and equity investment of approximately $570 million. Next, midterm milestones related to our partnered COVID-19 vaccine of approximately $350 million and Sinofi's independent Flu COVID-19 combination program were another $350 million.

Bob Walker: Using these data, when we look at the antigenic distance among these variants, shown in the table to the right, we see that in all cases the antigenic distances are below 2.0 antigenic units, indicating that the variants are all antigenically similar to JN1. And that has been the consistent observation since we started this monitoring, which we intend to continue to do for each newly prevalent variant throughout the season. So, as you can see, our data indicate that our vaccine targeting JN1 should provide acceptable coverage for the currently circulating variant. Please move to slide 6.

Speaker Change: Using these data, when we look at antigenic distance among these variants shown in the table to the right.

Speaker Change: We see that in all cases, the antigenic distances are below 2.0 antigenic units, indicating that the variants are all antigenically similar to JN1.

Robert Walker: And that has been the consistent observation since we've started this monitoring, which we intend to continue to do for each newly prevalent variant throughout the season. So, as you can see, our data indicate that our vaccine targeting JN1 should provide acceptable coverage for the currently circulating variants. Please move to slide 16. As John outlined, our second value driver is our late stage pipeline, which has the potential to deliver vaccine candidates. Our Phase III immunogenicity trial for our standalone influenza and kick vaccines remains on track to start in the fourth quarter of this year, with top-line data expected by the middle of 2025.

Speaker Change: And that has been the consistent observation since we've started this monitoring, which we intend to continue to do for each newly prevalent variant throughout the season.

Speaker Change: so as you can see our data indicate that our vaccine targeting j and one should provide acceptable coverage for the currently circulating variance

John Jacobs: Third, anticipated royalty streams from both of these programs and fourth, long-term royalties and or milestones from any other vaccines developed by Sinofi utilizing our COVID-19 vaccine and or our MatrixM adjuvant. That means, for example, any additional combination vaccine commercialized using our COVID vaccine is eligible for royalties. Also, any new vaccine developed using our Matrix M adjuvant is eligible for both milestones and royalties. That being said, the partnership structure offers potential opportunities for decades to come.

Bob Walker: As John outlined, our second value driver is our late stage pipeline, which has the potential to deliver vaccine candidates. Our Phase 3 immunogenicity trial for our standalone influenza and kick vaccines remains on track to start in the fourth quarter of this year, with top line data expected by the middle of 2025. We have alignment with FDA on the use of a single phase 3 immunogenicity study for both KIC and influenza programs and are still in dialogue with them on the feasibility of the accelerated approval pathway for both products. We look forward to bringing you additional updates as we continue to advance these programs.

Speaker Change: Please move to slide 16.

Speaker Change: As John outlined, our second value driver is our late-stage pipeline, which has the potential to deliver vaccine candidates.

John: Our Phase III immunogenicity trial for our standalone influenza and kick vaccines remains on track to start in the fourth quarter of this year with top-line data expected by the middle of 2025.

Robert Walker: We have alignment with FDA on the use of a single Phase III immunogenicity study for both kick and influenza programs, and are still in dialogue with them on the feasibility of the accelerated approval pathway for both products. We look forward to bringing you additional updates as we continue to advance these programs. Potential timeline and pathway to registration will be dependent upon full alignment with the FDA and the results of the trial. As a reminder, data from our Phase II study demonstrated that our kick vaccine induced anti-influenza neutralizing antibody levels into top three plots. HAI antibody levels in the bottom three plots and anti-spike neutralizing antibodies bottom left that were generally comparable, if not higher, than levels achieved after either of the comparator vaccines.

Speaker Change: we have alignment with fda on the use of a single phase three immunogenicity study for both kick and influena programs and are still in dialogue with him on the feasibility of the accelerated approval pathway for both products

John Jacobs: And because Sanofi is a global leader in vaccine development and commercialization with a substantial presence and proven track record in seasonal respiratory vaccines in the US and around the world, we have the utmost confidence and their ability to perform when they begin commercializing our COVID-19 vaccine next year and potentially launch multiple additional vaccines using our technology in the future.

Speaker Change: we look forward to bring you additional updates as we continue to advance these programs

Bob Walker: Potential timeline and pathway to registration will be dependent upon full alignment with FDA and the results of the trial. As a reminder, data from our phase two study demonstrated that our kick vaccine induced anti-influenza neutralizing antibody levels in the top three plots. HAI antibody levels in the bottom three plots and anti-spike neutralizing antibodies, bottom left, that were generally comparable, if not higher, than levels achieved after either of the comparator vaccines. We believe these results give us more confidence in the program and in the feasibility of an accelerated approval pathway for either or both vaccines, depending on final data reading.

Speaker Change: Potential timeline and pathway to registration will be dependent upon full alignment with FDA and the results of the trial.

Dr. Bob Walker: As a reminder, data from our Phase 2 study demonstrated that our kick vaccine induced anti-influenza neutralizing antibody levels in the top three plots and anti-spike neutralizing antibodies, bottom left. We believe these results give us more confidence in the program and in the feasibility of an accelerated approval pathway for either or both vaccines, depending on final data read. And we expect that with an anticipated fourth quarter start, we should have top-line data by the middle of 2025 to enable internal decision-making and potential partners, and to recent preclinical work aimed at expanding the utility of Matrix M, our saponin-based adjuvant.

Speaker Change: As a reminder, data from our Phase 2 study demonstrated that our kick vaccine induced anti-influenza neutralizing antibody levels in the top three plots.

John Jacobs: We look forward to providing further updates on our partnership at the appropriate time.

John Jacobs: Value driver 2, Novavax late stage pipeline. As we have stated on prior calls, we are on track to independently initiate our own late stage phase 3 trial in the fourth quarter of this year to evaluate our standalone influenza and COVID-19 influenza combination vaccines. Top line data from this trial is expected by the middle of 2025. These assets have already demonstrated promising phase 2 data. We intend to partner or monetize these assets assuming successful phase 3 results rather than commercialize them ourselves, which should allow us to avoid significant infrastructure expense and execution risk.

Speaker Change: hai antibody levels in the bottom three plots and anti-spike neutralizing antibodies bottom left that were generally comparable if not higher than levels achieved at after either of the comparator vaccines

Robert Walker: We believe these results give us more confidence in the program and in the feasibility of an accelerated approval pathway for either or both vaccines, depending on final data reads. Dow. In preparing to move into phase three, we have received FDA concurrence on the conduct of a single phase three immunogenicity study for both kick and stand-alone influenza vaccines. The trial will be conducted in older adults in the Southern Hemisphere in Australia and New Zealand during the off season. The FDA recommendations we have received during the pre-IMD process are being incorporated into the trial. And we expect that with an anticipated fourth quarter start, we should have top-line data by the middle of 2025 to enable internal decision-making and potential partnering.

Speaker Change: we believe these results give us more confidence in the program and in the feasibility of an accelerated approval pathway for either or both vaccines depending on final data reout

Bob Walker: In preparing to move into phase three, we have received FDA concurrence on the conduct of a single phase three immunogenicity study for both the kick and the standalone influenza vaccine. The trial will be conducted in older adults in the Southern Hemisphere, in Australia and New Zealand, during the off-season. The FDA recommendations we have received during the pre-IND process are being incorporated into the trial, and we expect that with an anticipated fourth quarter start, we should have top-line data by the middle of 2025 to enable internal decision-making and potential partnerships. Please turn to slide 18.

Speaker Change: in preparing to move into phas three we have received fda concurrence on the conduct of a single phase three immunogenicity study for both kick and standalonean influence of vaccines

John Jacobs: Moving on to value driver 3, leveraging our proven technology platform to drive additional partnerships and deals. Beyond the two late stage assets, our proven technology platform has the potential to offer other companies significant value. And our ambition is to be a partner of choice to help others enhance or even expand some of the established inline vaccine franchises of larger players. For example, we believe that matrix M can help enhance many existing vaccines in the portfolios of other companies by boosting immunogenicity and lowering cogs without adding to the side effects burden.

Speaker Change: The trial will be conducted in older adults in the Southern Hemisphere in Australia and New Zealand during the off season.

Speaker Change: the fda recommendations we have received during the preiimd process are being incorporated into the trial

Speaker Change: And we expect that with an anticipated fourth quarter start, we should have top-line data by the middle of 2025 to enable internal decision-making and potential partnering.

Robert Walker: Please turn to slide 18. Now I'd like to turn our attention to our proven tech platform, our third value driver, and to recent pre-clinical work aimed at expanding the utility of Matrix M, our sepinin-based adjuvant. Because we know that matrix M is a potent adjuvant for our nanoparticle viral vaccines, we decided to investigate whether matrix could boost immune responses in other vaccines, such as inactivated influenza split virus vaccine already licensed. The results I'll show you indicate that matrix M increases the magnitude and breadth of antibody responses when given with a licensed egg-based influenza vaccine, with the potential to produce a more potent, more highly protective vaccine.

Bob Walker: Now I'd like to turn our attention to our proven tech platform, our third value driver, and to recent preclinical work aimed at expanding the utility of matrix M, our saponin-based adjuvant. Because we know that matrix M is a potent adjuvant for a nanoparticle viral vaccine. We decided to investigate whether Matrix could boost immune responses in other vaccines, such as an inactivated influenza split virus vaccine already licensed. The results I'll show you indicate that Matrix M increases the magnitude and breadth of antibody responses when given with a licensed egg-based influenza vaccine, with the potential to produce a more potent, more highly protective vaccine.

Speaker Change: Please turn to slide 18.

Speaker Change: Now I'd like to turn our attention to our proven tech platform, our third value driver, and to recent preclinical work aimed at expanding the utility of MatrixM, our saponin-based adjuvant.

John Jacobs: Later in this call, Bob Walker will share some new data with you as an example of this capability. These matrix M attributes may also enable companies with clinical stage vaccine portfolios to make those vaccines more competitive as they strive for the best product profile and even allow for the creation of new vaccines that might not have otherwise been possible. We continue to explore the potential of our technology and believe that we have only just begun to tap into the value of our platform, to our company and portfolio and to that of other vaccine companies.

Speaker Change: Because we know that matrix M is a potent adjuvant for our nanoparticle viral vaccines, we decided to investigate whether matrix could boost immune responses in other vaccines.

Dr. Bob Walker: We decided to investigate whether Matrix could boost immune responses in other vaccines. The results I'll show you indicate that Matrix M increases the magnitude and breadth of antibody responses when given with a licensed egg-based influenza vaccine and in mice vaccinated with the same vaccine plus Matrix in the right form. Responses to all four influenza strains are boosted in the vaccine plus matrix group. In the figure to the right, competition binning experiments against a panel of monoclonal antibodies demonstrate that matrix-induced antibodies are directed to conserved epitopes in the HA, resulting in broader cross-reactive responses.

Speaker Change: such as in inactivated influenza split virus vaccine already licensed.

Speaker Change: the results i'll show you indicate that matrix and increases the magnitude and brenth of antibody responses when given with a licensed egg-based influencez vaccine with the potential to produce a more potent more highly protective vaccine

John Jacobs: And finally value driver 4, new early stage pipeline. Our final and fourth potential value driver is the development of our own early stage organic pipeline. Rather than focus our efforts on seasonal commercial execution of a single vaccine asset, we will instead invest our time, energy, and capital on the development of an expanded pipeline that uses our recombinant nanoparticle technology platform to develop new assets focused on infectious disease and respiratory, as well as potentially vaccines in other disease or areas of the world.

Robert Walker: In the figure on the left, our ag HAI responses in mice vaccinated with a licensed, inactivated quadrivalent influenza vaccine in the left four bars, and in mice vaccinated with the same vaccine plus matrix in the right four bars. Responses to all four influenza strains are boosted in the vaccine plus matrix group. In the figure to the right, competition-bending experiments against a panel of monoclonal antibodies demonstrate that matrix-induced antibodies directed to conserved epitopes in the HA, resulting in broader, cross-reactive responses. These data demonstrate one of the most important attributes of matrix, its ability to increase the magnitude and breadth of antibody responses, with the potential to produce a more potent, more highly protective vaccine.

Bob Walker: The figure on the left shows Ag HAI responses in mice vaccinated with a licensed inactivated quadrivalent influenza vaccine in the left forebar and in mice vaccinated with the same vaccine plus matrix in the right form. Responses to all four influenza strains are boosted in the vaccine plus matrix group. In the figure to the right, competition binning experiments against a panel of monoclonal antibodies demonstrate that matrix-induced antibodies are directed to conserved epitopes in the HA, resulting in broader cross-reactive responses.

Speaker Change: in the figure on the left our egg hai responses in mice speaccinated with a licensed inactivated quadriland influence of vaccine in the left four bars

Speaker Change: And in mice vaccinated with the same vaccine plus matrix in the right four bars.

Speaker Change: Responses to all four influenza strains are boosted in the vaccine plus matrix group.

Speaker Change: In the figure to the right, competition binning experiments against a panel of monoclonal antibodies demonstrate that matrix-induced antibodies directed to conserved epitopes in the HA, resulting in broader cross-reactive responses.

John Jacobs: We will be looking to develop assets that we believe can make a significant difference for global public health and at the same time present a significant commercial opportunity. City. We reserve the right to develop, launch, and commercialize any of these assets ourselves should the emerging data and business case support us.

Bob Walker: These data demonstrate one of the most important attributes of MATRIX, its ability to increase the magnitude and breadth of antibody responses with the potential to produce a more potent, more highly protective vaccine. Please turn to slide 19.

Dr. Bob Walker: These data demonstrate one of the most important attributes of matrix, its ability to increase the magnitude and breadth of antibody responses with the potential to produce a more potent, highly protective vaccine. We wanted to explore whether the benefits of MATRIX could be extended to bacterial vaccines. A similar adjuvant effect was observed when looking at functional antibodies that mediate subtype-specific killing, or OPK, a known correlate. OPK responses were increased 2.6 to 7.5-fold in mice that received the vaccine with MATRIX for the four subtypes shown on the right.

Speaker Change: these data demonstrate one of the most important attributes of matrix its ability to increase the magnitude and breadth of antibodbody responses with the potential to produce some more potent more highly protective vaccine

John Jacobs: For the remainder of 2024, and in line with our key value drivers, we will continue to execute on our four priorities, which you should be see on slide six. And these priorities are priority one, the successful execution of our new partnership with Santa Fe. Priority two, driving incremental value from our technology platform via the initiation of our phase three trial for kick and flu, the development and unveiling of our new refreshed pipeline, and pursuing new business development opportunities.

Robert Walker: Please turn to slide 19.

Robert Walker: But what about the potential for matrix M to enhance the activity of non-protein and non-viral vaccines? Bacterial capsular polysaccharides are known to be poorly immunogenic vaccine antigens, especially in infants and young children. And we wanted to explore whether the benefits of matrix could be extended to bacterial vaccines. In this experiment, mice were vaccinated with a pneumococcal vaccine, either with or without matrix added, and anti-pneumococcal IgG antibody titers were increased over eightfold in mice that received vaccine plus matrix. A similar adjuvant effect was observed in looking at functional antibodies that mediate subtype specific killing or OPK, a known correlates.

Bob Walker: But what about the potential for matrix M to enhance the activity of non-protein and non-viral vaccines? Bacterial capsular polysaccharides are known to be poorly immunogenic vaccine antigens, especially in infants and young children. And we wanted to explore whether the benefits of MATRIX could be extended to bacterial vaccines. In this experiment, mice were vaccinated with a pneumococcal vaccine, either with or without matrix added, and anti-pneumococcal IgG antibody titers were increased over eightfold in mice that received the vaccine plus matrix.

John Jacobs: Priority three, continue to reduce our R&D and SGNA costs and line with our prior stated targets and prepare for additional significant reductions to scale and cost as we enter 2025 and beyond. And finally, priority four, delivering our updated COVID-19 vaccine for the 24-25 fall vaccination season.

Speaker Change: Please turn to slide 19.

Speaker Change: to

Speaker Change: But what about the potential for Matrix M to enhance the activity of non-protein and non-viral vaccines?

Bob Walker: A similar adjuvant effect was observed when looking at functional antibodies that mediate subtype-specific killing, or OPK, a known correlate. OPK responses were increased 2.6 to 7.5-fold in mice that received vaccine with matrix for the four subtypes shown on the right. And notably, the subtype with especially low immunogenicity, subtype 23F at the bottom right, showed the greatest increase, 7.5-fold, with the addition of matrix. These preliminary data I've shown you suggest that MATRIX could play an important role in augmenting certain currently available vaccines, such as influenza and pneumococcal vaccines, by increasing the quality and duration of immunity, reducing the amount of antigen needed, and thus lowering manufacturing costs.

Speaker Change: Bacterial capsular polysaccharides are known to be poorly immunogenic vaccine antigens, especially in infants and young children.

Speaker Change: and we wanted to explore whether the benefits of matrix could be extended to bacterial vaccines

Speaker Change: In this experiment, mice were vaccinated with a pneumococcal vaccine, either with or without matrix added, and anti-pneumococcal IgG antibody titers were increased over eightfold in mice that received vaccine plus matrix.

Speaker Change: a similar adedjine an effect was observed in looking at functional antibodies that mediate subtype specific killing or opk a known correllet

John Jacobs: As we enter the second half of this year, we look forward to sharing more details on our updated plans as we continue to forge a new path forward.

Robert Walker: O.P.K. Responses were increased 2.6- to 7.5-fold in mice that received vaccine with matrix for the four subtypes shown on the right. And notably, the subtype with a specially low immunogenicity, subtype 23F at the bottom right, showed the greatest increase, 7.5-fold, with the addition of matrix. These preliminary data have shown you suggest that matrix could play an important role in augmenting certain currently available vaccines, such as influenza and pneumococcal vaccines, by increasing the quality and duration of immunity, reducing the amount of antigen needed per dose, and lowering manufacturing costs. Our data also suggests that the repertoire of antigens that could be combined with matrix for clinical benefit could perhaps be expanded to include bacterial polysaccharides, which we regard as an exciting area for more research.

Speaker Change: OPK responses were increased 2.6 to 7.5-fold in mice that received vaccine with matrix for the four subtypes shown on the right.

John Trizzino: Now, I would like to hand it over to the team to discuss our results from the quarter in more detail, beginning with John Trezino for our operating updates. John? Thank you, John.

Dr. Bob Walker: And notably, the subtype with especially low immunogenicity, subtype 23F at the bottom right, showed the greatest increase, 7.5-fold, with the addition of matrix, by increasing the quality and duration of immunity, reducing the amount of antigen needed, and lowering manufacturing costs. Our data also suggest that the repertoire of antigens that could be combined with matrix for clinical benefit could perhaps be expanded to include bacterial polysaccharides. At our last earnings call, we shared the animal model results on this slide.

Speaker Change: And notably, the subtype with especially low immunogenicity, subtype 23F at the bottom right, showed the greatest increase, 7.5-fold, with the addition of matrix.

John Trizzino: Q2 was another quarter of progress for the business, as we continued to lay the groundwork for a successful new exhibit co-commercialization effort with Santa Fe beginning in 2025. And with a 24-25 season start less than one month away, we have continued to lay the groundwork for success by updating and filing for authorization of our updated COVID-19 vaccine formulation. Please turn to slide eight. In the US, as John mentioned, we are concentrating our commercial efforts for the remainder of the year on our largest market, the US.

Speaker Change: These preliminary data I've shown you suggest that MATRIX could play an important role in augmenting certain currently available vaccines, such as influenza and pneumococcal vaccines.

Speaker Change: by increasing the quality and duration of immunity, reducing the amount of antigen needed per dose, and lowering manufacturing costs.

Bob Walker: Our data also suggests that the repertoire of antigens that could be combined with MATRIX for clinical benefit could perhaps be expanded to include bacterial polysaccharides, which we regard as an exciting area for more research. We believe that these matrix attributes could be attractive to partners with established vaccine franchises. Please turn to slide 20.

Speaker Change: Our data also suggests that the repertory of antigens that could be combined with matrix for clinical benefit could perhaps be expanded to include bacterial polysaccharides.

John Trizzino: This should enable us to drive continued cost savings starting this season and continuing into 2025 and beyond as we wind down our independent commercial presence in markets around the world, in anticipation of Santa Fe taking the lead on commercialization of our COVID-19 vaccine starting in 2025. Turn to slide nine. For the first time, we expect our product to be available in a pre-filled syringe in the US. The product will be arriving in the US this month and will be held in our warehouse as we await authorization before we can begin distribution.

Robert Walker: We believe that these matrix attributes could be attractive to partners with established vaccine franchises. Please turn to slide 20. Finally, I want to discuss our new early stage pipeline, which is our fourth value driver. As you heard, we are in the middle of a strategic assessment of our technology platform to determine how to best expand and refresh a new full product pipeline for NOVAVAX, and we are excited about the new initiatives that may spring from that review. As we work to complete this analysis, in parallel, we have continued to advance our RSV and avian influenza H5N1 preclinical vaccine candidates and continue to prepare both to move into the clinic.

Speaker Change: which we regard as an exciting area for more research.

Speaker Change: We believe that these matrix attributes could be attractive to partners with established vaccine franchises.

Bob Walker: Finally, I want to discuss our new early stage pipeline, which is our fourth value driver. As you know, we are in the middle of a strategic assessment of our technology platform to determine how to best expand and refresh a new full product pipeline for Novavax. And we are excited about the new initiatives that may spring from that review. As we work to complete this analysis, in parallel, we have continued to advance our RSV and avian influenza H5N1 preclinical vaccine candidates and continue to prepare both to move into the clinic.

Speaker Change: please turn to slide twenty

Speaker Change: Finally, I want to discuss our new early-stage pipeline, which is our fourth value driver.

Speaker Change: As you heard, we are in the middle of a strategic assessment of our technology platform to determine how to best expand and refresh a new full product pipeline for Novavax.

John Trizzino: Turn next to slide ten. We have adopted a highly targeted commercial approach and will focus on the retail pharmacy channel where over 90% of administrations occurred last season. We have secured contracts with CVS pharmacy, right aid, Walgreens, Costco, as well as regional grocers and independent pharmacies and thus are tracking towards a significantly increased availability compared to last year. We have already initiated pre-season marketing efforts to build upon last year's campaign to drive increased awareness of new vaccinated. Please turn to slide eleven.

Speaker Change: And we are excited about the new initiatives that may spring from that review.

Speaker Change: as we work to complete this analysis in parallel we have continued to advance our rsv and avian influenza h five and one preclinical vaccine candidates and continue to prepare both to move into the clinic

Robert Walker: At our last earnings call, we shared the animal model results on this slide. On the left are data showing that our RSV nanoparticle vaccine with matrix was more immunogenic for both A and B subgroups than a comparator RSV vaccine with ASO1E measurement. We believe our RSV candidate, the still early in development, has the potential to be first in class for both safety because of matrix M and effectiveness. The data on the right are for our H5N1 vaccine, showing that a single boost by injection was highly immunogenic in non-human primates, previously primed with a seasonal influenza vaccine.

Bob Walker: At our last earnings call, we shared the animal model results on this slide. On the left, data showing that our RSV nanoparticle vaccine with matrix was more immunogenic for both A and B subgroups than a comparator RSV vaccine with AS01E adjuvant. We believe our RSD candidate, though still early in development, has the potential to be first in class for both safety because of matrix M and effect. The data on the right are for our H5N1 vaccine, showing that a single boost by injection was highly immunogenic in non-human primates previously primed with a seasonal influenza vaccine.

Speaker Change: At our last earnings call, we shared the animal model results on this slide.

Dr. Bob Walker: On the left are data showing that our RSV nanoparticle vaccine with matrix was more immunogenic for both A and B subgroups than a comparator RSV vaccine with AS01E adjuvant, showing that a single boost by injection was highly immunogenic in non-human primates previously primed with a seasonal influenza vaccine. And even a single intranasal boost in RET showed responses above the commonly accepted threshold for protection of 1 to 40. An effective one-dose regimen for a pandemic influenza vaccine would provide a paradigm shift in public health and pandemic preparedness.

Speaker Change: On the left are data showing that our RSV nanoparticle vaccine with matrix was more immunogenic for both A and B subgroups than a comparator RSV vaccine with AS01E adjuvant.

John Trizzino: In Europe, given our upcoming transition of primary commercial responsibilities to Santa Fe, we plan to conduct a lean, limited, and targeted commercial launch in the region, while still maintaining the necessary operations to ensure Santa Fe is well positioned in Europe to execute beginning in 2025. This means we are focused on delivery of our updated vaccine in select European markets, including Germany, Italy, and Poland. We are already actively engaged in planning and partnership execution activities in the US and Europe, with the goal of creating a springboard for long-term value creation via enhanced Santa Fe commercial sales of the Vaxivid, while at the same time streamlining our own commercial execution for the upcoming season.

Speaker Change: We believe our RSV candidate, though still early in development, has the potential to be first in class for both safety, because of matrix M, and effectiveness.

Speaker Change: The data on the right are for our H5N1 vaccine.

Speaker Change: showing that a single boost by injection was highly immunogenic in non-human primates previously primed with a seasonal influenza vaccine.

Robert Walker: And even a single intranasal boost in red showed responses above the commonly accepted threshold for protection of 1-40. An effective 1-dose regimen for a pandemic influenza vaccine would provide a paradigm shift in public health and pandemic preparedness by providing more rapid protection and the potential to save many more lives than the current stockpiled 2-dose regimens. We plan to start IND enabling studies for both vaccines as soon as next month to support the start of phase 1 clinical trials. And you will hear more from us later this year about additional areas of development for our technology.

Bob Walker: And even a single intranasal boost in RIT showed responses above the commonly accepted threshold for protection of 1 to 40. An effective one-dose regimen for a pandemic influenza vaccine would provide a paradigm shift in public health and pandemic preparedness by providing more rapid protection and the potential to save many more lives than the current stockpiled two-dose regimen. We plan to start IND-enabling studies for both vaccines as soon as next month to support the start of phase one clinical trials, and you will hear more from us later this year about additional areas of development for our technology. Now, to discuss our financials for the quarter, I want to hand the call to Jim.

Speaker Change: and even a single interiesasal boost in rent show responses above the commonly accepted threshold for protection of one and forty

Speaker Change: An effective one-dose regimen for a pandemic influenza vaccine would provide a paradigm shift in public health and pandemic preparedness by providing more rapid protection and the potential to save many more lives than the current stockpiled two-dose regimens.

Dr. Bob Walker: We plan to start IND-enabling studies for both vaccines as soon as next month to support the start of Phase 1 clinical trials, and you will hear more from us later this year about additional areas of development for our technology. Now, to discuss our financials for the quarter, I want to hand the call to Jim.

John Trizzino: The APA contracts we have been managing since the pandemic played an important role over the past few years in helping to manage vaccine distribution and access for millions of potential consumers around the world. As the pandemic has moved to annual seasonal vaccination, and vaccination rates around the world for COVID have dropped. We are working with our government customers to renegotiate, adjust, or wear appropriate exit these agreements while preserving as much of their value as possible.

Speaker Change: We plan to start IND-enabling studies for both vaccines as soon as next month to support the start of Phase I clinical trials, and you will hear more from us later this year about additional areas of development for our technology.

James Kelly: Now, to discuss our financials for the quarter, I want to hand the call to Jim.

Speaker Change: Now, to discuss our financials for the quarter, I want to hand the call to Jim.

James Kelly: Thank you, Bob. Please turn to slide 22. We're focused on improving the financial health and performance of Novavax to enable long-term value creation. Today, we outline more detailed plans to deliver on this vision. To begin, I'll share a few of the key themes for the second quarter of 2024 and look towards full-year 2024 and beyond. For the second quarter of 2024, Novavax recorded total revenue of 415 million, consisting primarily of 391 million from the gap revenue recognition for the 500 million upfront payment from Sonofi received fully in the second quarter. The remaining 119 million from the upfront milestone payment will be allocated over the transition services period through 2026.

Jim Kelly: Please turn to slide 22. We're focused on improving the financial health and performance of Novavax to enable long-term value creation. Today, we outline more detailed plans to deliver on this vision. To begin, I'll share a few of the key themes for the second quarter of 2024 and a look toward full year 2024 and beyond.

Jim Kelly: Thank you, Bob. Please turn to slide 22.

Speaker: We're focused on improving the financial health and performance of Novavax to enable long-term value creation. Today, we outline more detailed plans to deliver on this vision.

Jim Kelly: we're focused on improving the financial health and performance of novavax to enable long-term value creation

John Trizzino: To recap, we remain intently focused on and are well on track for a more successful US vaccination season than we experienced last year. With anticipated FDA authorization of our 24-25 formulation ahead of the fall campaign, manufacturing underway of our competitive pre-filled syringe presentation, continued traction in driving retail availability and increased product awareness, we have all the components necessary for a better performance this 24-25 US vaccination season launch, which we are confident will serve as a foundation for a continued new Vaxivid uptake in 25 and beyond under Santa Fe.

Jim Kelly: For the second quarter of 2024, Novavax recorded total revenue of $415 million, consisting primarily of $391 million from the Gap Revenue Recognition. The $500 million upfront payment from Sanofi was received fully in the second quarter. The remaining $119 million from the upfront milestone payment will be allocated over the transition services period through 2026.

Jim Kelly: Today, we outline more detailed plans to deliver on this vision.

Jim Kelly: To begin, I'll share a few of the key themes for the second quarter of 2024 and a look towards full year 2024 and beyond.

Speaker: For the second quarter of 2024, Novavax recorded total revenue of $415 million, consisting primarily of $391 million from the GAAP revenue recognition for the $500 million upfront payment from Sanofi received fully in the second quarter. As we continue to transform Novavax into a more lean and agile organization, we reduced our second quarter 2024 combined R&D and SG&A by 34% compared to the prior year. When excluding Santa Fe transaction costs for the period, we saw a decrease of 43 percent.

Jim Kelly: For the second quarter of 2024, Novavax recorded total revenue of $415 million, consisting primarily of $391 million from the GAAP revenue recognition for the $500 million upfront payment from Sanofi received fully in the second quarter.

Jim Kelly: The remaining $119 million from the upfront milestone payment will be allocated over the transition services period through 2026.

James Kelly: We estimate full-year revenue recognition for this upfront payment to be approximately 400 million for 2024 and the remaining 100 million evenly split across 2025 and 2026. We have incorporated this gap revenue recognition into our full-year 2024 guidance. As we continue to transform Novavax into a more lean and agile organization, we reduced our second quarter 2024 combined R&D and SG&A by 34% compared to prior year. When excluding Santa Fe transaction costs for the period, we saw a decrease of 43%. As we look forward to the full-year 2024, we are reiterating our targeted guidance for combined R&D and SG&A expenses of between 700 and 750 million as we continue to resize our organization.

Jim Kelly: We estimate full-year revenue recognition for the subfront payment to be approximately $400 million for 2024, and the remaining $100 million evenly split across 2025 and 2026. We have incorporated this gap revenue recognition into our full-year 2024 guidance. As we continue to transform Novavax into a more lean and agile organization, we reduced our second quarter 2024 combined R&D and SG&A by 34% compared to the prior year. Additionally, when excluding Santa Fe transaction costs for the period, we saw a decrease of 43%.

Speaker Change: We estimate full-year revenue recognition for this upfront payment to be approximately $400 million for 2024, and the remaining $100 million evenly split across 2025 and 2026.

Bob Walker: Now, I want to turn the call over to Bob to discuss our research and development updates. Please turn to slide 13. Thank you, John.

Bob Walker: I'm going to present key updates and highlights from our research and development activities from the last quarter, which support the four key value drivers John outlined earlier. I'll discuss the 24-25 COVID-19 strain change, our kick and influenza programs, our efforts to expand potential opportunities for Matrix M, and our internal pre-clinical pipeline. Please turn to slide 14. With regard to our COVID-19 vaccine and the 24-25 strain change, we were pleased that the CDC renewed their recommendation for universal vaccination for everyone six months and older for the upcoming season with the updated vaccine and did not differentiate among manufacturers or vaccine strains.

Speaker Change: we have incorporated this gap revenue recognition into our fullyear two thousand and twenty-four guidance

Speaker Change: As we continue to transform Novavax into a more lean and agile organization, we reduced our second quarter 2024 combined R&D and SG&A by 34% compared to prior year.

Speaker Change: When excluding Santa Fe transaction costs for the period, we saw a decrease of 43%.

Jim Kelly: As we look forward to the full year 2024, we are reiterating our targeted guidance for combined R&D and SG&A expenses of between $700 and $750 million as we continue to resize our organization. Novavax is prepared to initiate an additional cost reduction program to further reduce combined R&D and SG&A expenses, a portion of which we expect to be reimbursed by Santa Fe under the agreement. For 2025, net of reimbursement, we're targeting non-GAAP combined R&D and SG&A of below $450 million. We ended the second quarter of 2024 with cash and accounts receivable of approximately $1.1 billion.

Speaker Change: As we look forward to the full year 2024, we are reiterating our targeted guidance for combined R&D and SG&A expenses of between $700 and $750 million as we continue to resize our organization.

James Kelly: Novavax is prepared to initiate an additional cost reduction program to further reduce combined R&D and SG&A expenses, a portion of which we expect to be reimbursed by Santa Fe under the agreement. For 2025 and net of reimbursement, we're targeting non-GAAP combined R&D and SG&A below 450 million. We ended the second quarter of 2024 with cash and accounts receivable of approximately 1.1 billion. We believe the Santa Fe Agreement provides for a multi-billion-dollar cash flow over time. During the second quarter of 2024, we received approximately 570 million in cash payments that further improved our financial position. Importantly, we are prioritizing the completion of our APAs, enabling a reduction to Novavax commercial operating activities and complexity as a means to further reduce our costs.

Speaker Change: Novavax is prepared to initiate an additional cost reduction program to further reduce combined R&D and HDNA expenses, a portion of which we expect to be reimbursed by Sanofi under the agreement.

Bob Walker: Our updated vaccine, which uses the JN1 strain, often characterized as the trunk of the tree from which the currently circulating variants emerged, is well positioned to compete with the mRNA vaccines this fall, in light of the guidance issued by the leading regulatory and policy body. We submitted our regulatory packages for the strain change to both FDA and EMA in June, and we continue to work with the regulators to facilitate a smooth review and approval in the effort to have our vaccine available early in the vaccination season.

Speaker: For 2025 and net of reimbursement, we're targeting non-GAAP combined R&D and SG&A of below $450 million. We ended the second quarter of 2024 with cash and accounts receivable of approximately $1.1 billion. Importantly, we are prioritizing the completion of our APAs, enabling a reduction in Novavax commercial operating activities and complexity as a means to further reduce our costs. These periods include $24 million and $31 million, respectively, related to excess, obsolete, and expired inventory, losses on firm purchase commitments, and unutilized manufacturing. The anticipated present value of the royalties on Sanofi's Navaxavid, FluCovid combination products, and new vaccines with MatrixM is expected to be the largest individual component of value from this transaction. Please turn to slide 20.

Speaker Change: For 2025, a net of reimbursement, we're targeting non-GAAP combined R&D and SG&A of below $450 million.

Speaker Change: We ended the second quarter of 2024 with cash and accounts receivable of approximately $1.1 billion.

Jim Kelly: We believe the Sanofi Agreement provides for a multi-billion dollar cash flow over time. In the second quarter of 2024, we received approximately $570 million in cash payments that further improved our financial position. Importantly, we are prioritizing the completion of our APAs, enabling a reduction in Novavax commercial operating activities and complexity as a means to further reduce our costs; please turn to slide 23 for a more detailed review of our second quarter 2024 results.

Speaker Change: We believe the Santa Fe Agreement provides for a multi-billion dollar cash flow over time. During the second quarter of 2024, we received approximately $570 million in cash payments that further improved our financial position.

Bob Walker: And as you've already heard from John, our updated vaccine is on track to be in warehouses this month and is expected to be ready for distribution upon authorization. Please turn to slide 15. We continue to monitor the performance of our JN1 vaccine against new variants in non-clinical studies. Our data indicate that our vaccine targeting JN1 should provide acceptable coverage for the currently circulating variants. This slide shows neutralizing antibody responses with JN1 vaccine in recessed macaques.

Speaker Change: Importantly, we are prioritizing the completion of our APAs, enabling a reduction to Novavax commercial operating activities and complexity as a means to further reduce our costs.

James Kelly: Please turn to slide 23 for a more detailed review of our second quarter 2024 results. For the second quarter of 2024, we recorded total revenue of 415 million compared to 424 million in the same period in 2023. Our products sales of 20 million in the second quarter of 2024 were primarily related to the expiration of certain EPA purchases. Rites. Our cost of sales for the second quarter of 2024 was 46 million, as compared to 56 million for the same period in 2023. These periods include 24 million and 31 million, respectively, related to excess obsolete and expired inventory, losses on firm purchase commitments, and unutilized manufacturing capacity.

Speaker Change: Please turn to slide 23 for a more detailed review of our second quarter 2024 results.

Jim Kelly: For the second quarter of 2024, we recorded total revenue of $415 million, compared to $424 million in the same period in 2023. Our product sales of $20 million in the second quarter of 2024 were primarily related to the expiration of certain APA purchase rights. Our cost of sales for the second quarter of 2024 was $46 million as compared to $56 million for the same period in 2023. These periods include $24 million and $31 million, respectively, related to excess, obsolete, and expired inventory, losses on firm purchase commitments, and unutilized manufacturing.

Speaker Change: for the second quarter of two thousand and twenty-four we recorded total revenue of four hundred and fifteen million compared to four hundred and twenty-four million in same period in two thousand and twenty three

Bob Walker: You can see that the antibody titers are robust across the spectral variants, and this includes the KP3 and KP3.1.1 variants that are now widely circulating. Using these data, when we look at antigenic distance among these variants, shown in the table to the right, we see that in all cases the antigenic distances are below 2.0 antigenic units, indicating that the variants are all antigenically similar to JN1. And that has been the consistent observation since we've started this monitoring, which we intend to continue to do for each newly prevalent variant throughout the season. So, as you can see, our data indicate that our vaccine targeting JN1 should provide acceptable coverage for the currently circulating variants. Please move to slide 16.

Speaker Change: our product sales of twenty million in the second quarter of two thousand and twenty four were primarily related to the expiration of certain apa purchase rights

Speaker Change: Our cost of sales for the second quarter of 2024 were $46 million as compared to $56 million for the same period in 2023.

Speaker Change: These periods include $24 million and $31 million, respectively, related to excess, obsolete, and expired inventory, losses on firm purchase commitments, and unutilized manufacturing capacity.

James Kelly: As previously noted for the second quarter of 2024, Novavax's combined R&D and SG&A of 208 million reflects a 34 percent reduction from the same period in 2023. Excluding the 31 million in Santa Fe transaction cost, our second quarter 2024 combined R&D and SG&A was approximately flat to the first quarter of 2024. turn across upfront equity investments, milestones, and royalties. The anticipated present value of the royalties on synophies, Novavaxivid, FluCOVID, and combination products, and new vaccines with matrix ends are expected to be the largest individual component of value from this transaction.

Jim Kelly: As previously noted, for the second quarter of 2024, Novavax's combined R&D and SG&A of $208 million reflects a 34 percent reduction from the same period in 2023. Excluding the 31 million in Santa Fe transaction costs, our second quarter 2024 combined R&D and SG&A was approximately flat to the first quarter of 20; please turn to slide 12. The Sanofi Agreement provides for a multi-billion dollar potential across upfronts, equity investments, milestones, and royalties.

Speaker Change: As previously noted, for the second quarter of 2024, Novavax's combined R&D and SG&A of $208 million reflects a 34% reduction from the same period in 2023.

Speaker Change: Excluding the $31 million in Santa Fe transaction costs, our second quarter of 2024 combined R&D and SG&A was approximately flat to the first quarter of 2024.

Jim Kelly: As John outlined, our second value driver is our late stage pipeline, which has the potential to deliver vaccine candidates. Our Phase III immunogenicity trial for our standalone influenza and kick vaccines remains on track to start in the fourth quarter of this year, with top-line data expected by the middle of 2025. We have alignment with FDA on the use of a single Phase III immunogenicity study for both kick and influenza programs, and are still in dialogue with them on the feasibility of the accelerated approval pathway for both products.

Speaker Change: Please turn to slide 24.

Speaker Change: The Sanofi Agreement provides for a multi-billion dollar potential across upfronts, equity investments, milestones, and royalties.

Jim Kelly: The anticipated present value of the royalties on Sanofi's Navaxavid, FluCovid, and Combination products and new vaccines with MatrixM is expected to be the largest individual component of value from this transaction. Of note, this agreement reflects just one of the four pillars of value for Novavax. And given its many layers, it's worth another review to be better approached.

Speaker Change: the anticipate present value of the royalties on sinophes nevaccated flu covid comb and combination products and new vaccines with matrix sims

Speaker Change: are expected to be the largest individual component of value from this transaction.

James Kelly: Of note, this agreement reflects just one of the four pillars of value for Novavax, and given its many layers, it's worth another review to be better appreciated. Please turn the slide 25. The COVID-19 in Santa Fe COVID flu combination related terms include the potential for up to approximately 1.3 billion in one-time milestone cash payments and equity investment. During the second quarter of 2024, the initial cash payment included 500 million upfront and approximately 70 million equity investment in Novavax stock. Near term Novavaxivid COVID-19 milestones are 350 million and COVID flu combination milestones of 350 million should provide important cash flow to the company.

Speaker Change: Of note, this agreement reflects just one of the four pillars of value for Novavax. And given its many layers, it's worth another review to be better appreciated.

Jim Kelly: Please turn to slide 20. The COVID-19 and Sanofi COVID-flu combination related terms include the potential for up to approximately $1.3 billion in one-time milestone cash payments and equity investment. During the second quarter of 2024, the initial cash payment included $500 million upfront and approximately $70 million equity investment in Novavax stock. Near-term Novavax COVID-19 milestones of $350 million and COVID flu combination milestones of $350 million should provide important cash flow to the company.

Jim Kelly: We look forward to bringing you additional updates as we continue to advance these programs. Potential timeline and pathway to registration will be dependent upon full alignment with FDA and the results of the trial. As a reminder, data from our Phase II study demonstrated that our kick vaccine induced anti-influenza neutralizing antibody levels in the top three plots. HAI antibody levels in the bottom three plots and anti-spike neutralizing antibodies bottom left that were generally comparable if not higher than levels achieved after either of the comparator vaccines.

Speaker Change: Please turn to slide 25.

Speaker Change: The COVID-19 and Sanofi-COVID flu combination related terms include the potential for up to approximately $1.3 billion in one-time milestone cash payments and equity investment.

Speaker Change: During the second quarter of 2024, the initial cash payment included $500 million upfront and approximately $70 million equity.

Speaker Change: investment in novex stock near term of veexevvited covid nineteen milestones of three hundred and fifty million and covid flu combination milestones of three hundred and fifty million should provide important cash flow to the company

James Kelly: We expect to complete database lock in the fourth quarter of 2024, which would enable earning the first 50 million milestone. Revenue recognition for this milestone will be allocated over the transition services period through 2026. All other milestones under the agreement will be recognized in the period when earned. The 175 million BLA milestone is anticipated to align to our BLA pedophadate and approval, which is presently targeted for April 2025. The two 25 million authorization transfer milestones are expected to follow as we enable Sonofi to commercialize Novavaxivid in the US and Europe for the 2025-2026 vaccination season.

Jim Kelly: We expect to complete database lock in the fourth quarter of 2024, which would enable earning the first 50 million miles. Revenue recognition for this milestone will be allocated over the transition services period through 2026. All other milestones under the agreement will be recognized during the period winner.

Jim Kelly: We believe these results give us more confidence in the program and in the feasibility of an accelerated approval pathway for either or both vaccines depending on final data reads, and out. In preparing to move into Phase 3, we have received FDA concurrence on the conduct of a single Phase 3 immunogenicity study for both kick and stand-alone influenza vaccines. The trial will be conducted in older adults in the Southern Hemisphere in Australia and New Zealand during the off season.

Speaker Change: We expect to complete database lock in the fourth quarter of 2024, which would enable earning the first $50 million milestone.

Speaker: Revenue recognition for this milestone will be allocated over the transition services period through 2026 for the Sanofi Flu COVID program. We are working to support Sanofi in these efforts and await more visibility into the potential timeline. This enables Novavax's meaningful participation in future economics from the current and future products under this agreement. New vaccines developed with Matrix N by Sanofi create a broad opportunity to advance this technology and provide Novavax with multiple revenue generation opportunities.

Speaker Change: Revenue recognition for this milestone will be allocated over the transition services period through 2026.

Speaker Change: All other milestones under the agreement will be recognized in the period when earned.

Jim Kelly: The $175 million BLA milestone is anticipated to align to our BLA PDUFA date and approval, which is presently targeted for April 2025. The two $25 million authorization transfer milestones are expected to follow as we enable Sanofi to commercialize Novavaxavid in the U.S. and Europe for the 2025-2026 vaccination season. The $75 million technology transfer milestone is expected to follow completion of our transition services obligations, which we currently estimate to occur in late 2026, for the Shonofi Flu COVID program. Additionally, there are two milestones totaling $350 million related to the development and first commercial sale.

Speaker Change: The $175 million BLA milestone is anticipated to align to our BLA PDUFA date and approval, which is presently targeted for April 2025.

Jim Kelly: The FDA recommendations we have received during the pre-IMD process are being incorporated into the trial. And we expect that with an anticipated fourth quarter start, we should have top-line data by the middle of 2025 to enable internal decision-making and potential partners. Please turn to slide 18.

Speaker Change: The two $25 million authorization transfer milestones are expected to follow as we enable Sanofi to commercialize Novavaxavid in the U.S. and Europe for the 2025-2026 vaccination season.

James Kelly: The 75 million technology transfer milestone is expected to follow completion of our transition services obligations that we currently estimate to occur in late 2026. For the Sonofi flu COVID program, there are two milestones totaling 350 million related to the development and first commercial sale. Sonofi recently noted on the earnings call that they expect to start clinical trial manufacturing activities in 2024. We are working to support Sonofi in these efforts and await more visibility into the potential timelines. In addition, Novavax is eligible to receive tiered royalties on net sales from COVID-19 mono and COVID combination products.

Speaker Change: The 75 million technology transfer milestone is expected to follow completion of our transition services obligations that we currently estimate to occur in late 2026.

Jim Kelly: Now I'd like to turn our attention to our proven tech platform, our third value driver, and to recent preclinical work aimed at expanding the utility of matrix M, our SEPHENAN-based adjuvant. Because we know that matrix M is a potent adjuvant for our nanoparticle viral vaccines, we decided to investigate whether matrix could boost immune responses in other vaccines, such as in inactivated influenza split virus vaccine already licensed. The results I'll show you indicate that matrix M increases the magnitude and breadth of antibody responses when given with a licensed egg-based influenza vaccine with the potential to produce a more potent, more highly protective vaccine.

Speaker Change: for the Sanofi Flu COVID program.

Speaker Change: There are two milestones totaling $350 million related to the development and first commercial sale.

Jim Kelly: Sanofi recently noted on their earnest call that they expect to start clinical trial manufacturing activities in 2024. We are working to support Sanofi in these efforts and await more visibility into the potential timeline. In addition, Novavax is eligible to receive tiered royalties on net sales of COVID-19 Mono and COVID combination products. This enables Novavax's meaningful participation in future earnings from current and future products under this agreement. New vaccines developed with MatrixN by Sanofi create a broad opportunity to advance this technology and provide Novavax with multiple revenue generation opportunities.

Speaker Change: So now if you recently noted on the earnings call that they expect to start clinical trial manufacturing activities in 2024.

Speaker Change: We are working to support Sanofi in these efforts and await more visibility into the potential timelines.

James Kelly: This enables Novavax meaningful participation in future economics from the current and future products under this agreement. New vaccines developed with Matrix N by Sonofi create a broad opportunity to advance this technology and provide Novavax with multiple revenue generation opportunities, where eligible to receive up to 210 million in milestones plus ongoing royalties for two decades from the time of launch. For each new vaccine developed utilizing Novavax's Matrix M adjuvant. For example, if Sonofi developed five products with our Matrix M, each with a billion in sales, this represents hundreds of millions in royalties per year plus over a billion in one-time milestones.

Jim Kelly: In the figure on the left, our ag HAI responses in mice vaccinated with a licensed, inactivated quadrivalent influenza vaccine in the left four bars. And in mice vaccinated with the same vaccine plus matrix in the right four bars. Responses to all four influenza strains are boosted in the vaccine plus matrix group. In the figure to the right, competition-bending experiments against a panel of monoclonal antibodies demonstrate that matrix-induced antibodies directed to conserved epitopes in the HA resulting in broader cross-reactive responses.

Jim Kelly: We're eligible to receive up to $210 million in milestones plus ongoing royalties for two decades from the time of launch for each new vaccine developed utilizing Novavax's MatrixM adjuvant. For example, if Sanofi developed five products with our MatrixM, each with a billion in sales, this represents hundreds of millions in royalties per year plus over a billion in one-time milestones. Novavax will support Sanofi as it prepares to advance all programs associated with this agreement, and Novavax would be eligible for cost reimbursement across a host of spend categories. Please turn to slide 26.

Speaker: We are eligible to receive up to $210 million in milestones plus ongoing royalties for two decades from the time of launch for each new vaccine developed utilizing Novavax's Matrix N adjuvant. For example, if Sanofi developed five products with our MatrixM, each with a billion in sales, this represents hundreds of millions in royalties per year plus over a billion in one-time milestones. Novavax will support Sanofi as it prepares to advance all programs associated with this agreement, and Novavax will be eligible for cost reimbursement across a host of spend categories. Please turn to slide 26.

Speaker Change: Sanofi developed five products with our matrix M. Each with $1 billion in sales. This represents hundreds of millions in royalties per year plus over $1 billion in one time milestones.

James Kelly: Novavax will support Sonofi as it prepares to advance all programs associated with this agreement, and Novavax will be eligible for cost reimbursement across the host to spend categories.

Speaker Change: Novavax will support Sanofi as it prepares to advance all programs associated with disagreement and Novavax would be eligible for cost reimbursement across a host of spend categories. Please turn to slide 26.

Jim Kelly: These data demonstrate one of the most important attributes of matrix, its ability to increase the magnitude and breadth of antibody responses with the potential to produce a more potent, more highly protective vaccine. Please turn to slide 19.

James Kelly: Please turn to slide 26. We're committed to creating a more lean and agile organization to align the company's market opportunities. To advance that goal for 2024, we are reiterating our targeted combined R&D and STNA expense guidance of 700 to 750 million. We are currently at the high end of the range when accounting for the Sonofi transaction cost, and we will continue to push to find sanity things in our cost structure as the year progresses. Novavax is prepared to initiate an additional cost reduction program to reduce combined R&D plus STNA expenses, a portion of which we expect to be reimbursed by Sanofi under the agreement during 2025 and 2026.

Jim Kelly: We're committed to creating a more lean and agile organization to align with the company's market. To advance that goal, for 2024, we are reiterating our targeted combined R&D and SG&A expense guidance of $700 to $750 million. We are currently at the high end of the range when accounting for the Sanofi transaction cost, and we will continue to push to find savings in our cost structure as the year progresses. Novavax is prepared to initiate an additional cost reduction program to reduce combined R&D plus SG&E expenses, a portion of which we expect to be reimbursed by Sanofi under the agreement during 2025 and 2026.

Speaker Change: We're committed to creating a more lean and agile organization to align the company with the Companys market opportunities.

Jim Kelly: But what about the potential for matrix M to enhance the activity of non-protein and non-viral vaccines? Bacterial capsule or polysaccharides are known to be poorly immunogenic vaccine antigens, especially at infants and young children. And we wanted to explore whether the benefits of matrix could be extended to bacterial vaccines. In this experiment, mice were vaccinated with a pneumococcal vaccine either with or without matrix added and anti-numococcal IgG antibody titers were increased over eightfold in mice that received vaccine plus matrix.

Speaker Change: To advance that goal for 2024, and we are reiterating our targeted combined R&D and SG&A expense guidance of $700 million to $750 million.

Speaker Change: We are currently at the high end of the range when accounting for the Sanofi transaction costs, and we will continue to push to find Shannon pings and our cost structure as the year progresses.

Jim Kelly: A similar adjuvant effect was observed in looking at functional antibodies that mediate subtype specific killing or OPPK, a known correlates. O.P.K, responses were increased 2.6 to 7.5-fold in mice that received vaccine with matrix for the four subtypes shown on the right. And notably, the subtype with a specially low immunogenicity, subtype 23F at the bottom right, showed the greatest increase 7.5-fold with the addition of matrix. These preliminary data have shown you suggest that matrix could play an important role in augmenting certain currently available vaccines, such as influenza and pneumococcal vaccines, by increasing the quality and duration of immunity, reducing the amount of antigen needed per dose, and lowering manufacturing costs.

Jim Kelly: Our data also suggests that the repertoire of antigens that could be combined with matrix for clinical benefit could perhaps be expanded to include bacterial polysaccharides, which we regard as an exciting area for more research. We believe that these matrix attributes could be attractive to partners with established vaccine franchises.

Speaker Change: Novavax is prepared to initiate an additional cost reduction program to reduce combined R&D plus SG&A expenses, a portion of which we expect to be reimbursed by Sanofi under the agreement during 2025 and 2026.

James Kelly: For 2025 and net of expected reimbursement, we expect our non-GAAP combined R&D and STNA to be below 450 million. By 2026, we expect to drive down combined R&D and GNA expenses to below 350 million. In addition, as we assume a secondary role in commercial markets, disenables the reduction of commercial and supply chain costs. We are actively exploring the sale of our Czech Republic manufacturing facility, which could both provide cash proceeds and reduction to our ongoing operating costs.

Speaker: For 2025, net of expected reimbursement, we expect our non-GAAP combined R&D and SG&A to be below $450 million. Now turning to financial guidance that we have updated to incorporate the GAAP Revenue Recognition for the $500 million Santa Fe Upfront Payment and Outlook for APA and Commercial Sales. Of note, we received the full upfront payment of $500 million and approximately $70 million equity investment from Sanofi during the second quarter of 2024.

Jim Kelly: For 2025, net of expected reimbursement, we expect our non-GAAP combined R&D and SG&A to be below $450 million. By 2026, we expect to drive down combined R&D and G&A expenses to below $350 million. In addition, as we assume a secondary role in commercial markets, this enables the reduction of commercial and supply chain costs.

Speaker Change: For 2025, and net of expected reimbursement, we expect our non-GAAP combined R&D and SG&A to be below $450 million by.

Speaker Change: By 2026, we expect to drive down combined R&D and G&A expenses to below $350 million.

Speaker Change: In addition, as we assume a secondary role in commercial markets. This enables through reduction of commercial and supply chain costs. We are actively exploring the sale of our Czech Republic manufacturing facility, which could provide cash proceeds and reduction to our ongoing operating costs.

Jim Kelly: We are actively exploring the sale of our Czech Republic manufacturing facility, which could both provide cash proceeds and a reduction to our ongoing operating costs; please turn to slide 27. Now turning to financial guidance that we have updated to incorporate the GAP Revenue Recognition for the 500 million Santa Fe upfront payment and Outlook for APA and commercial sales. Of note, we received the full upfront payment of $500 million and an approximately $70 million equity investment from Sanofi during the second quarter of 2024.

James Kelly: Please turn to slide 27. Now turning to financial guidance that we have updated to incorporate the GAP revenue recognition for the 500 million Santa Fe upfront payment and outlook for APA and commercial sales. Of note, we received the full upfront payment of 500 million and approximately 70 million equity investment from Sonofi during the second quarter of 2025. 24. For the full-year 2024 and on a GAAP basis, we expect to achieve total revenue of $1,700,800,000,000. This includes $400,000,000 of revenue recognition from the $500,000,000 Santa Fe Agreement up front payment, and $25,000,000 in royalty and other revenue from partner-related activities, which is recorded as licensing, royalty, and other revenue.

Speaker Change: Please turn to slide 27.

Speaker Change: Now turning to financial guidance that we have updated to incorporate the GAAP revenue recognition for the 500 million incentive fee upfront payment and outlook for EPA and commercial sales of note. We received the full upfront payment of $500 million of approximately $70 million equity investment from Sanofi.

Speaker Change: During the second quarter of 2024.

Jim Kelly: For the full year 2024, and on a gap basis, we expect to achieve total revenue of between 700 and 800 million. This includes 400 million of revenue recognition from the 500 million Santa Fe Agreement up front, and $25 million in royalty and other revenue from partner-related activities, which is recorded as licensing, royalty, and other revenue.

Speaker: For the full year 2024, and on a gap basis, we expect to achieve total revenue of between 700 and 800 million. This includes 400 million of revenue recognition from the 500 million Sanofi agreement up front, and $25 million in royalty and other revenue from partner-related activities, which is recorded as licensing, royalty, and other revenue. We are updating our full year 2024 product sales guidance and expect to achieve between $275 million and $375 million.

Speaker Change: For the full year 2024 on a GAAP basis, we expect to achieve total revenue of between 700 800 million. This includes $400 million of revenue recognition from the 500 million incentive fee agreement upfront payment.

Bob Walker: Please turn to slide 20. Finally, I want to discuss our new early stage pipeline, which is our fourth value driver. As you heard, we are in the middle of a strategic assessment of our technology platform to determine how to best expand and refresh a new full product pipeline for NOVAVAX, and we are excited about the new initiatives that may spring from that review. As we work to complete this analysis, in parallel, we have continued to advance our RSV and avian influenza H5N1 preclinical vaccine candidates, and continue to prepare both to move into the clinic.

Speaker Change: And $25 million in royalty and other revenue from partner related activities, which is recorded as a licensing royalty and other revenue.

James Kelly: We are updating our full-year 2024 product sales guidance and expect to achieve between $275,000,000 and $375,000,000. This includes $100,000,000 for the APAs already delivered through mid-year and commercial product market sales of $175,000 to $275,000,000 in the second half of 2024. Importantly, our expectations for the U.S. market performance remain unchanged, and we expect the majority of remaining product sales to occur in the fourth quarter of 2024. The $150,000,000 reduction to the midpoint of our full-year 2024 product sales guidance reflects $100,000,000 from the New Zealand APA. We are in ongoing discussions with New Zealand in response to their desire to cancel this agreement, and $50,000,000 from EU commercial sales as we target a smaller set of prioritized countries for the 2024-2025 vaccination season.

Jim Kelly: We are updating our full year 2024 product sales guidance and expect to achieve between $275 million and $375 million. This includes $100 million for APAs already delivered through mid-year, and commercial product market sales of $175 to $275 million in the second half of 2024. Importantly, our expectations for U.S. market performance remain unchanged, and we expect the majority of remaining product sales to occur in the fourth quarter of 2021. The $150 million reduction to the midpoint of our full year 2024 product sales guidance reflects $100 million from the New Zealand AP; we are in ongoing discussions with New Zealand in response to their desire to cancel this agreement, and $50 million from EU commercial sales as we target a smaller set of prioritized countries for the 2024-2025 vaccination season.

Speaker Change: We are updating our full year 2020 for product sales guidance and expect to achieve between $275 million and $375 million.

Speaker Change: This includes a $100 million for the Epa's already delivered through mid year, and commercial product markets sales of $175 million to $275 million in the second half of 2024.

Speaker Change: Importantly, our expectations for the U S market performance remain unchanged and we expect the majority of remaining product sales to occur in the fourth quarter of 2024.

Bob Walker: At our last earnings call, we shared the animal model results on this slide. On the left are data showing that our RSV nanoparticle vaccine with matrix was more immunogenic for both A and B subgroups than a comparator RSV vaccine with ASO1E measurement. We believe our RSV candidate, the still early in development, has the potential to be first in class for both safety because of matrix M and effectiveness. The data on the right are for our H5N1 vaccine, showing that a single boost by injection was highly immunogenic in non-human primates, previously primed with a seasonal influenza vaccine.

Speaker Change: The $150 million reduction to the midpoint of our full year 2020 for product sales guidance reflects a $100 million from the New Zealand API.

Speaker: We are in ongoing discussions with New Zealand in response to their desire to cancel this agreement and 50 million from EU commercial sales as we target a smaller set of prioritized countries for the 2024-2025 vaccination season. For the remaining APA agreements, our intent is to amicably negotiate or deliver doses or, when appropriate, exit agreements with the goal of these activities to be cashflow neutral or favorable on a go forward basis. To be conservative, we're removing APA sales from our forward-looking revenue expectations until further clarity is available on each.

Speaker Change: We are in ongoing discussions with New Zealand in response to their desire to cancel this agreement and $50 million from EU commercial sales as we target a smaller set of prioritize countries for the 2020 for 2025 vaccination season.

James Kelly: For the remaining APA agreements, our intent is to statically negotiate or deliver doses or, when appropriate, exit agreements, with the goal of these activities to be cash flow neutral or favorable on a go-forward basis. To be conservative, we're removing APA sales from our forward-looking revenue expectations until further clarity is available on each. We'll instead emphasize realization of cross-savings that come from exiting commercial markets. Our current operating plan, including the multi-year combined R&D and S-GNA expense targets, highlights a path to maintaining our goal of at least one to two years of cash on hand, prior to receipt of cash flows from the Sanofi agreement in the form of milestones and royalties.

Jim Kelly: For the remaining APA agreements, our intent is to amicably negotiate or deliver doses or, when appropriate, exit agreements with the goal of these activities being cash flow neutral or favorable on a go-forward basis. To be conservative, we're removing APA sales from our forward-looking revenue expectations until further clarity is available on each. We'll instead emphasize the realization of cost savings that come from exiting commercial markets. Our current operating plan, including the multi-year combined R&D and SG&A expense targets, highlights a path to maintaining our goal of at least one to two years of cash on hand prior to receipt of cash flows from the Sanofi Agreement in the form of milestones and royalties.

Speaker Change: For the remaining EPA agreements are intend to stay amicably negotiate or deliver doses are when appropriate exited agreements with the goal of these activities to be cash flow neutral or favorable.

Bob Walker: And even a single intranasal boost in red showed responses above the commonly accepted threshold for protection of 1-40. An effective 1-dose regimen for a pandemic influenza vaccine would provide a paradigm shift in public health and pandemic preparedness by providing more rapid protection and the potential to save many more lives than the current stockpiled 2-dose regimens. We plan to start IND enabling studies for both vaccines as soon as next month to support the start of phase 1 clinical trials. And you will hear more from us later this year about additional areas of development for our technology.

Speaker Change: Go forward basis to be conservative, we're removing EPA sales from our forward looking revenue expectations until further clarity is available on each will instead emphasized realization of cost savings that come from exit and commercial markets. Our current operating plan, including the multiyear combined R&D.

Speaker: We'll instead emphasize the realization of cost savings that come from exiting commercial markets. Our current operating plan, including the multi-year combined R&D and SG&A expense targets, highlights a path to maintaining our goal of at least one to two years of cash on hand prior to receipt of cash flows from the Sanofi Agreement in the form of milestones and royalties. We look forward to sharing additional updates as we seek to improve Novavax's financial performance, cost structure, and strength to deliver shareholder value.

Speaker Change: And SG&A expense targets highlights a path to maintaining our goal of at least one to two years of cash on hand prior to receipt of cash flows from the Sanofi agreement in the form of milestones and royalties.

James Kelly: We look forward to sharing additional updates as we seek to improve NovaVax's financial performance, cost structure, and strength to deliver shareholder value.

Jim Kelly: We look forward to sharing additional updates as we seek to improve Novavax's financial performance, cost structure, and strength to deliver shareholder value. With that, I'd like to turn the call back over to John for some closing remarks. Thank you, Jim.

Speaker Change: We look forward to sharing additional updates as we seek to improve <unk> financial performance cost structure and strength to deliver shareholder value.

Jim Kelly: Now, to discuss our financials for the quarter, I want to hand the call to Jim. Thank you, Bob. Please turn to Slide 22.

John Jacobs: With that, I'd like to turn the call back over to John for some closing remarks. Thank you, Jim. Before we take your questions, I'd like to thank you all for joining us today and for your ongoing support as we work to build a new vision and future growth platform for NovaVax.

Speaker Change: With that I'd like to turn the call back over to John for some closing remarks.

John: Thank you Jim.

Jim Kelly: We're focused on improving the financial health and performance of Novavax to enable long-term value creation. Today, we outline more detailed plans to deliver on this vision. To begin, I'll share a few of the key themes for the second quarter of 2024 and look towards full-year 2024 and beyond. For the second quarter of 2024, Novavax recorded total revenue of 415 million consisting primarily of 391 million from the Gap revenue recognition for the 500 million upfront payment from Sonofi received fully in the second quarter.

John: Before we take your questions, I'd like to thank you all for joining us today and for your ongoing support as we work to build a new vision and future growth platform for Novavax. As you have heard, we're working hard to position the company for future growth with a focus on our new value drivers, including DriverOne, the Sanofi partnership, which provides for a multi-billion dollar potential across upfronts, equity investment, milestones, and royalties over time.

Speaker: Before we take your questions, I'd like to thank you all for joining us today and for your ongoing support as we work to build a new vision and future growth platform for Novavax. Value Driver 2, our late-stage pipeline. Value Driver 3, leveraging our proven tech platform to drive additional partnerships and deals. And finally, Value Driver 4, our new early-stage pipeline. I'd now like to turn the call over to our operator for questions and answers. Thank you.

John: Before we take your questions I'd like to thank you all for joining us today and for your ongoing support as we work to build a new vision and future growth platform for Novavax.

John Jacobs: As you have heard, we're working hard to position the company for future growth with a focus on our new value drivers, including driver 1, the Sonofi partnership, which provides for a multi-billion dollar potential across upfront equity investment milestones and royalties over time. Value driver 2, our late-stage pipeline; value driver 3, leveraging our proven tech platform to drive additional partnerships and deals; and finally, value driver 4, our new early stage pipeline.

John: As you've heard we're working hard to position the company for future growth with a focus on our new value drivers, including.

Speaker Change: Including driver one to satisfy partnership which provides for a multibillion dollar potential across upfronts equity investment milestones and royalties over time.

John: Value Driver 2, our late-stage pipeline. Value Driver 3, leveraging our proven tech platform to drive additional partnerships and deals. And finally, Value Driver 4, our new early-stage pipeline. I'd now like to turn the call over to our operator for questions and answers. Thank you.

Speaker Change: Value driver to our late stage pipeline value driver three leveraging our proven tech platform to drive additional partnerships and deals and finally value driver for our new early stage pipeline.

Jim Kelly: The remaining $119 million from the upfront milestone payment will be allocated over the transition services period through 2026. We estimate full-year revenue recognition for the upfront payment to be approximately $400 million for 2024 and the remaining $100 million evenly split across 2025 and 2026. We have incorporated this Gap revenue recognition into our full-year 2024 guidance. As we continue to transform Novavax into a more lean and agile organization, we reduced our second quarter 2024 combined R&D and SGNA by 34% compared to prior year.

Operator: I'd now like to turn the call over to our operator for questions and answers. Thanks. Thank you.

Speaker Change: I'd now like to turn the call over to our operator for questions and answers. Thank you.

Speaker Change: Yes.

Operator: Thank you. We will now begin the question and answer session. To ask a question, please press star one on your touchtone phone. If you're using a speakerphone, please pick up the handset before pressing the. To withdraw your question, please press star and two. At this time, we will pause momentarily to assemble our roster. Once again, click on star and one if you wish to ask a question. Thank you for waiting. We now have our first question, and this comes from the line of Roger Song from Jeffries. Please go ahead.

Speaker Change: Thank you we will now begin the question and answer session to ask a question. Please press star one on your Touchtone phone.

Operator: We will now begin the question and answer session. To ask a question, please press star one on your touch-tone phone. If you are using a speaker phone, please pick up the handset before pressing the keys. To withdraw your question, please press star and two.

Speaker Change: You are using a speakerphone, please pick up the handset before pressing the keys.

Operator: To withdraw your question, please press star and two. At this time, we will pause momentarily to assemble our roster.

Speaker Change: To withdraw your question. Please press star two.

Operator: At this time, you will pause momentarily to assemble our roster. Once again, star and one, if you wish to ask a question. Thank you for waiting.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Speaker Change: Once again star one if you wish to ask a question.

Jim Kelly: When excluding Santa Fe transaction costs for the period, we saw a decrease of 43%. As we look forward to the full-year 2024, we are reiterating our targeted guidance for combined R&D and SGNA expenses of between 700 and 750 million as we continue to resize our organization. Novavax is prepared to initiate an additional cost reduction program to further reduce combined R&D and SGNA expenses, a portion of which we expect to be reimbursed by Santa Fe under the agreement.

Roger Song: Great. Congratulations on all the progress and thank you for taking our questions. Thank you, Roger. Thank you, John. So the first one is regarding the updated 2024 guidance, understanding nothing really changed for the U.S., expectations mostly driven by the EU and New Zealand. Just curious about the can you give us some of the updates regarding U.S. contracting, you know, given this timing of the season, how confident you are you will be able to deliver this guidance in the U.S., particularly? Thank you. A good question, Roger. John, do you want to take that one? Yes, sure.

Speaker Change: Thank you for waiting we now have our first question and this comes from the line of Roger song from Jefferies. Please go ahead.

Roger Song: We now have our first question, and this comes from the line of Roger Song from Jeff Reese. Please go ahead. Great. Congrats for all the progress, and thank you for taking our questions. Thank you, Roger. Thank you, John.

Roger Song: Great Congrats.

Roger Song: Congrats for that program. Thank you for taking our questions.

Speaker Change: Alright.

John Trizzino: Yeah, thank you, John. So the first one is regarding the updated 2024 guidance, understanding that nothing really changed for the U.S. Good question, Roger. John, do you want to take that one? Yes, sure.

Roger Song: Yes. Thank you John So the first one is regarding the updated 2020 guidance understanding nothing really changed for the U S.

Roger Song: So the first one is regarding the updated 2024 guidance and the standing, nothing really changed for the US comfortable expectation mostly driven by the EU and New Zealand. Just the curious about the, can you give us some of the updates regarding the US contracting, given the standing of the season, how confident you are, you will be able to deliver this guidance in the US particularly. Thank you.

Speaker Change: Expectation, mostly driven by that year and New Zealand.

Jim Kelly: For 2025 and net of reimbursement, we're targeting non-Gap combined R&D and SGNA below 450 million. We ended the second quarter of 2024 with cash and accounts receivable of approximately 1.1 billion. We believe the Santa Fe agreement provides for a multi-billion-dollar cash flow over time. During the second quarter of 2024, we received approximately 570 million in cash payments that further improved our financial position. Importantly, we are prioritizing the completion of our APAs, enabling a reduction to Novavax commercial operating activities and complexity as a means to further reduce our costs.

Speaker Change: Im just curious Bob B can you give us some of the updates regarding debt U S contracting.

Speaker Change: Given the timing of them.

Speaker Change: Confident you are you will be able to deliver this guidance.

Speaker Change: Thank you.

John Jacobs: Good question, Roger.

John: Good question, Roger. John, do you want to take that one?

Speaker Change: Good question, Roger John do you want to take that one yes sure.

John Jacobs: John, do you want to take that one? Yes, George. As well as many of the buying groups for the smaller grocers and independence. We made great progress over last year with things like online schedulers and access and stocking orders that will be in each of those. So much better progress from last year. I think that will provide an opportunity for those interested in getting the vaccine to come into the pharmacy. Some of our communication programs at the consumer level and then also at the pharmacist level will open that door to availability to the product. So I think all that's gone in a very positive direction.

John: Yes, sure. Okay. Thank you. Bye. Thank you. Bye. Operator, can you hear us okay? Is that better, Roger? Yes, sir. Your line's up. OK.

Jim Kelly: Please turn to slide 23 for a more detailed review of our second quarter 2024 results. For the second quarter of 2024, we recorded total revenue of 415 million compared to 424 million in the same period in 2023. Our product sales of 20 million in the second quarter of 2024 were primarily related to the expiration of certain EPA purchase. Rites. Our cost of sales for the second quarter of 2024 was 46 million as compared to 56 million to the same period in 2023.

Jim Kelly: These periods include 24 million and 31 million respectively related to excess obsolete and expired inventory, losses on firm purchase commitments and unutilized manufacturing capacity. As previously noted for the second quarter of 2024, Novavax is combined R&D&S DNA of 208 million reflects a 34 percent reduction from the same period in 2023. Excluding the 31 million in Santa Fe transaction costs, our second quarter of 2024 combined R&D&S DNA was approximately flat to the first quarter of 2024.

Operator: Thank you. Operator, can you hear us okay?

Speaker Change: Operator can you hear us okay.

Roger: Is that better Roger Sir your.

Operator: Your line is open.

John: Okay, so we had a bit of a technical difficulty there for a moment, so maybe we should maybe back up to address Roger's question. So as far as retail pharmacy contracting execution goes, it has gone extraordinarily well. As you can see from the slide that we presented, all of the top retail pharmacies are under contract, as well as many of the buying groups for the smaller grocers and independents. We've made great progress over the last year with things like online schedulers and access, and stocking orders that will be in each of those.

Operator: Okay.

Operator: Okay.

Speaker Change: A bit of a technical difficulty there for a moment, so maybe let's maybe back up into address Rogers Rogers question.

Speaker Change: So as far as a retail pharmacy contracting execution, so far has gone extraordinarily well.

Speaker Change: As you can see from the slide that we presented all of the top retail pharmacies are under contract as.

Speaker Change: As well as many of the buying groups for the smaller grocers and independents, we've made great progress over last year with things like online schedulers.

Jim Kelly: Please turn to slide 24. The Santa Fe agreement provides for a multi-billion dollar potential across upfront equity investments, milestones, and royalties. The anticipated present value of the royalties on sonophies, Novavaxivid, FluCOVID, and combination products, and new vaccines with matrix ends are expected to be the largest individual component of value from this transaction. Of note, this agreement reflects just one of the four pillars of value for Novavax and given its many layers, it's worth another review to be better appreciated.

Speaker Change: And and access and stocking orders that will be in each of those so much better progress from last year I think that will provide an opportunity for those interested in getting the vaccine to come into the pharmacy some of our communication programs at the consumer level and then also at the pharmacist level will open that door to avail.

John: So, much better progress from last year. I think that will provide an opportunity for those interested in getting the vaccine to come into the pharmacy. Some of our communication programs at the consumer level and then also at the pharmacist level will open that door to availability of the product.

John: So I think all that's gone in a very positive direction.

Speaker Change: Ability to the product so I think all of that's gone in a very positive direction.

Operator: action.

Speaker Change: Excellent. Thank you. Thank you.

Operator: Thank you.

Speaker Change: Okay.

Mayank Mamtani: Thank you.

Speaker Change: Thank you guys.

Mayank Mamtani: We will now take the next question. And this comes from the line of my young mom time from the early securities.

Speaker Change: Yes.

Speaker Change: The next question.

my Yang: And this comes from the line of my Yang.

Jim Kelly: Please turn to slide 25. The COVID-19 in Santa Fe COVID flu combination related terms include the potential for up to approximately 1.3 billion in one time milestone cash payments and equity investment. During the second quarter of 2024, the initial cash payment included 500 million up front and approximately 70 million equity investment in Novavax stock. Near term Novavaxivid COVID-19 milestones of 350 million and COVID flu combination milestones of 350 million should provide important cash flow to the company.

Speaker Change: From.

Speaker Change: From B Riley <unk> Securities. Please go ahead.

Mayank Mamtani: Please go ahead. There are questions and congrats on many components of your portfolio showing progress today. About your kick phase three study, maybe if you could learn some protocol differences that you have integrated in your program, having the advantage of going third here. So if you could maybe highlight that and then why do both the flu vaccine and the combination vaccine in the same study was to maybe try to do separately is the other question because you know there are control on differences and you obviously have pretty you know strong compelling data on strain B from the previous amount of flu candidate.

Mayank Mamtani: Thank you for taking our questions, and congratulations on many components of your portfolio showing progress today. About your KICK phase 3 study, maybe if you could learn some protocol differences that you have integrated into your program, having the advantage of going third here, so if you could maybe highlight that, and then, you know, why do both the flu vaccine and the combination vaccine in the same study versus maybe trying to do them separately is the other question, because, you know, there are control arm differences, and you obviously have pretty strong, compelling data on strain B from the So, if you could maybe help clarify your strategy here, it would be helpful, and then I'll follow up.

Yang: Our questions and congrats on.

Speaker Change: Many components of their portfolio showing progress to date.

Speaker Change: Bulgaria take phase III study maybe.

Speaker Change: If you could launch them.

Speaker Change: The glaring differences.

Speaker Change: You have integrated in your program.

Speaker Change: The <unk> going.

Speaker Change: So if you could maybe highlight that and then.

Speaker Change: Why do.

Speaker Change: The net debt.

Speaker Change: Flu vaccine in the combination with vaccine the same steady wasting maybe trying to do separately.

Jim Kelly: We expect to complete database lock in the fourth quarter of 2024, which would enable earning the first 50 million milestone. Revenue recognition for this milestone will be allocated over the transition services period through 2026. All other milestones under the agreement will be recognized in the period when earned. The 175 million BLA milestone is anticipated to align to our BLA pedophadate and approval which is presently targeted for April 2025. The two 25 million authorization transfer milestones are expected to follow as we enable Sonofi to commercialize Novavaxivid in the US and Europe for the 2025-2026 vaccination season.

Speaker Change: The other question there a control arm differences and you obviously you have any.

Speaker Change: Strong compelling data on sandy from from the.

Mike: Previous nonaccrual candidates. So if you could maybe help quantify inside of that you have would be helpful. And then I have a follow so Mike. Thank you for your questions. Bob two questions from my end. The first is have you made any changes to the protocol.

Mayank Mamtani: So if you could maybe help clarify your strategy here, it would be helpful.

John Jacobs: So, Mike, thank you for your questions.

Bob Walker: So, Mayank, thank you for your questions. Bob, two questions from Mayank. The first is, have we made any changes to the protocol based on what we've learned, the fact that we're going third here, and then, secondly, his question about one program versus two, if you want to handle that one.

Robert Walker: Bob, two questions from Mike. The first is that we made any changes to the protocol based on what we've learned, the fact that we're going third here. And then secondly, this question about one program versus two, if you want to handle that one. Thank you. Sure, thanks for that. So we do have, as I mentioned earlier, we do have alignment with FDA on conducting a single phase free protocol to support both products. And we are in we remain in dialogue with them on some of the details. So I don't think we're prepared to actually discuss the specifics of the protocol design at this time, but let's say to answer your second question, we will leverage certain efficiencies by incorporating both products into the same study by using shared comparator control groups.

Speaker Change: Based on what we've learned the fact that we're going third here and then secondly, I asked a question about one program versus too if you want to handle that one.

Speaker: Sure, thanks for that. So, as I mentioned earlier, we do have alignment with FDA on conducting a single phase three protocol to support both products. And we also know that the previous experience that you allude to with the influenza vaccine can also be leveraged to support the safety database for the product, for the new product.

Bob Walker: Sure, thanks for that. So, as I mentioned earlier, we do have alignment with FDA on conducting a single phase three protocol to support both products. And we remain in dialogue with them on some of the details. But I don't think we're prepared to actually discuss the specifics of the protocol design at this time. But let me say to answer your second question, we will leverage certain efficiencies by incorporating both products into the same study by using shared comparator control groups. And we also do know that the previous experience that you allude to with the influenza vaccine can also be leveraged to support the safety database for the product, for the new product.

Speaker Change: Sure Thanks for that.

Speaker: Okay, I got it. And then just on the long-term OPEX guidance that you put out there, you know, given that there are some interesting parts of your earlier stage pipeline that you'd look to also advance, and you talked about some of that, could you just give us a little bit of a mix of, you know, R&D at CNA and also when should we start to see some of these candidates get into the clinic from either you or even your partner Sanofi And thanks again for taking our questions.

Mayank Mamtani: Okay, I got it. And then just on the long-term OPEX guidance that you put out there, you know, given that there are some interesting parts of your earlier stage pipeline that you'd look to also advance, and you talked about some of that, could you just give us a little bit of a mix of R&D, SG&A, and also when should we start to see some of these candidates get into the clinic from either you or even your partner, Sanofi And thanks again for taking our questions.

Speaker Change: So.

Bob: We do have as I mentioned earlier, we do have alignment with FDA on conducting a single phase III protocol to support both products.

Jim Kelly: The 75 million technology transfer milestone is expected to follow completion of our transition services obligations that we currently estimate to occur in late 2026. For the Sonofi Flu COVID program, there are two milestones totaling 350 million related to the development and first commercial sale. Sonofi recently noted on the earnings call that they expect to start clinical trial manufacturing activities in 2024. We are working to support Sonofi in these efforts and await more visibility into the potential timelines.

Speaker Change: And we are in we remain in dialogue with them on some of the details. So I don't think were prepared to actually discuss the specifics of the protocol design at this time.

Speaker Change: But let's say it to answer your second question, we will leverage certain efficiencies.

Speaker Change: By incorporating both products into the same study by using shared comparator control groups.

Robert Walker: And we also do know that the previous experience that you allude to with the influenza vaccine can also be leveraged to support the safety database for the product for the new product. Okay, got it.

Speaker Change: And we also do note that the previous experience that you allude to.

Speaker Change: With the influenza vaccine can also be leveraged to support the safety database for the product for the new product.

Speaker Change: Okay.

Jim Kelly: In addition, Novavax is eligible to receive tiered royalties on net sales from COVID-19 mono and COVID combination products. This enables Novavax meaningful participation in future economics from the current and future products under this agreement. New vaccines developed with Matrix N by Sonofi create a broad opportunity to advance this technology and provide Novavax with multiple revenue generation opportunities, where eligible to receive up to 210 million in milestones plus ongoing royalties for two decades from the time of launch.

Speaker Change: Okay.

James Kelly: And then just on the long term op-ex guidance that you put out there, you know, given that the interesting parts of your earlier stage pipeline that you'd look to also advance and you talk to some of that, could you give us a little bit of a mix of, you know, R&D SCNA and also when should we start to see, you know, some of these candidates get into the clinic from either you or even your partner Santa C? And thanks again for taking your questions.

Speaker Change: Got it and then just.

Speaker Change: On the long term.

Speaker Change: Opex guidance that you put out there.

Speaker Change: Given that.

Speaker: Awesome.

Speaker Change: Interesting.

Speaker Change: Stage by flying that you've looked at outside one thing you talked to some of that could.

Speaker Change: Could you just give us a little bit of a mix.

Speaker: R&D SG&A and also when should we start to see some.

Speaker Change: Some of these candidates getting to their clinic from either you or are you going to go partner incentive fee.

Speaker Change: And thanks again for taking our questions.

James Kelly: Good, good question. Mike Jim Kelly will address the financial question. Exactly, Mike, you're you're right on spot in terms of capturing the dynamic of our cost structure change while we strategically enable really the unlocking of significant value from our early stage pipeline. We expect vast majority the majority of our cost structure as we approach that 2026 below 350 million to be invested back in this value creating a early stage pipeline as we continue to drive to a lean and agile organization. and then Mike, I believe you're the second part of your question was when do we expect to see some new assets emerge in our pipeline and what timing might that be regarding hitting the clinic.

Jim Kelly: Good question, Mike. Jim Kelly will address the financial question.

Jim Kelly: Good question, Mike. Jim Kelly will address the financial question.

Speaker Change: Good question mind, Jim Kelly will address the financial question.

Jim Kelly: For each new vaccine developed utilizing Novavax's Matrix M adjuvant. For example, if Sonofi developed five products with our Matrix M, each with a billion in sales, this represents hundreds of millions in royalties per year plus over a billion in one-time milestones. Novavax will support Sonofi as it prepares to advance all programs associated with this agreement and Novavax will be eligible for cost reimbursement across the host to spend categories. Please turn to slide 26.

Jim Kelly: Exactly. Mayank, you're right on target in terms of capturing the dynamic of our cost structure change while we strategically enable the unlocking of significant value from our early stage pipeline. We expect the vast majority and the majority of our cost structure as we approach that 2026 below $350 million to be invested back in this value-creating early stage pipeline as we continue to drive to a lean and agile organization.

Jim Kelly: Exactly my and cure.

Speaker Change: You're right on spot in terms of capturing the dynamic of our cost structure change why we strategically enable really the unlocking of significant value from our early stage pipeline. We expect the vast majority of the majority of our cost structure as we approach that 2026 below 305.

Speaker Change: <unk> million dollars to be invested back in this value, creating early stage pipeline as we continue to drive to a lean and agile organization.

Jim Kelly: We're committed to creating a more lean and agile organization to align the companies market opportunities. To advance that goal for 2024, we are reiterating our targeted combined R&D and STNA expense guidance of 700 to 750 million. We are currently at the high end of the range when accounting for the Sonofi transaction cost and we will continue to push to find sanity things in our cost structure as the year progresses. Novavax is prepared to initiate an additional cost reduction program to reduce combined R&D plus STNA expenses, a portion of which we expect to be reimbursed by Sonofi under the agreement during 2025 and 2026.

Speaker: And then Mike, I believe the second part of your question was, when do we expect to see some new assets emerge in our pipeline and what timing might that be regarding hitting the clinic? Some of the examples that Bob Walker shared, where we've added MatrixM to other products that are established in the market right now that are significant franchises for other companies.

Speaker: And then Mike, I believe the second part of your question was, when do we expect to see some new assets emerge in our pipeline and what timing might that be regarding hitting the clinic? So I think we're excited to unveil what that new pipeline is by the end of the year. As you know, we're also deep into a search for our new president of research and development.

Speaker Change: And then Mike I believe Youre at the second part of your question was when do we expect to see some new assets emerge in our pipeline and what timing might that be regarding hitting the clinic. So I think we're at we're excited to unveil what that new pipeline is by the end of the year. As you know we're also deep into a search for our new President of research and development, we've had a lot of <unk>.

John Jacobs: So I think we're excited to unveil what that new pipeline is by the end of the year.

John Jacobs: As you know, we're also deep into a search for our new President of Research and Development. We've had a lot of interest in Novavax, especially post the Sanofi deal with further validation of our Matrix M and proven technology platform. The fact that around the world people are recognizing what this technology is capable of, and I hope everyone was able to hear some of the examples that Bob Walker shared, where we've added matrix them to other products that are established in market right now that are significant franchises for other companies. We've shown an ability to potentially improve those products and even reduce their cost of production.

Speaker: We've had a lot of interest in Novavax, especially post the Sanofi deal with further validation of our MatrixM and proven technology platform. The fact that around the world, people are recognizing what this technology is capable of, and I hope everyone was able to hear some of the examples that Bob Walker shared, where we've added MatrixM to other products that are established in the market right now that are significant franchises for other companies.

Speaker: Interest in Novavax, especially post the Sanofi deal with further validation of our matrix M and proven technology platform.

Speaker Change: Fact that around the world people are recognizing what this technology is capable of and I hope everyone was able to hear it.

Speaker Change: Some of the examples that Bob Walker herd, where we've added matrix M to other products that are established and end market right. Now that are significant franchises for other companies that we've shown an ability to potentially improve those products and even reduce their cost of production. These are significant and we believe our technology, we've only just begun to tap into.

Speaker: We've shown an ability to potentially improve those products and even reduce their cost of production. These are significant, and we believe our technology we've only just begun to tap into that potential. So we're very excited to unveil what our exploration of that technology right now might be telling us about what else we can do beyond a seasonal vaccine, beyond even respiratory potentially. We know that's where our wheelhouse is right now, but this technology has capabilities well beyond what we've explored with it so far.

Speaker: We've shown an ability to potentially improve those products and even reduce their cost of production. These are significant, and we believe our technology we've only just begun to tap into that potential. So we're very excited to unveil what our exploration of that technology right now might be telling us about what else we can do beyond a seasonal vaccine, beyond even respiratory potentially. We know that's where our wheelhouse is right now, but this technology has capabilities well beyond what we've explored with it so far.

Jim Kelly: For 2025 and net of expected reimbursement, we expect our non-gap combined R&D and STNA to be below 450 million. By 2026, we expect to drive down combined R&D and GNA expenses to below 350 million. In addition, as we assume a secondary role in commercial markets disenables the reduction of commercial and supply chain costs. We are actively exploring the sale of our Czech Republic manufacturing facility, which could both provide cash proceeds and reduction to our ongoing operating costs. Please turn to slide 27.

John Jacobs: These are significant, and we believe our technology we've only just begun to tap into that potential. So we're very excited to unveil what our exploration of that technology right now might be telling us on what else we can do beyond a seasonal vaccine, beyond even respiratory potentially. We know that's where our wheelhouses right now, but this technology has capabilities well beyond what we've explored with it so far. So as we get to that unveiling, we will be sharing also mind some timelines on that and that we look forward to doing that in the future when we have more context. Importantly, we're deep into the analysis and exploration of what else we could do with the tech and post the no fee and post the last 18 months of lifting our going concern.

Speaker Change: That potential so we're very excited to unveil what.

Speaker Change: Our exploration of that technology, right now might be telling us on what else. We can do beyond a seasonal vaccine beyond even respiratory potentially we know that's where our wheelhouse is right now, but this technology has capabilities well beyond what we've explored with it so far so as we get to that unveiling we will be <unk>.

Speaker: So as we get to that unveiling, we will also be sharing with Mayank some timelines on that, and we look forward to doing that in the future when we have more context. Importantly, we're deep into the analysis and exploration of what else we could do with the tech and post-Sanofi and post the last 18 months, putting the Gavi situation behind us, reducing our current liabilities significantly, improving our balance sheet, and improving our cash position.

Speaker: So as we get to that unveiling, we will also be sharing with Mayank some timelines on that, and we look forward to doing that in the future when we have more context. Importantly, we're deep into the analysis and exploration of what else we could do with the tech and post-Sanofi and after the last 18 months of Lifting Our Going Concerns, putting the Gavi situation behind us, reducing our current liabilities significantly, improving our balance sheet, and improving our cash position.

Speaker Change: <unk> also mining some timelines on that and we look forward to doing that in the future. When we have more context importantly, we're deep into the analysis and exploration of what else, we could do with attack and post Sanofi and post the last 18 months of lifting our going concern.

Jim Kelly: Now turning to financial guidance that we have updated to incorporate the GAP revenue recognition for the 500 million Santa Fe upfront payment and outlook for APA and commercial sales. Of note, we received the full upfront payment of 500 million and approximately 70 million equity investment from Sonofi during the second quarter of 2025. 24. For the full year 2024 and on a gap basis, we expect to achieve total revenue of $1,700,800,000,000. This includes $400,000,000,000, a revenue recognition from the $500,000,000, Santa Fe Agreement up from payment, and $25,000,000 in royalty and other revenue from partner-related activities, which is recorded as licensing, royalty, and other revenue.

John Jacobs: Putting the goby situation behind us, reducing our current liabilities significantly, improving our balance sheet, improving our cash position. We've now put Novavax in the position to focus more on what we do best, which is research and development from this amazing technology platform. So we're excited to share that with you in the future we're working diligently on transitioning the company away from focusing all of our energy on one product every season to now being able to focus on multiple shots on goal for potential potential future growth, which we laid out as our four drivers. We're in that transition now, and it's a period that we ask for a little bit of patience as we wrap up our last season and we change the direction of the company toward this.

Speaker: Putting gaba Gaba situation behind us, reducing our current liabilities significantly improving our balance sheet, improving our cash position. We've now put in novavax in the position to focus more on what we do best which is research and development from this amazing technology platform. So we're excited to share that with you in the future where.

Speaker: We've now put Novavax in a position to focus more on what we do best, which is research and development on this amazing technology platform. So we're excited to share that with you in the future. We're working diligently on transitioning the company away from focusing all of our energy on one product every season to now being able to focus on multiple shots on goal for potential future growth, which we laid out as our four drivers.

Speaker: We've now put Novavax in a position to focus more on what we do best, which is research and development on this amazing technology platform. So we're excited to share that with you in the future. We're working diligently on transitioning the company away from focusing all of our energy on one product every season to now being able to focus on multiple shots on goal for potential future growth, which we laid out as our four drivers.

Speaker: Working diligently on transitioning the company away from focusing all of our energy on one product every season to now being able to focus on multiple shots on goal for potential potential future growth, which we laid out as our four drivers were in that transition now and it's a period that we ask for a little bit of patience as we wrap up our <unk>.

Speaker: We're in that transition now, and it's a period that we ask for a little bit of patience as we wrap up our last season and we change the direction of the company toward that. We're excited about what the future holds, and we're excited to unveil that pipeline in the coming quarters.

Speaker: We're in that transition now, and it's a period that we ask for a little bit of patience as we wrap up our last season and we change the direction of the company toward that. We're excited about what the future holds, and we're excited to unveil that pipeline in the coming quarters.

Jim Kelly: We are updating our full year 2024 product sales guidance and expect to achieve between $275,000,000 and $375,000,000. This includes $100,000,000 for the APAs already delivered through mid-year and commercial product market sales of $175,000 to $275,000 in the second half of 2024. Importantly, our expectations for the U.S, market performance remain unchanged, and we expect the majority of remaining product sales to occur in the fourth quarter of 2024. The $150,000,000 reduction to the midpoint of our full year 2024 product sales guidance reflects $100,000,000 from the New Zealand APA.

Speaker Change: Last season, and we change the direction of the company toward this we're excited about what the future holds and we're excited to unveil that pipeline in the coming quarters.

John Jacobs: We're excited about what the future holds, and we're excited to unveil that pipeline in the coming quarters. Let's also look forward to learning more details on that.

Speaker: We look forward to learning more details on that. Thanks again.

Speaker Change: That's helpful look forward to learning more details on that thanks again.

Operator: Thanks again.

Operator: Thank you.

Operator: Thank you. Once again, if you wish to ask a question, just press star and one on your telephone keypad and the next question. Stranahan from Bank of America, please go ahead.

Operator: Thank you. Once again, if you wish to ask a question, just press star and one on your telephone keypad and the next question. Stranahan from Bank of America, please go ahead.

Speaker Change: Thank you once again, if you wish to ask a question just press star and one on your telephone keypad and the next question comes.

Alec Stranahan: Once again, if you wish to ask a question, just press star and one on your telephone keypad, and the next question.

Alec Stranahan: Try to hand from a Bank of America please go ahead. Hey guys, thanks for taking our questions. Just a couple for me.

Speaker: Hey guys, thanks for taking our questions. Just a couple from me.

Alec Stranahan: Hey guys, thanks for taking our questions. Just a couple from me.

Speaker Change: Shanahan from Bank of America. Please go ahead.

Speaker: One follow-up on the CICC program. Is your expectation that there could be an approved CICC therapy in the U.S. given you've shifted your Phase 3 enrollment to Australia and New Zealand? And then, just curious since the PDUFA for the BLA will be after handing the reins over to Sanofi, whether they had any input into the filing or if any of the terms under the collaboration are contingent upon receiving the BLA. Thanks.

Alec Stranahan: One follow-up just on the CIC program. Is your expectation that there could be an approved CIC therapy in the U.S. given you've shifted your Phase III enrollment to Australia and New Zealand? And then, just curious since the PDUFA for the BLA will be after handing the reins over to Sanofi, whether they had any input into the filing or if any of the terms under the collaboration are contingent upon receiving the BLA. Thanks.

Shanahan: Hey, guys. Thanks for taking our questions just a couple from me.

Alec Stranahan: One follow up just on the kick program is your expectation that there could be an approved kick therapy in the US given you've shifted your phase three enrollment to Australia New Zealand and then just curious since the pitiful for the BLA will be after handing the reins over to Sonofi, whether they had any input into the filing or if any of the terms under the collaboration are contingent upon receiving the BLA. Thanks. Good, Alec, great to hear from you. Thank you for your questions. I think the first question, we just want to make sure we understand your question correctly.

Stranahan: One follow up just on the kick program is your expectation that there could be an approved kicked therapy in the U S. Given you've shifted your phase III enrollment to Australia, and New Zealand and then.

Jim Kelly: We are in ongoing discussions with New Zealand in response to their desire to cancel this agreement, and $50,000,000 from EU commercial sales, as we target a smaller set of prioritized countries for the 2024-2025 vaccination season. For the remaining APA agreements, our intent is statically negotiate, or deliver doses, or when appropriate, exit agreements, with the goal of these activities to be cash flow neutral or favorable on a go-forward basis. To be conservative, we're removing APAsales from our forward-looking revenue expectations, until further clarity is available on each.

Speaker: Just curious since that particular for the BLA will be after handing the reigns over to Sanofi.

Speaker: Whether they had any input into the filing or if any of the terms under the collaboration are contingent upon receiving the BLA.

Bob Walker: Alec, great to hear from you. Thank you for your questions. I think the first question is, we just want to make sure we understand your question correctly. If I heard you clearly, you were asking, is there a chance for U.S. approval since the recruitment is occurring in Australia? So I'll hand that over to Dr. Bob Walker. Go ahead, Bob.

Bob Walker: Okay, great to hear from you. Thank you for your questions I think the first question. We just wanted to make sure. We understand your question correctly, if I. If I heard you clearly you were asking is there the chance for a U S approval since the recruitment is occurring in Australia, So I'll hand that over to Dr. Bob Walker go ahead Bob.

Robert Walker: If I heard you clearly, you were asking, is there the chance for a US approval since the recruitment is occurring in Australia? So I'll hand that over to Dr. Bob Walker. Go ahead, Bob. Right, so the study is; our plan is to conduct the study in the Southern Hemisphere, Australia, New Zealand as mentioned. The study would be done under USID, so those data would apply to a US application.

Bob Walker: Right, so this study is, our plan is to conduct the study in the southern hemisphere, Australia and New Zealand, as mentioned. The study would be done under USIND, so those data would apply to a US application.

Bob Walker: Right. So the study is airplane is to conduct a study in the southern Hemisphere, Australia, and New Zealand as mentioned the study would be done under U S. D. So those data would apply to our U S application.

Jim Kelly: We'll instead emphasize realization of cross-savings that come from exiting commercial markets. Our current operating plan, including the multi-year combined R&D and SGNA expense targets, highlights a path to maintaining our goal of at least one to two years of cash on hand, prior to receipt of cash flows from the Sanofia agreement in the form of milestones and royalties. We look forward to sharing additional updates as we seek to improve NOVAX's financial performance, cost structure, and strength to deliver shareholder value.

John Jacobs: And I believe, Alec, your second question related to the timing of BLA and the related milestone with Santa Fe and the timing of handoff of commercialization. Just to clarify, if you might clarify that, are you seeking to understand the timing of the potential receipt of that milestone payment that would be associated with that? Yeah, I guess I was more in terms of input from Sonofi on the BLA and whether, you know, there's anything contingent milestones or otherwise on that BLA. Thank you. Well, obviously we're working very closely with our partner Sonofi and very excited about that partnership and what it could mean in the future, but we have already filed that BLA, and that's already under review by FDA.

Speaker: And I believe, Alec, your second question related to the timing of BLA and the related milestone with Sanofi and the timing of handoff of commercialization. Just to clarify, if you might clarify that, are you seeking to understand the timing of the potential receipt of that milestone payment that would be associated with that?

Alec: And I believe Alec your second question related to the timing of BLA and the related milestone with Sanofi and the timing of handoff of commercialization and just to clarify if you might clarify that are you seeking to understand timing of the potential receipt of that milestone payment that would be associated with that.

Alec Stranahan: Yeah, I guess I was asking more in terms of input from Sanofi on the BLA and whether, you know, there's anything contingent, milestones or otherwise, on that BLA. Thank you.

Speaker: Yeah, I guess I was asking more in terms of input from Sanofi on the BLA and whether, you know, there's anything contingent, milestones or otherwise, on that BLA. Thank you.

Speaker: Yes, I guess I was asking.

Speaker: More in terms of.

Speaker Change: Input from Sanofi on the BLA and whether there's anything contingent.

John Jacobs: With that, I'd like to turn the call back over to John for some closing remarks. Thank you, Jim.

Speaker Change: Stones or otherwise.

Speaker: That BLA. Thank you.

Speaker: Well, obviously, we're working very closely with our partner, Sanofi, and we are very excited about that partnership and what it could mean in the future. But we have already filed that BLA, and that's already under review by FDA.

Speaker: Well, obviously, we're working very closely with our partner, Sanofi, and we are very excited about that partnership and what it could mean in the future. But we have already filed that BLA, and that's already under review by FDA.

John Jacobs: Before we take your questions, I'd like to thank you all for joining us today, and for your ongoing support, as we work to build a new vision and future growth platform for NOVAX. As you have heard, we're working hard to position the company for future growth with a focus on our new value drivers, including driver 1, the Sanofi partnership, which provides for a multi-billion dollar potential across upfront equity investment, milestones, and royalties over time. Value driver 2, our late-stage pipeline, value driver 3, leveraging our proven tech platform to drive additional partnerships and deals, and finally, value driver 4, our new early-stage pipeline.

Speaker Change: Well, obviously, we're working very closely with our partner Sanofi and very excited about that partnership and what it could mean in the future, but we have already filed that BLA and that is already under review by FDA.

Speaker: Yeah, just to add to that a little bit, you know, there's ongoing and constant interaction with Sanofi on all of these necessary steps. The BLA, importantly, one for the sake of the milestone, but also as we move forward and look at each and every next season, the preparation for the season, having the BLA in place is an important next step for us. And so, yeah, there's significant coordination between our organizations to make sure that we have the value of their inputs and that we're moving forward as quickly as we can.

Speaker: Yeah, just to add to that a little bit, you know, there's ongoing and constant interaction with Sanofi on all of these necessary steps. The BLA, importantly, one for the sake of the milestone, but also as we move forward and look at each and every next season, the preparation for the season, having the BLA in place is an important next step for us. And so, yeah, there's significant coordination between our organizations to make sure that we have the value of their inputs and that we're moving forward as quickly as we can.

John Jacobs: Yeah, just to add to that a little bit, you know, there's ongoing and constant interaction with Santa Fe on all of these necessary steps. The BLA importantly, one for the sake of the milestone, but also as we move forward and look at each and every next season, the preparation for the season having the BLA in place is an important next step for us. And so, yeah, there's significant coordination between our organizations to make sure that we have the value of their inputs and that we're moving forward as quickly as we can. Makes sense. Thanks for the color.

Speaker Change: Yeah, just to add to that a little bit.

Speaker Change: There is ongoing in constant interaction with Santa Fe on all of all of these necessary steps. The BLA importantly, one for the sake of the milestone, but also as we move forward.

Alec Stranahan: Makes sense. Thanks for the color.

Speaker: And look at each and every next season the preparation for the season, having the BLA in place.

Speaker: As an important next step for us and so yes, there is a significant coordination between our organizations to make sure that we have the value of their inputs and that we're moving forward as quickly as we can.

Operator: I'd now like to turn the call over to our operator for questions and answers. Thanks. Thank you.

Speaker: Makes sense. Thanks for the color.

Speaker Change: Makes sense thanks for the color.

Operator: Thank you.

Operator: Thank you. And we will now take the next question, which comes from the line of Eric Joseph from JP Morgan. Please go ahead.

Operator: Thank you, and we will now take the next question, and this comes from the line of Eric Joseph from JP Morgan. Please go ahead.

Speaker Change: Thank you and we will now take the next question and this comes from the line of Eric Joseph from Jpmorgan. Please go ahead.

Eric Joseph: And we'll now take the next question. And this comes from the line of Eric Joseph from JP Morgan. Please go ahead. Hi, good morning. Thanks for taking the questions.

Operator: We will now begin the question and answer session. To ask a question, please press star one on your touchstone phone. If you are using a speaker phone, please pick up the handset before pressing the keys.

John Trizzino: Hi, good morning, and thanks for taking the questions. First, on commercial, just with your U.S. sales guidance here, can you just talk about sort of what that anticipates in terms of dose volume you expect to go into market with and how you should think about sort of gross margins for your COVID vaccine moving to a PFS format? And then secondly, for the phase three study starting later this year, maybe just sort of by way of backing into the design of that trial, could you talk a little bit about sort of what activity profile or, yeah. And that's the comparative activity profile you'd like to be in the market with, or hope to be in the market with, compared to a stand-alone flu vaccine. Thanks.

Eric Joseph: Hi, good morning, and thanks for taking the questions. First on commercial, just with your U.S. sales guidance here, can you just talk about sort of what that anticipates in terms of dose volume you expect to go into market with and how you should think about sort of gross margins for your COVID vaccine moving to a PFS format? And then secondly, for the phase three study starting later this year, maybe just sort of by way of backing into the design of that trial, could you talk a little bit about sort of what activity profile or, yeah. And that's the comparative activity profile you'd like to be in the market with, or hope to be in the market with, compared to a stand-alone flu vaccine. Thanks.

Eric Joseph: Hi, good morning, Thanks for taking the questions.

Eric Joseph: Just on first on commercial, just with your US sales guidance here, can you just talk about sort of what that anticipates in terms of dose volume? You expect to go into market with and how you should think about sort of gross margins for the COVID vaccine, for your COVID vaccine moving to a PFS format.

Eric Joseph: Just on <unk>.

Operator: To withdraw your question, please press star and two. At this time, we will pause momentarily to assemble our roster. Once again, star and one, if you wish to ask a question. Thank you for waiting.

Eric Joseph: First on commercial just with your U S sales guidance here can you just talk about sort of what that.

John Trizzino: We anticipate in terms of dose volume you expect to go into market with and how we should think about.

John Trizzino: Sort of gross margins.

Speaker Change: The Covid vaccine for your Covid vaccine moving too.

Speaker Change: A PFS format and then secondly.

Roger Song: We now have our first question and this comes from the line of Roger Song from Jeff Reese, please go ahead. Great. Congrats for all the progress and thank you for taking our questions. Thank you, Roger. Thank you, John. So the first one is regarding the updated 2024 guidance and the standing, nothing really changed for the US company. Expectation mostly driven by the EU and New Zealand. Just the curious about the, can you give us some of the updates regarding the US contracting, given the standing of the season.

Eric Joseph: And then secondly, for the phase three study starting later this year, maybe just sort of by way of backing into the design of that trial. Can you talk a little bit about sort of what activity profile or, yeah, comparative activity profile you'd like to be in market with or hope to be in market with a standalone flu vaccine? Thanks.

John Trizzino: For the Phase III study starting.

John Trizzino: Later this year, maybe just sort of by way of backing into the design of that trial can you talk a little bit about sort of what.

Speaker Change: Activity profile or.

John Trizzino: Yes.

Speaker Change: <unk> of activity profile.

John Trizzino: To be in market with or hope to be in market with.

John Trizzino: With a standalone flu vaccine.

John Trizzino: Okay.

John Trezino: Eric, we'll hand the first question over to John Fuzino. I don't believe John we're disclosing specifics of dose volumes, et cetera, for competitive reasons, but you may want to take an attempt at Eric's first question. Yeah, no, I think what's important to talk about here is our readiness for the season. You know, the guidance is one thing, but our ability to accomplish what we think is aligned with that guidance has multiple factors. Focus on the pharmacy one, which we've talked about, which is significantly important. Also what pricing strategy is, and we're not going to get into disclosing what our kind of discounting strategy is on this call, but all pull together to make as well position availability of product near the end of the month, and certainly at the start of the season, making sure that the contracts are in place that we're well positioned from a discounting strategy to support access it into the product.

John Trizzino: Erika, we'll hand the first question over to John Trizzino. I don't believe, John, that we're disclosing specifics of dose volumes, etc., for competitive reasons, but you may want to attempt to answer Eric's first question.

Speaker Change: Eric I will hand, the first question over to John <unk> I don't believe John we're disclosing specifics of dose volumes et cetera for competitive reasons, but you may want to take an attempt that Eric's first question.

John Trizzino: Yeah, no. I think what's important to talk about here is our readiness for the season. You know, the guidance is one thing, but our ability to accomplish what we think is aligned with that guidance has multiple factors. Focus on the pharmacy, one which we've talked about, which is significantly important. Also, what, you know, the pricing strategy is and, you know, we're not going to get into disclosing what our kind of discounting strategy is on this call, but all pulled together to make us well positioned for availability of product near the end of the month and certainly at the start of the season, making sure that the contracts are in place, that we're well So I think that's kind of the most important takeaway.

John Trizzino: Yeah, no. I think what's important to talk about here is our readiness for the season. You know, the guidance is one thing, but our ability to accomplish what we think is aligned with that guidance has multiple factors. Focus on the pharmacy, one which we've talked about, which is significantly important. Also, what, you know, the pricing strategy is, and we're not going to get into disclosing what our kind of discounting strategy is on this call.

Speaker Change: Yeah, No I think whats important to talk about here is our readiness for the season.

Roger Song: How confident you are, you will be able to deliver this guidance in the US particularly. Thank you. Good question, Roger. John, do you want to take that one? Yes, George. Thank you, George. As well as many of the buying groups for the smaller grocers and independence. We made great progress over last year with things like online schedulers and access and stocking orders that will be in each of those. So much better progress from last year.

Speaker Change: The guidance is one thing, but our ability to accomplish what we think is aligned with that guidance as multiple factors.

John Trizzino: Focus on the pharmacy, one, which we've talked about which is significantly important.

John Trizzino: Also what.

John Trizzino: Pricing strategy is and we're not going to get into disclosing what are kind of discounting strategy is.

John Trizzino: But all pulled together to make us well positioned, availability of product near the end of the month and certainly at the start of the season, making sure that the contracts are in place, that we're well positioned from, you know, a discounting strategy to support access to the product and then availability throughout the whole season. So I think that's kind of the most important takeaway.

John Trizzino: On this call, but all all pulled together to.

John Trizzino: Make us well positioned to availability of product.

John Trizzino: Near the end of the month and certainly at the start of the season.

John Trizzino: Making sure that the contracts are in place that we're well positioned from.

John Trizzino: A discounting strategy to support access it into the product and then availability throughout the throughout the whole season. So I think thats, probably the most important takeaway.

John Trezino: I mean, then availability throughout the whole season.

John Trezino: So I think that's probably the most important takeaway.

Bob Walker: Thank you, John. And Eric, your second question, if we understood you correctly, you were asking about, I believe, what type of profile we're seeking or hoping to have out of our clinical program that could make our product competitive against others. Bob, did you want to address that?

Speaker: Thank you, John. And Eric, your second question, if we understood you correctly, you were asking about, I believe, what type of profile we're seeking or hoping to have out of our clinical program that could make our product competitive against others. Bob, did you want to address that?

Robert Walker: Thank you, John, and Eric. Your second question, if we understood you correctly, you were asking about, I believe, what type of profile we're seeking or hoping to have out of our clinical program that could make our product competitive against others. Bob, did you want to address that? Well, I'll say that for the purposes of the Phase 3 trial, the statistical test will be that the combination product performs in a non-inferior way, immunologically, to each of the individual components. So to kick to the influenza component and kick to the COVID component. So that would be the immunologic test, and the value of the product, I think, is the fact that it's a combination.

Speaker Change: Thank you John and Eric Your second question. If we understood you correctly you were asking about I believe what type of profile, we're seeking or hoping to have out of our clinical program that could make our product a competitive against others. Bob did you want to address that.

Bob Walker: Sure, well, I'll say that for the purposes of the Phase 3 trial, the statistical test will be that the combination product performs in a non-inferior way immunologically to each of the individual components. So, to kick the influenza component and kick the COVID. So that would be the immunologic test. And the value of the product, I think, is the fact that it's a combination. The design enables a hierarchical statistical analysis that can also evaluate superiority. So that's built into the design. And so we'll be able to make conclusions on both of those.

Dr. Bob Walker: Sure, well, I'll say that for the purposes of the phase 3 trial, the statistical test will be that the combination product performs in a non-inferior way immunologically to each of the individual components. So, to kick the influenza component and kick the COVID. So that would be the immunologic test. And the value of the product, I think, is the fact that it's a combination.

Bob: Sure well I'll say that.

Bob: For the purposes of the phase III.

Speaker: Trial.

Speaker: The.

Bob: The statistical test will be that the combination product.

Dr. Bob Walker: Performs in a non inferior way immunologically to each of the individual components, so to kick to the influenza component and kick to the Covid component so that would be the immunologic test.

Dr. Bob Walker: And the value of the product I think is the fact that it's a combination.

Robert Walker: The design enables a hierarchical statistical analysis that can also evaluate superiority, so that's built into the design, and so we'll be able to make conclusions on both of those points.

Dr. Bob Walker: The design is enables a hierarchical statistical analysis that can also evaluate superiority. So that's built into the design.

Dr. Bob Walker: And so we will be able to make conclusions on both of those are those points, but.

Bob Walker: All right. All right. Thank you. Thank you, Bob.

John Jacobs: But thank you, Bob. That was helpful on the design of the study and potential data points we could assess afterwards. John, T, any comment? Commercial viability here is critically important, as we look at the viability of our kick program, primary focus of the trial. We also took the opportunity to look at standalone flu. So standalone flu continues to be an important product and public health vaccine profile, but we also believe we've got a very strong candidate that could demonstrate improved efficacy in the market. We also want to establish a seasonal influenza vaccine as a foundation for possible pandemic.

John T: Thank you Bob that was helpful. On the design of the study and potential data points, we could assess afterwards, John T any comment.

Roger Song: I think that will provide an opportunity for those interested in getting the vaccine to come into the pharmacy. Some of our communication programs at the consumer level and then also at the pharmacist level will open that door to availability to the product. So I think all that's gone in a very positive direct.

Bob Walker: That was helpful in the design of the study and potential data points we could assess afterwards. John T., any commentary on the target product profile? Commercial viability here is critically important, right? As we look at the viability of our CIC program, the primary focus of the trial, we also took the opportunity to look at standalone flu, right? So standalone flu continues to be an important product and public health vaccine profile, but we also believe we've got a very strong candidate that could demonstrate improved efficacy in the market.

John Trizzino: Thank you.

Speaker Change: Commercial liability here is critically important right as we look at the viability of our kick program write primary focus of the trial. We also took the opportunity to look at Standalone flu right. So as Standalone flu continues to be an important product and public health.

Dr. Bob Walker: Vaccine profile, but we also believe we've got a very strong candidate that could demonstrate.

Mayank Mamtani: We will now take the next question and this comes from the line of Mayank Mamtani from the Riley Securities. Please go ahead. There are questions and congrats on many components of your portfolio showing progress today. About your kick, phase three study, maybe if you could learn some, you know, protocol differences that you have integrated in your program, you know, having the advantage of going third here. So if you could maybe highlight that and then, you know, why do, you know, both the, the flu vaccine and the, and the combination vaccine, the same study was to maybe trying to do separately is the other question because, you know, there are control on differences and, and you obviously have pretty strong compelling data on, on trained from, from the previous amount of flu candidate.

Speaker Change: Proved efficacy in the market. We also want to establish a seasonal influenza vaccine as a foundation for a possible pandemic in the future H five N. One continues to be important and b isn't being observed around the globe. So having the opportunity to have data coming out of our standalone flu vaccine knowing what some of those other dynamic.

Bob Walker: We also want to establish a seasonal influenza vaccine as a foundation for possible pandemics. For the future, H5N1 continues to be important and is being observed around the globe. So having the opportunity to have data coming out of our standalone flu vaccine, knowing what some of those other dynamics are, and knowing the profile of our flu vaccine and the significant improvements over existing flu vaccines, I think positions us well for future value creation.

John Jacobs: In the future, H5N1 continues to be important and being observed around the globe. So having the opportunity to have data coming out of our standalone flu vaccine, knowing what some of those other dynamics are, and knowing the profile of our flu vaccine, and the significant improvements over existing flu vaccines, I think position as well for future value creation. Thank you, Bob, and John, and Eric. One last comment there is that certainly we believe that our technology can afford the development of vaccines with a very good tolerability profile. And as the market moves toward combination, which our research indicates it should, with multiple seasonal diseases out there that people are trying to protect themselves against, that having a product where you can combine multiple antigens in with a very nice tolerability profile, potentially versus competitors, is very important in the marketplace for consumers as they make a decision on which combination vaccine they may want.

Dr. Bob Walker: And knowing the profile of our flu vaccine and a significant improvement over existing flu vaccines, I think position us well for future value creation.

Bob Walker: Thank you, Bob and John. And, Eric, one last comment there is that certainly we believe that our technology can afford the development of vaccines with a very good tolerability profile. And as the market moves toward combination, which our research indicates it should, with multiple seasonal diseases out there that people are trying to protect themselves against, having a product where you can combine multiple antigens in with a very nice tolerability profile, potentially versus competitors, is very important in the marketplace for consumers as they make a decision on which combination vaccine they may want.

Speaker: Thank you, Bob, John, and Eric. One last comment there is that certainly we believe that our technology can afford the development of vaccines with a very good tolerability profile. And as the market moves toward combination, which our research indicates it should, with multiple seasonal diseases out there that people are trying to protect themselves against, having a product where you can combine multiple antigens in with a very nice tolerability profile, potentially versus competitors, is very important in the marketplace for consumers as they make a decision on which combination vaccine they may want.

Speaker Change: Thank you, Bob and John and Eric One last comment there is that certainly we believe that our technology can afford the development of vaccines with a very good tolerability profile and as the market moves towards combination, which our research indicates that should with multiple seasonal diseases out there that people are trying to protect themselves against.

Speaker: That having a product where you can combine multiple antigens in with a very nice tolerability profile potentially versus competitors is very important in the marketplace for consumers as they make a decision on which combination vaccine. They may want so again, when we get the data we'll assess the data will steer the strategy and tell us how competitive it is but we have confidence in our tech platform.

Mayank Mamtani: So if you could maybe help clarify your strategy here, it would be helpful. So Mike, thank you for your questions. Bob, two questions from Mayank, the first is that we made any changes to the protocol based on what we've learned, the fact that we're going third here. And then secondly, it's questioned about one program versus two if you want to handle that one. Thank you. Sure. Thanks for that. So we do have as I mentioned earlier, we do have alignment with FDA on conducting a single phase free protocol to support both products. And we are in, we remain in dialogue with them on some of the details.

Speaker: So again, when we get the data, we'll assess the data, we'll guide the strategy, and we'll tell us how competitive it is. But we have confidence in our tech platform that it has a good chance to really produce a nice profile that will be competitive. Thank you.

Bob Walker: So, again, when we get the data, we'll assess it. The data will steer the strategy and tell us how competitive it is. But we have confidence in our tech platform that it has a good chance to really produce a nice profile that will be competitive. Thank you.

John Jacobs: So again, when we get the data, we'll assess the data, we'll steer the strategy and tell us how competitive it is, but we have confidence in our tech platform that it has a good chance to really produce a nice profile that will be competitive.

Speaker: That it has a good chance to really produce a nice profile that will be competitive. Thank you.

Operator: Thank you. Thank you, and we don't have any further questions at this time. Oh, sorry, we have. Oh yeah, no further questions at this time.

Speaker: Okay.

Operator: Thank you. And we don't have any further questions at this time. Oh, sorry, we do have. Oh yeah, no further questions at this time. This concludes our Q&A session as of now.

Speaker Change: Thank you and we don't have any further questions at this time.

Speaker Change: Already we have.

John Jacobs: Oh yeah, no further questions at this time. This concludes our Q&A session as of this moment. Now, over to your speaker, John Jacobs, for any closing remarks. Please go ahead.

Speaker: Oh, yes, no further questions at this time this concludes our Q&A session as of the moment.

Operator: This concludes our Q&A session as of the moment.

John Jacobs: Over to your speaker, John Jacobs, for any closing remarks. Please go ahead, sir. Thank you, operator. I appreciate it, and thank you, everyone, for joining us today. We appreciate your support. We appreciate your patience as we work through the future strategy for Novavax and start to deliver opportunities for long-term growth in four different categories that we highlighted today. We're excited about what the future holds as we continue to reduce our cost basis, move toward a more lean operating structure, and prepare for the next chapter in the company's history. Thank you so much for joining us, everyone.

Speaker: Albert.

Bob Walker: So I don't think we're prepared to actually discuss the specifics of the protocol design at this time. But let's say to answer your second question, we will leverage certain efficiencies by incorporating both products into the same study by using shared comparator control groups. And we also do know that the previous experience that you alluded to with the influenza vaccine can also be leveraged to support the safety database for the product for the new product.

Speaker Change: Speaker, John Jacobs for any closing remarks. Please go ahead Sir.

John Jacobs: Thank you operator appreciate it and thank you everyone to join US today. We appreciate your support we appreciate your patience as we work through the future strategy for Novavax and start to deliver opportunities for long term growth in four different categories that we highlighted today. We're excited about what the future holds as we continue to reduce our cost base.

John Jacobs: <unk> move toward a more lean operating structure and prepare for the next chapter in the company's history. Thank you so much for joining us everyone.

John Jacobs: Okay.

Operator: Thank you.

Bob Walker: Okay, got it. And then just on the long term, topics guidance that you put out there, you know, given that there are some interesting parts of your earlier stage by applying that you'd look to also advance and you talk to some of that. Could you just give us a little bit of a mix of, you know, R&D and also when should we start to see, you know, some of these candidates. Get into the clinic from either you are already going to your partner, Santa C. And thanks again for taking your questions.

John Jacobs: Thank you. This concludes our conference for today. Thank you for your attendance you may now disconnect.

Operator: This concludes our conference for today. Thank you for your attendance. You may now disconnect.

John Jacobs: Okay.

John Jacobs: Okay.

John Jacobs: Okay.

Bob Walker: Good. Good question. Mike Jim Kelly will address the financial question. Exactly. Mike, you're, you're right on spot in terms of capturing the dynamic of our cost structure change why we strategically enable really the unlocking of significant value from our early stage pipeline. We expect to vast majority, the majority of our cost structure as we approach that 2026 below 350 million to be invested back in this value creating a really stage pipeline as we continue to drive to a lean and agile organization, and then Mike, I believe you're the second part of your question was when do we expect to see some new assets emerge in our pipeline and what timing might that be regarding hitting the clinic.

John Jacobs: No.

John Jacobs: Okay.

John Jacobs: [music].

John Jacobs: Okay.

John Jacobs: Yes.

John Jacobs: [music].

John Jacobs: Yes.

Bob Walker: So I think we're excited to unveil what that new pipeline is by the end of the year. As you know, we're also deep into a search for our new president of research and development. We've had a lot of interest in Novavax, especially post the Senofi deal with further validation of our matrix M and proven technology platform, the fact that around the world people are recognizing what this technology is capable of. And I hope everyone was able to hear some of the examples that Bob Walker shared where we've added matrix them to other products that are established in market right now that are significant franchises for other companies.

Bob Walker: We've shown an ability to potentially improve those products and even reduce their cost of production. These are significant. And we believe our technology, we've only just begun to tap into that potential. So we're very excited to unveil what our exploration of that technology right now might be telling us on what else we can do beyond a seasonal vaccine beyond even respiratory potentially. We know that's where our wheelhouse is right now, but this this technology has capabilities well beyond what we've explored with it so far.

Bob Walker: So as we get to that unveiling, we will be sharing also mying some timelines on that. And we look forward to doing that in the future when we have more context. Importantly, we're deep into the analysis and exploration of what else we could do with the tech and post-Synofi and post the last 18 months of lifting our going concern, putting the goby situation behind us, reducing our current liabilities significantly, improving our balance sheet, improving our cash position.

Bob Walker: We've now put Novavaks in the position to focus more on what we do best, which is research and development from this amazing technology platform. So we're excited to share that with you in the future. We're working diligently on transitioning the company away from focusing all of our energy on one product every season to now being able to focus on multiple shots on goal for potential potential future growth, which we laid out as our four drivers were in that transition now.

Bob Walker: And it's a period that we ask for a little bit of patience as we wrap up our last season and we change the direction of the company toward this. We're excited about what the future holds and we're excited to unveil that pipeline in the coming quarters. Let's also look forward to learning more details on that. Thanks again. Thank you. Once again, if you wish to ask a question, just press star and one on your telephone keypad.

Alec Stranahan: And the next question. Try to hand from a bank of America. Please go ahead.

Bob Walker: Hey, guys, thanks for taking our questions. Just a couple for me. One fall up just on the kick program. Is your expectation that there could be an approved kick therapy in the US given you've shifted your phase three enrollment to Australia New Zealand? And then just curious, since the pitiful for the BLA will be after handing the reins over to Sonofi, whether they had any input into the filing or if any of the terms under the collaboration are contingent upon receiving the BLA.

Bob Walker: Thanks. Good, Alec, great to hear from you. Thank you for your questions. I think the first question, we just want to make sure we understand your question correctly. If I heard you clearly, you were asking, is there the chance for a US approval since the recruitment is occurring in Australia? So I'll hand that over to Dr. Bob Walker. Go ahead, Bob. Right, so the study is, our plan is to conduct the study in the Southern Hemisphere, Australia New Zealand as mentioned.

Bob Walker: The study would be done under USID, so those data would apply to a US application. And I believe Alec, your second question related to the timing of BLA and the related milestone with Santa Fe and the timing of handoff of commercialization. Just to clarify, if you might clarify that, are you seeking to understand timing of the potential receipt of that milestone payment that would be associated with that? Yeah, I guess I was more in terms of input from Sonofi on the BLA and whether there's anything contingent milestones or otherwise on that BLA.

Bob Walker: Well, obviously we're working very closely with our partner Sonofi and very excited about that partnership and what it could mean in the future, but we have already filed that BLA and that's already under review by FDA. Yeah, just to add to that a little bit, there's ongoing and constant interaction with Santa Fe on all of these necessary steps. The BLA importantly, one for the sake of the milestone, but also as we move forward and look at each and every next season, the preparation for the season having the BLA in place is an important next step for us.

Bob Walker: So yeah, there's a significant coordination between our organizations to make sure that we have the value of their inputs and that we're moving forward as quickly as we can. Makes sense. Thanks for the color. Thank you.

Eric Joseph: And we'll now take the next question and this comes from the line of Eric Joseph from JP Morgan. Please go ahead. Hi, good morning. Thanks for taking the questions.

John Trizzino: Just on, first on commercial, just with your US sales guidance here, can you just talk about sort of what that anticipates in terms of dose volume you expect to go into market with and how you should think about sort of gross margins for the COVID vaccine, for your COVID vaccine moving to a PFS format. And then secondly, for the phase three study starting later this year, maybe just sort of by way of backing into the design of that trial, can you talk a little bit about sort of what activity profile or yeah, comparative activity profile you'd like to be in market with or hope to be in market with with a standalone flu vaccine.

John Trizzino: Thanks. Erica, we'll hand the first question over to John Fuzino. I don't believe John we're disclosing specifics of dose volumes, et cetera, for competitive reasons, but you may want to take an attempt at Eric's first question. Yeah, no, I think what's important to talk about here is our readiness for the season. I, you know, the guidance is one thing, but our ability to accomplish what we think is aligned with that guidance has multiple factors, focus on the pharmacy one, which we've talked about, which is significantly important.

John Trizzino: Also what, you know, pricing strategy is and you know, we're not going to get into disclosing what our kind of discounting strategy is on this call, but all pull together to make as well position availability of product near the end of the month and certainly at the start of the season, making sure that the contracts are in place that we're well positioned from, you know, a discounting strategy to support access it into the product. I mean, then availability throughout the throughout the whole season.

John Trizzino: So I think that's probably the most important takeaway. Thank you, John. And Eric, your second question, if we understood you correctly, you were asking about, I believe, what type of profile we're seeking or hoping to have out of our clinical program that could make our product competitive against others. Bob, did you want to address that? Sure. Well, I'll say that for the purposes of the forums in a non-inferior way, immunologically, to each of the individual components.

John Trizzino: So to kick to the influenza component and kick to the COVID component. So that would be the immunologic test. And the value of the product, I think, is the fact that it's a combination. The design is enables a hierarchical statistical analysis that can also evaluate superiors in the community. So that's built into the design. And so we'll be able to make conclusions on both of those points. Thank you, Bob. That was helpful on the design of the study and potential data points we could assess afterwards.

John Trizzino: John, T, any comment on the product profile? Commercial viability here is critically important, right? As we look at the viability of our kick program, primary focus of the trial, we also took the opportunity to look at standalone flu, right? So standalone flu continues to be an important product and public health vaccine profile. But we also believe we've got a very strong candidate that could demonstrate improved efficacy in the market. We also want to establish a seasonal influenza vaccine as a foundation for possible pandemic.

John Trizzino: In the future, H5N1 continues to be important and being observed around the globe. So having the opportunity to have data coming out of our standalone flu vaccine, knowing what some of those other dynamics are, and knowing the profile of our flu vaccine, and the significant improvements over existing flu vaccines, I think position as well for future value creation. Thank you, Bob. And John and Eric, one last comment there is that certainly we believe that our technology can afford the development of vaccines with a very good tolerability profile.

John Trizzino: And as the market moves toward combination, which our research indicates it should, with multiple seasonal diseases out there that people are trying to protect themselves against, that having a product where you can combine multiple antigens in with a very nice tolerability profile, potentially versus competitors, is very important in the marketplace for consumers as they make a decision on which combination vaccine they may want. So again, when we get the data, we'll assess the data, we'll steer the strategy and tell us how competitive it is.

John Trizzino: But we have confidence in our tech platform that it has a good chance to really produce a nice profile that will be competitive. Thank you. And we don't have any further questions at this time. Oh, sorry, we have, oh yeah, no further questions at this time.

Operator: This concludes our Q&A session as of the moment.

John Jacobs: Over to your speaker, John Jacobs, for any closing remarks. Please go ahead, sir.

John Jacobs: Thank you, operator, appreciated and thank you, everyone, to join us today. We appreciate your support. We appreciate your patience as we work through the future strategy for Novavax and start to deliver opportunities for long-term growth in four different categories that we highlighted today. We're excited about what the future holds as we continue to reduce our cost basis, move toward a more lean operating structure and prepare for the next chapter in the company's history.

Operator: Thank you so much for joining us, everyone. Thank you.

Operator: This concludes our conference for today. Thank you for your attendance. You may now disconnect.