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Novavax, Inc. (NASDAQ:NVAX), a biotechnology company with a market capitalization of $1.24 billion, announced Wednesday it has completed privately negotiated exchange and subscription transactions, issuing $225 million in aggregate principal amount of 4.625% Convertible Senior Notes due 2031. According to InvestingPro data, the company maintains a strong liquidity position with a current ratio of 2.36, indicating its ability to meet short-term obligations. The announcement was made in a statement based on a filing with the Securities and Exchange Commission.
Of the total, approximately $175.3 million principal amount of the new notes were issued in exchange for about $148.7 million principal of Novavax’s existing 5.00% Convertible Senior Notes due 2027. The remaining $49.7 million principal amount of notes were issued for cash. The transactions were conducted under exemptions from registration under the Securities Act of 1933.
The new notes are senior, unsecured obligations of Novavax and accrue interest at 4.625% per year, payable semi-annually starting March 1, 2026. The notes mature on September 1, 2031, unless repurchased, redeemed, or converted earlier. Before June 1, 2031, conversion is permitted only upon certain events; after that date, holders may convert at any time until two business days before maturity.
Novavax may settle conversions in cash, shares of its common stock, or a combination, at its discretion. The initial conversion rate is 89.7384 shares per $1,000 principal, equating to an initial conversion price of about $11.14 per share—a 27.5% premium over Novavax’s last reported sale price of $8.74 per share on August 20, 2025. Based on this rate, 20,191,140 shares would be issuable upon conversion, with a maximum of 25,743,690 shares possible under certain circumstances.
The notes are redeemable for cash at Novavax’s option on or after September 5, 2028, if the stock price exceeds 130% of the conversion price for a specified period. Holders may require Novavax to repurchase notes in the event of certain fundamental changes, such as business combinations or delisting events, at 100% of the principal plus accrued interest.
The notes contain customary default provisions and reporting requirements, as detailed in the indenture filed with the SEC. Currently trading at $7.58, Novavax’s stock appears undervalued according to InvestingPro Fair Value analysis. The stock has shown significant volatility, with a 52-week range of $5.01 to $15.22, making it crucial for investors to conduct thorough due diligence. Detailed valuation metrics and extensive financial analysis are available in InvestingPro’s exclusive research report, part of their coverage of over 1,400 US stocks.
In other recent news, Novavax, Inc. reported a surprising net income of $107 million for Q2 2025, or $0.62 per diluted share, defying analysts’ expectations of a $0.06 per share loss. The company’s revenue also exceeded forecasts, reaching $239 million compared to the anticipated $156.23 million. Additionally, Novavax announced a refinancing move involving $225 million in convertible senior notes due in 2031. This transaction includes $175.3 million in notes exchanged for existing ones due in 2027 and $49.7 million in new notes sold for cash. The 4.625% convertible notes have an initial conversion price set at $11.14 per share. Meanwhile, the U.S. Food and Drug Administration approved updated Covid-19 vaccines targeting JN.1 variant strains, but with restricted eligibility. These vaccines are primarily available for people 65 and older and those with underlying health conditions, while others over 6 months old require a doctor’s approval. These developments mark significant updates for Novavax and the broader healthcare landscape.
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