Q2 2025 Novavax Inc Earnings Call
Good morning and welcome to novavax second quarter 2025 Financial results and operational highlights conference call.
All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
After today's presentation, there will be an opportunity to ask questions to ask a question. You may press star then 1 on your touchtone phone to withdraw your question. Please press star 1 again.
Please note this event is being recorded.
I would now like to turn the conference over to Lewis. S vice president investor relations. Please go ahead.
Good morning, and thank you all for joining us today to discuss our second quarter 2025 financial results and operational highlights.
A press release. Announcing our results is available on our website at novax.com and an audio. Archive of this conference call will be available on our website later today.
An expectations with respect to potential, royalties milestones and cost reimbursements. Its expectations regarding manufacturing capacity, timing production and Delivery for its Co 1 9
of novavax's clinical and preclinical product candidates.
The timing and results of our clinical trials, including the the vaccine, postmarketing commitment study.
Fully year, 2025 Financial guidance and revenue framework and Nova vaccine future Financial or business performance.
these forward-looking statement contained in this presentation, is subject to risks and uncertainties that could cause our actual results to differ materially from those projected in such statements,
Additional information regarding these factors appears Under The Heading. Cautionary note regarding forward-looking statements in the presentation. We issued this morning and Under The Heading risk factors in our most recent form, 10K and subsequent forms and q's filed with the Securities and Exchange Commission available at sec.gov and on our website at novavax.com.
The forward-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.
Please turn to slide 3.
This presentation also includes references to non-gaap financial measures which are total adjusted Revenue, adjusted licensing, royalties and other Revenue.
Combined, R&D and sgna expenses. Less partner, reimbursements, and non-gaap profitability.
Please turn to slide 4.
Joining me today is John Jacobs our president and CEO who will provide an update on our progress during the quarter and highlight our growth strategy.
Dr. Alexandra draga head of R&D, will discuss our R&D updates, and Jim Kelly Chief Financial Officer and Treasurer will review our financial results and 2025 Financial guidance and revenue framework.
Sylvia, tailor, Chief corporate Affairs and advocacy officer will be available for the Q&A portion of the call.
I would now like to hand over the call to John.
Thank you Luis. I'm excited to be here today, with members of our executive team to share our second quarter results, and the meaningful progress that we've made.
Q2 is a strong quarter as we continue to execute on our strategy to expand access to our proven technology platform.
By advancing R&D Innovation and organically growing our portfolio.
Strengthening existing Partnerships while working actively to forge new collaborations.
This focused approach is designed to unlock multiple paths, to Value creation, and supports our outlook for potential non-gaap profitability, as early as 2027.
During Q2 we remain focused on our 3, strategic priorities for the year.
And now I'd like to take a few moments to highlight our progress on each of them during the quarter.
Our first strategic priority is optimizing our partnership with Santa Fe
During the quarter. We received bla approval for new vaccinated in the US which triggered 175 million Milestone payment to novavax to be received in the third quarter.
We also completed the transition of commercial activities, to Santa Fe in the US.
This means that for the 2526 season Santa Fe is now poised to assume the lead commercialization role for new vaccinated and select Global markets.
The Santa Fe partnership represents a significant value creation opportunity for novavax via the multifaceted nature of the agreement.
including,
Milestones and royalties associated with the commercialization of our Co vaccine. As noted we earned the 175 million milestone for the bla.
And in addition, we are on track for Milestone payments associated with the transfer of the US and EU marketing authorizations and the technology transfer related to newvac of the manufacturing, which are anticipated later this year and in late 2026, a respectively.
Beyond the economics related to new vaccine. Novavax is eligible to receive milestones in royalties associated with the development of new combination. Vaccines that include our Co vaccine
as a reminder Santa Fe is developing 2 combination vaccine candidates, which include our Co vaccine and their market-leading flu vaccines. Both of which receive FasTrak designation from the FDA last year.
Coid flu combo vaccine.
Andy has access to develop vaccines with our proven and unique, matrices and management.
For which novavax is eligible to earn milestones and royalties?
Together, we are excited that this partnership has the potential to increase access to our technology and drive a long-term value.
Our second strategic priority is to enhance our existing Partnerships and leverage our technology platform in pipeline to drive additional Partnerships.
Novavax is Cutting Edge, Tech platform. Consisting of our protein paste, nanoparticles. And are 1 of A Kind Matrix and Ament.
Has the potential to drive the development of both new and improved vaccines that are efficacious and tolerable.
This value, creating technology platform has been validated through current marketed products.
New vaccinated and the r21 Matrix. M malaria vaccine, our growing clinical data set and our current Partnerships
Let's talk about those current Partnerships.
This quarter, we optimized our partnership with teada for the Japanese Market through an updated collaboration and exclusive license agreement, which significantly improved the financial terms for novavax and improved the partnership's operating model.
With its advanced infrastructure and strong regulatory environment, Japan is the third largest global healthcare market. We believe our continued partnership will help to meet the needs of the core market in Japan.
To cater filed for approval of new vaccinated in June and is on track to have approval and doses in Market in time for the fall respiratory season.
Additionally through our partnership with serum Institute of India and Oxford University. The r21 Matrix. M, malaria vaccine has made meaningful progress in addressing the Urgent and unmet needs of malaria and demick regions. Since its first Administration in Ivory Coast, in June of 2024, The r21 Matrix and vaccine is helping to expand access to life-saving prevention in communities with limited Healthcare infrastructure with rollouts in 12 African countries as of April 2025.
In fact, over 20 million doses have been sold to date since launch in mid 24.
Malaria. Historically has killed over 600,000 people annually.
With a vast, majority of deaths occurring in children under 5 in sub-Saharan Africa.
R21 Matrix M, as the first low cost High, efficacy malaria vaccine produced at scale represents. Not only a clinical Global public health tool but also a strategic opportunity in a market where demand significantly exceeds current Supply.
We are pleased that our active and successful commercial collaborations with Sanofi Indicated and our Public Health Partnership with Serum and Oxford have positioned us as a partner of choice in the vaccine space.
With this strong momentum, we're actively pursuing new Partnerships that could help to further accelerate. The positive Global health impact of our technology and unlock additional value for both shareholders. And the communities, we serve
We believe that our technology platform can play an important role in driving innovation in the global vaccine Market that is expected to grow to over 75 billion dollars by 2030.
This quarter, we continue to advance strategic opportunities for our Matrix and management. Our unique Matrix m adyant is well positioned to drive Innovation via our own organic portfolio and partnering with potential to generate meaningful future royalty streams for novavax for years to come.
to date, we've signed material transfer agreements with 3 farmoor, the utility of Matrix M across novel indications, including its potential application in oncology
These Arrangements have led to discussions about potential business Partnerships to develop new vaccines and improve existing vaccines.
In parallel, we continue to explore the potential for government grants to support the development of our pandemic. Influenza vaccine candidates reinforcing our commitment to platform diversification and long-term value creation.
In June, we reported positive data from an initial phase 3 cohort showing our Co 19 or kick and Standalone flu vaccine candidates elicited strong immune responses similar to licensed comparators in the vaccinated and Flu Zone. High dose with over 98% of Adverse Events rated mild or moderate
These results are important and helpful as we continue to engage in discussions with potential partners for these late stage assets.
Roxandra will share additional insights and new data from the program in a few moments.
And finally, our third strategic priority is to advance our technology platform in early stage pipeline.
We're advancing a focused pipeline of vaccine candidates targeting unmet needs in infectious disease and we were exploring the utility of Matrix. M and oncology
Using a capital efficient model grounded in strong science and sharply focused on future commercial potential. We're also applying AI driven insights to accelerate candidate development.
At the same time we're sharpening our strategy to enhance the attractiveness of our technology, particularly Matrix M to potential partners.
This includes exploring new formulations and additional ideas to unlock its full value.
As we've noted before, our primary focus is to outline and or partner vaccine assets. We are developing in our pipeline, but if we discover a significant opportunity via those R&D efforts, we may decide to bring that asset forward on our own.
Value proposition indicates. It is best to keep that asset with novavax.
As you can see this quarter, we continue to progress our growth strategy across all of its core elements.
Delivering on our existing Partnerships.
Furthering, discussions with potential future partners and advancing our pipeline.
Later in the call, Jim will highlight the progress we've made in driving greater operational efficiency as we transition to a more lean and agile business model.
Taken together the progress, we're making is well aligned with our corporate growth strategy, and continues to strengthen our foundation. Fueling the potential for long-term value creation, and positioning us to deliver meaningful impact on a global scale, potentially improving the lives of billions.
I'd now like to turn the call to roxandra to discuss our R&D updates. Roxandra
thank you, John.
Turn to slide 7.
This is the last earnings update. We progressed our programs and I am excited to share several important developments.
Starting with new insights from our kick and Standalone flu program.
Followed by promising new data from our 85 N1 program.
We've also made strong progress across our preclinical pipeline, including our RSV combination, CDC and VCC programs.
Please turn to slide 8.
I start with our late stage, kick and Standalone flu program.
In June, we announced results of the initial cohort of our kick and Standalone, flu trial.
Where both vaccine candidates.
Induced robust neutralizing antibody responses that were similar to licensed comparators.
In vaccine development, for diseases like, influenza and coid. We look for differentiated attributes such as breadth of protection against drifty strains and the durability of response.
A vaccine that can provide protection for a longer period of time could have a significant impact during the quarter. We generated new data including additional analysis of diesel responses, which showed that in both the Standalone, flu and kick arms increases from Baseline in influenza specific, polyfunctional expressing CD4 positive T cells where numerically higher than in the comparator flu Zone, high dose arm.
This is notable as T cells. Recognize conserve influenza epitopes which are associated with broader and longer lasting immune responses.
T cells. Also play a key role in viral clearance and contribute to durability of protection.
In addition, T cells, coid specific responses were similar between kick and no arms.
While this immunogenicity and safety trial was not a pivotal trial, the data can inform a future. Registrational phase 3 Program,
we intend to partner, both candidates to conduct registrational trials. And as John already mentioned, partnering discussions are underway.
Please turn to slide 9.
Give you an influence of vaccine candidate.
Built on our recombinant protein based platform and Matrix. M Adrian generated. Robust immune responses. After a single or 2 dose inasal or intramuscular Administration in Prime non-human primates.
This indicates that we may be able to offer flexible options for consumers.
For example, internal Administration could lower viral loads and potentially result in decreased transmission.
In addition a live vaccine which might require 2 or more doses for full protection, the possibility to administer a single vaccine dose is important in the context of a pandemic.
This findings reinforce once again, the strength of our technology platform and highlight the potential of our pandemic influence of program.
Please turn to slide 10.
On the preclinical side, our RSV combination CDC seal and visit the software programs have continued their rapid Journey towards development of compelling differentiated and commercially attractive. Next Generation vaccines.
This assessments are executed in carefully, thought out, in silico in vitro and animal models that will address those in regimens and criteria. For our predefined Target product profiles.
Our goal is to rapidly position, the programs for the clinic.
For the CDC field program. We are initiating and prioritizing animal models to delineate key biology questions on humoral and mucosal immunity and focusing on translational questions.
We have Incorporated new proteins into our antigens, in addition to the main toxins to enhance differentiation efficacy and cross variant protection.
1 of the main challenges for CDC is that vaccines are not cross protecting against various bacterial Riot types.
Protection against CDC seal and its complication remains a large unmet, medical need with no CD vaccine available today.
For the RSV combination. We are incorporating important lessons learned from our first generation RSV clinical program, and our kick program into a second generation antigen design.
Our technology platform facilitates combination vaccine development, and this matters as consumers have indicated a preference for combination vaccines.
For shingles prevention, we can continue to generate key differentiation data in preclinical models with a goal of showing similar efficacy with existing vaccines while demonstrating lower ratio jennetty.
This comes from the observation that as risk, adults, are declining singles, protection, or don't complete their vaccination series due to fear of adverse effects.
finally early data shows initial promise in use of Matrix Beyond conventional vaccines,
Opening new avenues of research in highly compelling disease. Use cases.
For example, this quarter, we generated preliminary positive data using Matrix M with an oncology vaccine candidate with potential future applications across several tumor types.
As a means to advance our clinical programs, we also continue to innovate with our technology. We have strategically added to our translational medicine, and Advocate teams to ensure we have the right technological capabilities to continue to build out our next generation of R&D using our existing preclinical programs. As a test bed,
And construct design tested with expanded High throughput cloning and second. The use of AIML approaches to rapidly and cost-effectively create and test antibodies, including assessing antigenic epitope Integrity of new antigens
this data gives us unprecedented insights into the behavior of antigen and adjunct drug substance which helps prepare for clinical positioning
Looking ahead. We are excited to host our investor day in the coming quarters. Where I will go into greater detail on the programs I've discussed today.
As we advance our early stage pipeline, we intend to take a strategic and fiscally disciplined approach prioritizing programs that address, significant unmet, medical needs and offer compelling commercial potential.
And now, I'll turn the call over to Jim.
Thank you. Roxandra, please turn the slide 11.
This morning, we announced our financial results for the second quarter of 2025.
Details of our results can be found in our press release issued today and in our form 10 Q filed with the FCC.
Please turn the slide 12.
I'll begin with key highlights from our second quarter, 2025 Financial results.
Novavax reported total revenue of 239 million as compared to 415 million in the second quarter of 2024.
Total revenue included 175 million Milestone earned from Kofi related to the May 2025 FDA approval of our Nexa vide bla in the US.
We expect cash, receipt of the 175 million milestone in the third quarter of 2025.
During the second quarter of 2025, we continue to transform novavax into a more lean and agile organization.
Evidence this quarter includes the 41% reduction in our combined R&D and sgna costs compared to the same period last year.
And of note, we reduced sgna by 57%. As we transferred lead commercial activities to seney and reduced infrastructure.
Looking forward, we are updating our full-year 2025 revenue framework and financial guidance to reflect the impact of the recently announced FDA post-marketing commitment. Importantly, we do not anticipate the cost of the study to have an impact on our 2025 and 2026 operating profit profile. As Sophie reimbursement is expected to cover the incremental study costs added to our plan.
We ended the second quarter with over 850 million in cash and receivables, including the 175 million Milestone payments from Sophie.
In addition, we anticipate earning an additional 50 million in Milestones from Sophie, in the fourth quarter of 2025, upon the transfer of marketing, authorization for the US and Europe.
Our goal is to drive financial performance by reaching and growing non-gaap profitability. And maintaining at least a year and a half to 2 years of cash on hand at all times.
Depending on the near-term performance of our partners. We see the potential to achieve this profitability Mark as early as 2027.
Please turn to slide 13 for a detailed review of our second quarter, Revenue results and disclosures.
For the second quarter of 2025, we recorded total revenue of 239 million compared to 415 million in the same period in 2024.
Product sales for the second quarter of 2025 of 11 million, consisted of 13 million, from Supply sales and -2 million of novaka vide product sales, from the clothes out of our US market activities and related, return Reserves.
our second quarter Supply sales were primarily from agent sales, to our licensed partners,
Better reach, manufacturing, economies of scale, and AIDS: the improvement of our margins.
Of note, year-to-date sales of the r21 Matrix and malaria vaccine of 14 million doses. Already exceeds the 6 million doses, sold for the full year, 2024 and highlights the steady progress being made by our partner of the serum Institute with the launch.
We recorded 229 million of Licensing, royalties and other Revenue in the second quarter consisting of 199 million and 27 million related to our Kofi and Teka agreements respectively.
Please turn to slide 14 for a detailed view of our second quarter Financial results where I'll focus on our operating expense results and Trends, second quarter 2025 combined, R&D and sgna expenses. Were 123 million and reflect a 41% and 85 million reduction from the same period in 2024.
Importantly, our sgna expenses were 57% lower than the same period last year and are driven by the transition of the lead, global commercial activities to sopi plus strong execution of our broader cost reduction plan.
Research and development expenses of 79 million in the second quarter of 2025 were primarily driven by our investment in the kick, flu study and support of seni for the upcoming Co 19.
Smaller portion of the spend is presently directed towards our early stage preclinical programs.
And finally we reported net income of 107 million or 62 cents per diluted share for the second quarter of 2025.
Please turn the slide 15.
In May 2025, the vaccine received U.S. market authorization, and with that approval came an FDA request to complete a post-marketing commitment study, or PMC.
Today, we are sharing the specifics around the execution of this study and its impact on novavax's Revenue framework and financial guidance.
Importantly.
We are hearing that. This update is not anticipated to have an impact on our 2025 and 2026 operating profit profile. As Sophie reimbursement, is expected to cover the incremental study costs added to our plans.
The PMC study is anticipated to occur during 2025 and 2026 with a total cost of between 70 and 90 million.
Novavax will conduct this study on behalf of Sophie and novavax will be reimbursed, 70% of total cost or approximately 55 million midpoint of that range.
And in the cable below, we outlined both the specific updates we are making to our revenue framework and financial guidance, and introduced a new metric where we show our combined R&D and SG&A expenses less partner reimbursements.
This new non-gaap metric reinforces that we are on track with our previously. Communicated expense targets through 2027 when adjusting for partner reimbursements,
Please turn the slide 16.
We are committed to streamlining our operations to enable value creation.
Our updated full year 2025 Financial guidance for Combined R&D and sgna expenses is now 495 to 545 million to include the addition of the PMC study.
We are also sharing our multi-year targets, highlighting our expectations for 2026 and 2027 combined, R&D and sgna expenses. Net of partner reimbursements of 350 million and 250 million respectively.
We believe that providing both the gross spend and net of partner, reimbursement views provides investors with a better understanding of our core operating cost structure.
The resulting lean and agile operating model is focused on targeted investments in R&D to drive value creation.
Please turn the slide 17.
Now, turning to our 2025 Revenue framework.
Raising our prior Revenue framework and now expect to achieve a justed total revenue of between 1 billion and 1 billion, and 50 million.
Our 2025 Revenue framework, excludes Sophie Supply sales royalties.
Influenza coid combination and Matrix M related milestones.
This means there may be Revenue in 2025. That is added to our expectations for adjusted total revenue for the year.
At midpoint the 25 million increase to our 2025 adjusted. Total revenue is driven by
a 5 million increase to adjusted Supply sales related to increased demand for Matrix and from serum for the r21 Matrix M malaria vaccine
And a 20 million increase to adjusted licensing, royalties and other Revenue.
That has 3 components and includes.
A 20 million increased Towhee cost reimbursement related to the PMC study.
At 10 million, increase to other partner, revenue from ta based on milestones and royalties under that agreement.
And a 10 million decrease to amortization related to the Sophia upfront payment and pediatric Milestone that we now expect to recognize in 2026.
Our year-to-date, 2025 sales of 906 million.
Leaves 119 million to be recognized in the second half of 2025 at the midpoint of our Revenue framework for adjusted total revenue.
We expect the majority of this remaining amount to occur in the fourth quarter.
We look forward to sharing additional updates as we 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.
In summary, we intend to drive long-term value, creation through our corporate growth strategy, and continue to focus on our 3, strategic priorities.
First executing on our Santa Fe partnership and in doing so successfully demonstrating, we are a partner of choice.
Second enhancing existing Partnerships and leveraging our technology platform and pipeline to forge additional collaborations.
And third advancing our technology platform and early stage pipeline.
Thank you all for joining us today in a sincere. Thank you to our employees, for their unwavering dedication, to advancing our mission.
I'm proud of what we've accomplished and I'm energized by the opportunities ahead as we execute on our strategy to drive meaningful value. I'd now like to turn the call over to our operator for Q&A operator.
Thank you. We will now begin the question and answer session to ask a question. You may press star then 1 on your touchtone phone, if you're using a speaker-phone please pick up your handset before pressing the keys to withdraw your question. Please press star 1 again.
At this time, we'll pause momentarily to assemble our roster.
And we'll take our first question from Roger song at Jefferies.
Uh, great, congrats for all the progress, and then thanks for the update. And thank you, all questions, uh, 2 from us. Uh, 1 is in terms of the 2025 2026, uh, call this season Supply, um, given, um, you will continue to use gm1, uh, would you still file for, uh, approval for the season, uh, for your vaccine and then, uh, when um, the supply?
Will be ready, uh, for the 4, uh, the season and then also second question related to this, uh, kick and flu partnership discussion. Uh, any additional comments regarding the interest, level the progress and then, uh, how should we think about the timeline? Uh, you will be able to uh, sign a partner to move forward into the uh pivotal thank you.
Jim. You want to take Roger's first question.
Uh, certainly and, uh, good morning, Roger. You know, with respect to the regulatory filings, uh, for Readiness, for our Co vaccine, for the, for the fall season. Uh, you're right that we had a bla approval for jm1 which is our intent to deliver that vaccine jm1 this fall.
And therefore, uh, the regulatory filings we're doing right now for Readiness, for the fall, are really um, focused on that improvement in shelf life, profile, and stability.
All right. Um, and then I believe your next question related to, uh, the combination vaccine potential partnering. Can you just restate 1 more time?
Yeah, sure. So for the just any comments around the interest level, the progress of the discussion and then uh uh what's the timeline we should look at, um, or expecting for the partnership to move forward. Good question, Roger. You know, obviously due to the nature of those types of conversations, we can't give detail or comment on that. But what we did allude to is that we are in conversation with multiple potential partners and as things develop and we can share, we will, I will say that there's been strong commentary. We've been pleased with from our partner sanoi. So if you take a look at their statements in their recent earnings discussions, um, they speak very positively about the potential of combination assets in Co flu. Moving forward in the future. Both of the assets. They're developing with our new vaccinated receive FasTrak designation from FDA, and we're very excited about the potential of that future. RX did you want to add anything else on Roger's? Question regarding kick flu combination.
So, uh, the only thing that I would like to add is, as you might remember, this was the first cohort from uh, the trial where we were assessing the immunogenicity uh, and obviously adding to the safety database, uh, the data that we have generated was to actually strengthen the body of data that we already had and it was not a registrational trial. Uh, the registrational trial would be undertaken by that potential partner. When that partnership with occur?
Got it. Thank you.
We'll move next to Mac, M, Tammy at B Riley securities.
Yes, good morning team. Thanks for taking your questions and congrats on the progress. So, maybe just following up on, on the. Uh, yeah. Thank you. John following up on the prior comment about, uh, the the new data that was presented, uh, regarding the CD4 T self superiority versus Susan heydos. Um uh, including for both kick and team, NIV and H3 H1, And1 and S3 and2. Uh, just curious, uh, rugs would you expect a relatively comparable data set being generated in the in the Santa Fe study and and also wondered how important is the B strain?
Specific immunogenicity. Um uh, you know uh in context of understanding the profile of of Standalone, flu and and kick, uh, when when you also obviously talk about what additional strategic are looking for and then I have a quick follow-up.
Brooks, do you want to comment on my question? Uh, yes. So we cannot comment on Saint office progress. Obviously, we are not privy to their data, uh, and, uh, we can actually just relate our data from our experiments from this first cohort, as I was mentioning. Uh, it was very encouraging to see that uh, this CD4 positive T cells, uh, polyfunctional were actually comparing very favorably, both in the case of tniv and the kick with a comparator, uh, which is Flu Zone high dose as far as the specific strains. Uh, again, that is a little bit speculative because every year, as we know very well in the case of influenza, uh, you have different strains that are circulating, uh, and the data that we have today is indicative.
Of the direction of travel. How each and every 1 of the strains is going to behave in a particular season, uh, is actually to be seen and assessed,
But we're encouraged by the data. Uh, Mike, we're encouraged by the data and we will keep uh, keep driving forward with it.
Mike want to make sure I fully understand your question, so I think it was 2. 2 questions in 1 or 2 parts to your question. If I understand you correctly, the first part you're asking about the process from mta's, migrating into a financial transaction. Is that the first part of your question? Yeah, so that's more industry, specific. And then the, I guess the second part to the, the the broader question is that, you know, the part of framework is evolving also as it looked at, you know, at different platforms, uh, Beyond mRNA. So I was just curious. Uh, how how? Maybe that progress. Uh, if if any is, is is ongoing
All right. Mike. So so, so, take the first question, obviously, as, as limit to what I'm able to share here with you today, and with everyone today, that due to the nature and sensitivity of conversations around Business Partnership deals and uh, but mtas are good because it allows potential Partners to explore our technology in their own laboratory and see what it's capable of. And if it could solve needs that they have, then those said potential Partners might want to discuss with us, you know, potential deal for that, or a licensed deal. Etc. So that's why we we're happy to get those MTA signed because we believe in our technology, we've done experiments internally in our own lab with multiple vaccines, that either exists today, and or could exist. And we know what we believe, we know what Matrix, m is capable of, and we're sharing some of that data under CDA with potential partners and then if they're doing experiments on their own and improving that out for themselves, that's further Evidence.
That there may be something here for them to explore more deeply. And perhaps in a financial Arrangement, there's not much more we can say on this until these deals materialize, and then we'll be glad to share. So I think there was another comment about Barta. So let me just uh pass that over to Sylvia tailor. And then we may have roxandra add to that as well. Go ahead, Sylvia. Hey Maya. Thanks so much for the question. Um, you know, certainly there is a lot right now. Uh, that is evolving in the, the policy, um, landscape. And, you know, I think as it relates to Barta, um, look, we're excited about the asset that we have. We are excited about the, the data that roxander talked about for our pandemic influenza asset. Uh, we continue to work with Barta on, uh, potential funding, um, you know, really can't comment too much about, um, what they're looking at, in terms of other technology platforms. But, you know, we always talk about the importance of having, um, our technology option available, and
And that's something that I can say, is resonating. So, as those conversations continue and we have anything to report, we'll definitely keep you posted. Yeah. And there, there was news news, you know, today about contracts getting canceled Sylvia, right? So, maybe that's a related to your question my ink. But we, you know, we believe there's still interest, uh, both from the Europeans and the US authorities and exploring potential with novavax and our technology for p. Pandemic, preparedness rocks. Did you want to add a thought to that before we move on? Uh, so thank
Thank you, John. Uh, the only thing that I wanted to add is as we have seen in the past uh in every single 1 of the applications, both for infectious diseases, generally speaking. And for this emerging and pandemic threats, there are multitude of platforms that can be used to develop, uh, safe and efficacious vaccines. Uh, we happen to have 1 of them, which is, uh, uh, a protein based platform with a matrix M Adrian. Uh, and our work that has been just recently published, as I've mentioned in in nature, communication has shown that, that is a viable alternative at least for the moment. In non-human primates obviously, uh, the the work has to be continued in order to uh, you know, give data that is relevant for uh protection of the general public but there are
Many platforms out there and the fact that you know, we are moving to a platform or another is just a matter of choice and of science.
Thank you Sylvia. Thank you. Thank you. Mike.
We'll go next to Chris Lo Bianco at TD. Security's?
Oh, thank you for taking our questions. Um, first, what is your level of confidence in positive efficacy data from the post marketing, phase 4 trial and is there an inter interim analysis and second bigger picture question, is the company.
Or open to acquiring or in licensing clinical stage candidates. The company has a great platform but it also has a highly experienced team in strong cash Outlook, which could be a value, add for accelerating, the development of external clinical clinical stage candidates. Thank you.
Part of your question please. Chris
um, are you open to acquiring or in licensing clinical stage candidates?
Yeah. Right. Right. Now we're focused on external partnering and internal development of our own candidates via our pipeline. So, that's the company's Focus right now. And in generating, first of all, optimizing our existing Partnerships with the first and foremost Sophie, but also teada, and with serum and other organizations that we're proud to partner with and then investing in our technology platform where in the coming quarters we intend to share some initial data that's emerging from those exciting assets that we're working on and very early stage. And we're also exploring Beyond infectious disease and seasonal, respiratory viral a pro uh vaccines. We're exploring uh the potential of Matrix M and oncology. So we look forward to sharing some of that data. In the coming quarters with you. Jim, did, you want to add a little color to that? Uh, certainly. Thank you John. Uh, so Chris 1 of the things that we are emphasizing about how we unlock value from our technology platform is that the more people we can get this differential.
Tech uh technology into their hands driving. More Innovation, more vaccines. We believe that does the best for Global health and for Value creation and for that reason, that is why we are so so focused on um, ensuring folks understand what Matrix M can do to either. Develop new.
Vaccines or, um, perhaps even improve upon existing you, you saw earlier in our remarks. Hey, we, we see an industry that last year vaccines was over 57 billion. Uh, that McKenzie, uh, study notes. It's going to grow over 75 and, and even Beyond, we have a platform that has utility across multiple modalities, and we believe we've got the ability to really be, uh, a driver of growth in in this industry. And that's where we're focused. Yeah, Jim well said and Chris, that's a great question. You know, another way to look at our technology platform is it has utility as Jim said across multiple other vaccine platforms could potentially have utility as a therapeutic.
Uh could potentially have utility Beyond respiratory and infectious disease. So the way we see our Matrix M platform is that we haven't really yet begun to tap. Even the full potential at all of this platform and we see it potentially being involved in multiple vaccines across multiple partners and coming out of novavax for years to come.
Thank you.
We'll go next to Alex, turn on at Bank of America.
Uh, Hey guys. Uh, thanks thanks for the questions. Um, 2 2 from us. First on the, on the PMC, appreciate the color Jim provided on the, the cost reimbursement. I guess, what information can you share on the design, design the size? You know, the timing
of the requested PMC. Um, and second, how does, you know, the shifting winds at the FDA with RFK pulling mRNA vaccine, maybe provided Tailwind, uh, for you guys with potential Partners, thanks,
RX, did you want to provide just a brief bit of color on the the size scope scale of the PMC?
As you know, and as we have previously uh discussed uh this is a post-marketing commitment. So basically, uh, a study that occurs after the marketing authorization, uh, that could provide additional Insight in a specific age population. Uh, and, um, looking at very clear and points, uh, we do, uh, work towards starting the study as fast as possible and generating that data, um, per the agreement with the regulatory agency. So we hope to start to study, uh,
Uh, as soon as at the end of this year, uh and obviously generate the data in the next uh, in the next quarters thereafter and out, you can see the estimated cost of 70 to 90 million. So that that probably tells you a lot about the scope and scale and uh, whatever type of Burden that may be. It's, you know, there's the post marketing commitments are not uncommon and this is something we can handle on. I think Jim put it in a in a good perspective. Jim anything to add on that.
And Alex, your second question was about a Tailwind, right? I found that very, very interesting, you know, when you see the news today about some, some grant funding being pulled from mrnas by the current Administration. What what we are encouraged by actually is, is what we've seen is the continued investment in vaccines by peer companies. And by large companies, you've seen a recent, a recent acquisition of a vaccine platform by Santa Fe, uh, partner that we have here at novavax. You've seen investment being made in in with our partner. Santa Fe in their combination uh vaccines both of which were fast-tracked, right? You see other companies investing in vaccine platform and Technologies. You see a company like a ficer in their earnings, call mentioned vaccines as a top 3 Priority of investment go forward for the company, right? So companies that have been in vaccines for a long time who understand the value of vaccines for public health and and for their bottom line, um, our continuing to make those Investments. So we we see that
From ourselves, excited about the future. Our peers seem, uh, steady and excited about the future, and the Sylvia, you may want to comment on any potential Tailwind based on the news today. Yeah. John, I mean, totally agree with what you said. I think, um, you know, when you're you're talking about vaccines, you're talking about different platforms and I think, you know, certainly, um, there have been, uh, a lot of questions. Um, as we saw about the, you know, the news that that John mentioned yesterday in terms of, uh, Barta pulling, um, funding for
Or mRNA, um, you know, we we think that um, there there's potential impact, um, for us and of course, for our partner Santa. Fe and a couple of areas, I mean, 1 I think is development of pandemic influenza, uh, candidates. Um, we've already talked about the fact that, that, we have an asset we're working with Barta to explore the potential for funding. Um, and and there is the potential opportunity for us, um, particularly since other platforms may be may be taken out of consideration in that. And then I think the other thing is, you know, seasonal, execution, and what it could mean. Um, for for the market going forward, uh, certainly, I think right now there is, um, a lot of support for an alternative technology platform for protein based technology platform. And um, you know, we're excited to to partner with Santa Fe as they take the lead commercial. Commercialization role and execute um, in in this environment.
Thank you, Alex. Thank you.
And as a reminder to ask a question. Please press star 1, we'll go next to Tom shraider at PT.
Uh, good morning, thanks for all the, the detail. Uh, the the profitability comments for 2027 is that assume worldwide Co vaccine use is about flat.
And then a remedial 1 for roxandra. All your talk about uh more robust, flu responses the multi-year, flu vaccines, make sense, ever, I mean or does The Strain essentially always drift too much to make a vaccine that lasted 2 years valuable. Thank you.
Jim, you want to take the first question. All right. Certainly and, uh, appreciate appreciate the question. Um, we have as a objective of this company to drive value, the goal of reaching, not just profitability, but sustainable and growing non-gaap profitability in addition. And in the interim, we're focused on making sure we have, uh, the financial strength with, at least, a year and a half to 2 years or more of cash on hand. What you're seeing is, we are, uh, setting up the company to unlock value and then with respect to the comments around as early as 2027. And of course, this is dependent on the performance of our of our partners. Um, we see multiple paths to profitability and I'll, and I'll just give you a couple of examples that I emphasize a little bit earlier this year.
um,
Are non-gaap profitability profile. And I'm going to start with uh the break even and our expense profile. Uh Target for 2027. We've told you R&D and sdna of 250 million and just to simplify math. Imagine the cash. Opex there is about 2 and a quarter 200 to 2 and a quarter.
Then another alternative, um, advancing the flu and and kick combination by senu the, uh, approval. Launch. Milestone itself is 225 million and would meet the objective, uh, on its own of getting us to break, even just there with royalties. And, of course, growing revenues on the back back end of of that launch. And that's me yet to even address other new, uh, collaborations that we're working towards that could in turn Drive additional cash flow for the company. And so it is really the combination of the transformation into a lean and agile cost structure that creates. I'll call it this far. Lower bar towards profitability and then the maturing and evolution of our partnering plan to drive cash flow to the company, to not just break, even but grow a sustainable cash flow as a company over time to create value.
Thank you, Jim and roxander. Did you want to take the second question? From Tom, about a, a flu vaccine, a multi-year, flu vaccine. Thank you.
Uh, well, uh, it is, it's implied from your question. The, um, influenza vaccines are typically subtype specific. Yeah, and that is changing every year, where there has been a tremendous effort in the field in the last 35 years for these more universal vaccines. Uh, for the moment, those efforts...
Have not been brought to to, uh, freezing. I would say, uh, the data that we are generating is actually showing that our vaccine can offer a little bit broader, um, immune protection. So, uh, slightly heteros subtypes, uh, might be in the scope of that protection. And also the the tell data that we have generated. It's showing that we can probably confirm a little bit of, uh, a more durability of protection. But we need to look at the durability of protection or that heteros protection, uh, in the context, you know, uh, the current vaccines might protect for a season a season. It means a few months. What if we can actually protect for 6 months or for 12 months? It would already be, uh, you know, an advancement versus
The current state of science is that we will be able to confer protection for 2 years or 3 years or for longer, or have these universal flu vaccines. I actually think that the jury is out there. There have been so many efforts in that field, and unfortunately, they all have failed for the moment.
Okay, great. Thanks for all the colors.
And we'll go next to Jeff Meacham at City.
Hey, good morning guys. This is jway on for Jeff. Thanks for taking the question. Um, you know, as part of the RFK J's comments yesterday about the Barta situation in the framework. You know, definitely the comments on mRNA could be perceived as Tailwind for you guys but among his comments, he also noted the desire for a universal vaccine rather than antigen specific vaccine.
Uh, based on that. How do you think that might impact? You know, discussions going forward, uh, for interest for your flu and kick vaccine for partners? And then a second question for us is um, you know, you guys have noted
interest in going in oncology and additional plans to be on respiratory vaccines, uh, you know, given
the importance of that Beyond respiratory revenues. Uh, you know, how do you think
You know, you guys might be able to fund those programs to Novo on the current expectations of cash generation from the fancy collaboration. Thanks,
Just want to make sure we we unpack that clearly and and do your question on your double question honor here. So the the first part of that question, I believe had to do with universal vaccine in any impact on discussions or partnering. I think roxandra did an excellent job addressing that through a different question, just a moment ago. So we don't currently see that as, as an impediment. Um, that's that's something that has been tried for over 35 years and there hasn't been a lot of success at all, scientifically in that direction. And we're excited about, uh, any partnering discussions or any current Partnerships. We currently have with our technology platform and then the, the second part of your question, if you could just condense that, and and restate, so we can get it correctly.
Or what other areas you guys may have interest in going into and then also in your confidence and being able to run those programs based on current projections of uh of Revenue generation from the sansi collaboration. Right? Very good question. Appreciate that. We're we're we're excited about the potential. The potential outcomes of our Explorations in oncology will be looking forward to in the coming quarter. Sharing some initial data coming out of those Explorations and we're very excited about the potential there for our technology. Let me let Jim handle your question about the financial Runway to support our portfolio programs. Jim well certainly and you know maybe reinforcing and this is the reason why I really like this question, it reinforces the thoughtful approach we're using to our business model of finding outside. This company experts who can utilize our technology to drive new areas of of vaccine Innovation where we don't have to do it ourselves. And so in the case of oncology we've recognized,
The importance of the right agent playing a role, right? And and oncology and we don't intend to be an oncology company. We don't, however, we'll generate the right type of data. To encourage, you know, how vast that that Marketplace is to encourage those players to collaborate with us, have access to our technology to advance, what Matrix could could be and the return on that could be exceptional and and so
Um I think you heard today from RX just some preliminary information that that we're learning leaves us to believe we're on the right path and we're looking forward to partnering with others.
Yeah, and today Jim outlined our, you know, once again very clearly our our lean Financial platform that we're building and the continued cost reduction efforts of this organization that we've been under for the last few years and continue to execute upon while while keeping our capabilities in focusing, our investments in the right areas that are supportive of our strategy. And that's inclusive of the investments in our portfolio that we've already shared 4 different programs, plus expert, exploration and oncology plus h5n, 1 discussions, Etc. All of that is inclusive. And as part of that lean Financial platform that Jim outlined clearly here. And if, we've always said, if we do, find a gem coming out of our portfolio, it will be clear that it is 1. And at that time, we may choose to bring that forward, but right now, it's all contemplated as part of the current financials Jim shared.
Great. Thank you.
This concludes our question and answer session. I would like to turn the conference back over to John Jacobs for any closing remarks.
Thank you very much, everyone. We appreciate you joining the call today and look forward to seeing you in the near term.
Have a great day.
This conference is now concluded. Thank you for attending today's presentation. You may now disconnect