Earnings call transcript: Novavax Q2 2025 reports unexpected profit, stock surges

Novavax Inc. (NVAX) surprised investors in its Q2 2025 earnings report by posting a net income of $107 million, or $0.62 per diluted share, against a forecasted loss of $0.06 per share. The company’s revenue reached $239 million, surpassing the forecast of $156.23 million. This unexpected performance led to an 18.17% surge in pre-market trading, as shares rose to $7.17. According to InvestingPro data, Novavax maintains strong profitability metrics with a P/E ratio of 2.26 and impressive revenue growth of 25.92% over the last twelve months. The company’s financial health score stands at "GREAT" with a 3.16 overall rating.

Key Takeaways

• Novavax reported a quarterly profit, beating EPS expectations by a wide margin.
• Revenue exceeded forecasts by nearly 53%, driven by a $175 million milestone payment from Sanofi.
• The company reduced its R&D and SG&A costs significantly, contributing to profitability.
• Novavax’s stock jumped over 18% in pre-market trading following the earnings announcement.

Company Performance

Novavax demonstrated a strong performance in Q2 2025, achieving profitability despite a decrease in total revenue from $415 million in Q2 2024 to $239 million this quarter. The company attributed its financial success to strategic cost reductions and milestone payments from its partner, Sanofi. Novavax’s efforts to streamline operations and focus on core strengths appear to be paying off, as evidenced by its improved financial metrics.

Financial Highlights

• Revenue: $239 million, down from $415 million in Q2 2024
• Earnings per share: $0.62, compared to a forecasted loss of $0.06
• Net income: $107 million
• Cash and receivables: Over $850 million at the end of Q2
• R&D and SG&A expenses: Reduced by 41%

Earnings vs. Forecast

Novavax’s actual EPS of $0.62 significantly beat the forecasted loss of $0.06, marking an EPS surprise of -1133.33%. The revenue of $239 million exceeded expectations by 52.98%, driven by strategic partnerships and milestone achievements. This performance deviates positively from prior quarters, indicating effective cost management and strategic execution.

Market Reaction

Following the earnings release, Novavax’s stock price surged by 18.17% in pre-market trading, reflecting investor optimism about the company’s unexpected profitability. The stock, which had a 52-week range between $5.01 and $15.22, reacted positively to the earnings beat and cost reduction efforts. This movement aligns with broader market enthusiasm for biotech firms achieving profitability.

Outlook & Guidance

Novavax raised its full-year 2025 revenue guidance to between $1.0 billion and $1.05 billion, reflecting confidence in its ongoing partnerships and product pipeline. The company is targeting non-GAAP profitability by 2027 and expects additional milestone payments from Sanofi. Projected R&D and SG&A expenses for 2025 are set between $495 million and $545 million.

Executive Commentary

CEO John Jacobs stated, "We intend to drive long term value creation through our corporate growth strategy," emphasizing the company’s focus on strategic partnerships and innovation. CFO Jim Kelly added, "Our goal is to drive financial performance by reaching and growing non-GAAP profitability," highlighting the company’s commitment to financial discipline and operational efficiency.

Risks and Challenges

• Supply chain disruptions could impact production and delivery timelines.
• Market saturation in the vaccine sector may limit growth opportunities.
• Regulatory changes could affect the approval and distribution of new products.
• Dependence on milestone payments from partners like Sanofi introduces revenue variability.
• Macroeconomic pressures could affect funding and investment in biotech initiatives.

Q&A

During the earnings call, analysts inquired about the post-marketing commitment study for Nuvaxibid and potential impacts of BARDA funding changes. Executives were also questioned about the company’s interest in oncology and other therapeutic areas, with a focus on leveraging their technology platform’s versatility.

Full transcript - Novavax Inc (NVAX) Q2 2025:

Conference Operator: Good morning, and welcome to Novavax Second Quarter twenty twenty five Results and Operational Highlights Conference Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touch tone phone. To withdraw your question, please press star one again.

Please note this event is being recorded. I would now like to turn the conference over to Louis Sinead, Vice President, Investor Relations. Please go ahead.

Louis Sinead, Vice President, Investor Relations, Novavax: Good morning and thank you all for joining us today to discuss our second quarter twenty twenty five financial results and operational highlights. A press release announcing our results is available on our website at novovax.com and an audio archive of this conference call will be available on our website later today. Please turn to slide two. Before we begin with prepared remarks, I need to remind you that this presentation includes forward looking statements including but not limited to statements related to Novavax’s corporate strategy and operating plans, its strategic priorities, its partnerships and expectations with respect to potential royalties, milestones, and cost reimbursements its expectations regarding manufacturing capacity, timing, production, and delivery for its COVID-nineteen vaccine the development of Novavax’s clinical and preclinical product candidates the timing and results of our clinical trials, including the Nevaxivate post marketing commitment study, full year 2025 financial guidance and revenue framework, and Novavax’s future financial or business performance. Each 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 10 ks and subsequent Form 10 Qs 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 three. This presentation also includes references to non GAAP financial measures, which are total adjusted revenue, adjusted licensing, royalties and other revenue, combined R and D and SG and A expenses less partner reimbursements, and non GAAP profitability. 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 growth strategy. Doctor. Ruxandra Draghia, Head of R and D will discuss our R and D updates. And Jim Kelly, Chief Financial Officer and Treasurer will review our financial results and 2025 financial guidance and revenue framework. Sylvia Taylor, Chief Corporate Affairs and Advocacy Officer will be available for the Q and A portion of the call.

I would now like to hand over the call to John.

John Jacobs, President and CEO, Novavax: Thank you, Louis. 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 was a strong quarter as we continue to execute on our strategy access to our proven technology platform by advancing R and 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 remained focused on our three 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 Sanofi. During the quarter we received BLA approval for Nuvaxibid in The U. S, which triggered $175,000,000 milestone payment to Novavax to be received in the third quarter. We also completed the transition of commercial activities to Sanofi in The US.

This means that for the twenty five-twenty six season, Sanofi is now poised to assume the lead commercialization role for Nuvaxibat in select global markets. The Sanofi 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 COVID vaccine. As noted, we earned the $175,000,000 milestone for the BLA. And in addition, we are on track for milestone payments associated with the transfer of The U. S.

And EU marketing authorizations and the technology transfer related to Nuvaxavid manufacturing, which are anticipated later this year and in late twenty twenty six respectively. Beyond the economics related to Nuvaxavid, Novavax is eligible to receive milestones and royalties associated with the development of new combination vaccines that include our COVID vaccine. As a reminder, Sanofi is developing two combination vaccine candidates which include our COVID vaccine and their market leading flu vaccines both of which received Fast Track designation from the FDA last year. We’re encouraged by Sanofi’s recent comments on the potential of COVID flu combo vaccines. Sanofi has access to develop vaccines with our proven and unique Matrix M adjuvant 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 long term value. Our second strategic priority is to enhance our existing partnerships and leverage our technology platform and pipeline to drive additional partnerships. Novavax’s cutting edge tech platform, consisting of our protein based nanoparticles and our one of a kind Matrix M adjuvant, 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, Nuvaxavid and the R21 Matrix M malaria vaccine, our growing clinical dataset, and our current partnerships. Let’s talk about those current partnerships.

This quarter we optimized our partnership with Takeda for the Japanese market through an updated collaboration and exclusive license agreement, which significantly improved 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, and we believe our continued partnership will help

Conference Operator: to meet the needs of

John Jacobs, President and CEO, Novavax: the COVID market in Japan. Takeda filed for approval of Nuvaxavir 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 endemic regions since its first administration in Ivory Coast in June 2024. The R21 Matrix M vaccine is helping to expand access to lifesaving prevention in communities with limited healthcare infrastructure with rollouts in 12 African countries as of April 2025. In fact, over 20,000,000 doses have been sold to date since launch in mid-twenty four.

Malaria historically has killed over six hundred thousand people annually, with the vast majority of deaths occurring in children under five 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 and Takeda 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 $75,000,000,000 by 02/1930.

This quarter we continued to advance strategic opportunities for our Matrix M adjuvant. Our unique M adjuvant 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 three pharmaceutical companies to explore 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 three cohort showing our COVID-nineteen influenza combination or KIC and standalone flu vaccine candidates elicited strong immune responses similar to licensed comparators in vaccinated and Fluzone High Dose with over ninety eight percent 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 this program in a few moments. And finally, our third strategic priority is to advance our technology platform and early stage pipeline. We’re advancing a focused pipeline of vaccine candidates targeting unmet needs in infectious disease, and we are exploring the utility of Matrix M in 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 out license and or partner vaccine assets we are developing in our pipeline. But if we discover a significant opportunity via those R and D efforts, we may decide to bring that asset forward on our own if the value proposition indicates it is best to keep that asset with Novavax.

As you can see, this quarter we continued 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 and D updates. Roxandra?

Ruxandra Draghia, Head of R&D, Novavax: Thank you, John. Please turn to slide seven. Since the last earnings update, we progressed our programs, and I’m excited to share several important developments, starting with new insights from our kit and standalone flu program, followed by promising new data from our H5N1 program. We’ve also made strong progress across our preclinical pipeline, including our RSV combination, C. Difficile, and VZD programs.

Please turn to slide eight. I’ll 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 COVID, we look for differentiated attributes such as breadth of protection against drifted 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 T cell responses, which showed that in both the standalone flu and kick arms increases from baseline in influenza specific polyfunctionally expressing CD4 positive T cells were numerically higher than in the comparator Fluzone high dose arm. This is notable as T cells recognize conserved 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 COVID specific responses were similar between KIC and Navoxavir arms. While this immunogenicity and safety trial was not a pivotal trial, the data can inform a future registrational Phase three program.

We intend to partner both candidates to conduct registrational trials and as John already mentioned, partnering discussions are underway. Please turn to slide nine. In July, we published new preclinical data in later communications demonstrating that our H5N1 avian influenza vaccine candidate built on our recombinant protein based platform and matrix M adjuvant generated robust immune responses after a single or two dose intranasal or intramuscular administration in prime nonhuman primates. This indicates that we may be able to offer flexible options for consumers. For example, intranasal administration could lower viral loads and potentially result in decreased transmission.

In addition, unlike vaccines which might require two or more doses for full protection, the possibility to administer a single vaccine dose is important in the context of a pandemic. These findings reinforce once again the strength of our technology platform and highlight the potential of our pandemic influenza program. Please turn to slide 10. On the preclinical side, our RSV combination C. Difficile and VZV zoster programs have continued their rapid journey towards development of compelling, differentiated, and commercially attractive next generation vaccines.

These assessments are executed in carefully thought out in silico, in vitro, and animal models that will address dosing regimens and criteria for our predefined target product profiles. Our goal is to rapidly position the programs for the clinic. For the CDC seal 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. One

Conference Operator: of

Ruxandra Draghia, Head of R&D, Novavax: the main challenges for C. Difficile is that vaccines are not cross protecting against various bacterial ribotypes. Protection against C. Difficile and its complication remains a large unmet medical need with no C. Diff vaccine available today.

For the RSV combination, we are incorporating important lessons learned from our first generation RSV clinical program and our KIC program into a second generation antigen design. Our technology platform facilitates combination vaccines development, and this matters as consumers have indicated a preference for combination vaccines. For shingles prevention, we continue to generate key differentiation data in preclinical models with a goal of showing similar efficacy with existing vaccines while demonstrating lower reactogenicity. This comes from the observation that at risk adults are declining shingles 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 preclinical programs, we also continue to innovate with our technology. We have strategically added to our translational medicine and adjuvant teams to ensure we have the right technological capabilities to continue to build out our next generation of R and D using our existing preclinical programs as a test bed. There will be more to share in the coming months, but two main highlights are number one, use of generative AI methods to inform antigen construct design tethered 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 adjuvant 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. I’ll now turn the call to Jim.

Jim Kelly, Chief Financial Officer and Treasurer, Novavax: Thank you, Roxandra. Please turn to slide 11. This morning we announced our financial results for the 2025. Details of our results can be found in our press release issued today and in our Form 10 Q filed with the SEC. Please turn to slide 12.

I’ll begin with key highlights from our second quarter twenty twenty five financial results. Novavax reported total revenue of $239,000,000 as compared to $415,000,000 in the 2024. Total revenue included $175,000,000 milestone earned from Sanofi related to the May 2025 FDA approval of our Nivaxavib BLA in The US. We expect cash receipt of the 175,000,000 milestone in the 2025. During the 2025, we continued to transform Novavax into a more lean and agile organization.

Evidence this quarter includes the 41% reduction in our combined R and D and SG and A costs compared to the same period last year. End of note, we reduced SG and A by 57% as we transferred lead commercial activities to Sanofi 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 study. Importantly, we do not anticipate the cost of the study to have an impact on our 2025 and 2026 operating profit profile, as Sanofi reimbursement is expected to cover the incremental study cost added to our plan. We ended the second quarter with over $850,000,000 in cash and receivables, including the 175,000,000 milestone payment from Sanofi.

In addition, we anticipate earning an additional 50,000,000 in milestones from Sanofi in the 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 two 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 2025, we recorded total revenue of $239,000,000 compared to $415,000,000 in the same period in 2024.

Product sales for the 2025 of 11,000,000 consisted of 13,000,000 from supply sales and negative $2,000,000 Nivaxavib product sales from the closeout of our US market activities and related return reserves. Our second quarter supply sales were primarily from adjuvant sales to our license partners. We are encouraged by the increased demand for MATRIC M, as this enables the company to better reach manufacturing economies of scales and aids the improvement of our margins. Of note, year to date sales of the R21 Matrix M malaria vaccine of fourteen million doses already exceeds the 6,000,000 doses sold for the full year 2024 and highlights the steady progress being made by our partner, the Serum Institute with the launch. We recorded $229,000,000 of licensing royalties and other revenue in the second quarter, consisting of $199,000,000 and $27,000,000 related to our Sanofi and Takeda 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 twenty twenty five combined R and D and SG and A expenses were 123,000,000 and reflect a 41 percent and 85,000,000 reduction from the same period in 2024. Importantly, our SG and A expenses were 57% lower than the same period last year and are driven by the transition of the lead global commercial activities to Sanofi, plus strong execution of our broader cost reduction plan. Research and development expenses of 79,000,000 in the 2025 were primarily driven by our investment in the kick flu study and support of Sanofi for the upcoming COVID-nineteen vaccine season. A smaller portion of this spend is presently directed towards our early stage preclinical programs.

Finally, we reported net income of $107,000,000 or 62¢ per diluted share for the 2025. Please turn to slide 15. In May 2025, Nivaxibed received US 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 sharing that this update is not anticipated to have an impact on our 2025 and 2026 operating profit profile, as Sanofi 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 90,000,000. Novavax will conduct this study on behalf of Sanofi, and Novavax will be reimbursed 70% of total cost or approximately 55,000,000 midpoint of that range. In the table below, we outline both the specific updates we are making to our revenue framework and financial guidance and introduce a new metric where we show our combined R and D and SG and 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 to slide 16.

We are committed to streamlining our operations to enable value creation. Our updated full year 2025 financial guidance for combined R and D and SG and A expenses is now $495,000,000 to $545,000,000 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 and D and SG and A expenses net of partner reimbursements of $350,000,000 and $250,000,000 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 and D to drive value creation.

Please turn to slide 17. Now turning to our 2025 revenue framework. Today, we are raising our prior revenue framework and now expect to achieve adjusted total revenue of between 1,000,000,000 and $1,050,000,000 Our 2025 revenue framework excludes Sanofi supply sales, royalties, influenza COVID combination, and Matrix M related milestones. This means there may be revenue in 2025 that is additive to our expectations for adjusted total revenue for the year. At midpoint, the $25,000,000 increase to our 2025 adjusted total revenue is driven by a $5,000,000 increase to adjusted supply sales related to increased demand for Matrix M from serum for the R21 Matrix M malaria vaccine, and a 20,000,000 increase to adjusted licensing royalties and other revenue that has three components and includes a $20,000,000 increase to Sanofi cost reimbursement related to the PMC study, a $10,000,000 increase to other partner revenue from Takeda based on milestones and royalties under that agreement, and a $10,000,000 decrease to amortization related to the Sanofi upfront payment and pediatric milestone that we now expect to recognize in 2026.

Our year to date 2025 sales of $9.00 $6,000,000 leaves $119,000,000 to be recognized in the 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.

John Jacobs, President and CEO, Novavax: Thank you, Jim. In summary, we intend to drive long term value creation through our corporate growth strategy and continue to focus on our three strategic priorities. First, executing on our Sanofi 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 and 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 and A. Operator?

Conference Operator: Thank you. We will now begin the question and answer session.

Roger, Analyst: Great. Congrats for all the progress, and thanks for the update and taking our questions. Two from us. One is in terms of the twenty twenty five, twenty twenty six COVID season supply, given you will continue to use GEN-one, would you still file for approval for this season for your vaccine? And then when the supply will be ready for the fall this season?

And then also second question related to the kick and flu partnership discussion, any additional comments regarding the interest level, the progress, and then how should we think about the timeline you will be able to sign a partner to move forward into the pivotal? Thank you.

John Jacobs, President and CEO, Novavax: Jim, you want to take Roger’s first question?

Jim Kelly, Chief Financial Officer and Treasurer, Novavax: Certainly. Good morning, Roger. You know, with respect to the regulatory filings for readiness for our COVID vaccine for the fall season, you’re right that we had a BLA approval for JM1, which is our intent to deliver that vaccine JM1 this fall. We also, however, in parallel are working to improve the shelf life profile of our vaccine for fall to a more competitive profile, the expectation being six months at least. And therefore, the regulatory filings we’re doing right now for readiness for the fall are really focused on that improvement in shelf life profile and stability.

Then I believe your next question related to the combination vaccine potential partnering. Can you just restate one more time?

Roger, Analyst: Yeah, sure. So for the just any comments around the interest level, the progress of the discussion, and then what’s the timeline we should looking at or expecting for the partnership to move forward?

John Jacobs, President and CEO, Novavax: 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 Sanofi.

If you take a look at their statements in their recent earnings discussions, they speak very positively about the potential of combination assets in COVID flu moving forward in the future. Both of the assets they’re developing with our new Vaxivit receive Fast Track designation from FDA. And we’re very excited about the potential of that future. Rux, did you want to add anything else on Roger’s question regarding combination?

Ruxandra Draghia, Head of R&D, Novavax: So, the only thing that I would like to add is, as you might remember, this was the first cohort from the trial where we were assessing the immunogenicity and obviously adding to the safety database. 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. The registrational trial would be undertaken by that potential partner when that partnership would occur.

Roger, Analyst: Got it. Thank you.

Conference Operator: We’ll move next to Mayank Mamtani at B. Riley Securities.

Mayank Mamtani, Analyst, B. Riley Securities: Yes. Good morning, team. Thanks for taking our questions, and congrats on the progress. Maybe Thanks, just following up on the yeah, thank you, Ja. Following up on the prior comment about the new data that was presented regarding the CD4 T cell superiority versus Fluzone high dose, including for both KIC and NIV and H1N1 and H3N2.

Just curious, Rux, would you expect a relatively comparable dataset being generated in the Sanofi study? And also wonder how important is the B strain specific immunogenicity, you know, in context of understanding the profile of standalone flu and cake when you also obviously talk about what additional strategics are looking for? And then I have a quick follow-up.

John Jacobs, President and CEO, Novavax: Brooks, do want to comment on Mayank’s question?

Ruxandra Draghia, Head of R&D, Novavax: Yes. So, we cannot comment on Sanofi’s progress. Obviously, we are not purview to their data, and we can actually just relate our data from our experiments from this first cohort as I was mentioning, it was very encouraging to see that these CD4 positive T cells, polyfunctional, were actually comparing very favorable, both in the case of T and IV and the KIG with a comparator, which is Fluzone high dose. As far as the specific strains, again, that is a little bit speculative because every year, as we know very well in the case of influenza, you have different strains that are circulating, and the data that we have today is indicative of the direction of travel. How each and every one of the strains is going to behave in a particular season is actually to be seen and assessed.

John Jacobs, President and CEO, Novavax: But we’re encouraged by We the are encouraged by the data and we’ll keep driving forward with it.

Mayank Mamtani, Analyst, B. Riley Securities: Great. And my follow-up was around the three MTAs that you talked about. It seems that you know, this is growing over time. Could just touch on how process goes to, you know, specific deliverables that kind of lead to a financial transaction? And do you have an understanding of what the new evolved BARDA framework is as they consider, you know, newer platforms to diversify for things like pandemic preparedness?

Thanks again for taking our questions.

John Jacobs, President and CEO, Novavax: Mike, I want to make sure I fully understand your question. So I think it was two questions in one or two parts to your question. If I understand you correctly, the first part, you’re asking about the process from MTAs migrating into a financial transaction. Is that the first part of your question? Yeah.

Mayank Mamtani, Analyst, B. Riley Securities: So, that’s more industry specific. And then, I guess the second part to the broader question is that, you know, the BARDA framework is evolving also as it look at, you know, at different platforms beyond mRNAs. I was just curious how maybe that progress, if any, is ongoing?

John Jacobs, President and CEO, Novavax: All right, Mike. So, to take the first question, obviously, there’s 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. 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 a potential deal for that or a license deal, etcetera. So that’s why we’re happy to get those MTAs signed because we believe in our technology, we’ve done experiments internally in our own lab with multiple vaccines that either exist 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. Then if they’re doing experiments on their own and proving 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 BARDA, so let me just pass that over to Sylvia Taylor, and then we may have Roxandra add to that as well.

Go ahead, Sylvia.

Sylvia Taylor, Chief Corporate Affairs and Advocacy Officer, Novavax: Hey, Mayank. Thanks so much for the question. You know, certainly there is a lot right now that is evolving in the policy landscape. And, you know, I think as it relates to BARDA, look, we’re excited about the asset that we have. We are excited about the data that Roxandra talked about for our pandemic influenza asset.

We continue to work with BARDA on potential funding. You know, really can’t comment too much about what they’re looking at in terms of other technology platforms. But, you know, we always talk about the importance of having our technology option available, 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.

John Jacobs, President and CEO, Novavax: Yeah, there was news today about contracts getting canceled, Sylvia, right? So maybe that’s related to your question, Mayank, but we believe there’s still interest, both from the Europeans and The US authorities, in exploring potential with Novavax and our technology for pandemic preparedness. Rox, did you want to add a thought to that before we move on?

Ruxandra Draghia, Head of R&D, Novavax: So, thank you, Don. The only thing that I wanted to add is, as we have seen in the past, in every single one of the applications, both for infectious diseases generally speaking and for these emerging and pandemic threats, there are a multitude of platforms that can be used to develop safe and efficacious vaccines. We happen to have one of them, which is a protein based platform with a matrix M adjuvant. And our work that has been just recently published as I’ve mentioned in nature communication has shown that that is a viable alternative at least for the moment in nonhuman primates. Obviously, the work has to be continued in order to, you know, give data that is relevant for 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.

John Jacobs, President and CEO, Novavax: Very helpful, Sylvia and Rox. Thank you. Thank you, Mike.

Conference Operator: We’ll go next to Chris Lobianco at TD Securities.

Chris Lobianco, Analyst, TD Securities: Oh, thank you for taking our questions. First, what is your level of confidence in positive efficacy data from the post marketing Phase four trial? And is there an interim analysis? And second, bigger picture question, is the company evaluating or open to acquiring or in licensing clinical stage candidates? The company has a great platform, but it also has a highly experienced team and strong cash outlook, which could be a value add for accelerating the development of external clinical stage candidates.

Thank you.

John Jacobs, President and CEO, Novavax: Could you repeat the first part of your question please, Chris?

Chris Lobianco, Analyst, TD Securities: Are you open to acquiring or in licensing clinical stage candidates?

John Jacobs, President and CEO, Novavax: Yeah, 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 first and foremost Sanofi, but also Takeda 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 in very early stage. And we’re also exploring beyond infectious disease and seasonal respiratory viral vaccines, we’re exploring the potential of Matrix M in 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?

Jim Kelly, Chief Financial Officer and Treasurer, Novavax: Certainly, thank you John. So, Chris, one 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 differentiated 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 focused on ensuring folks understand what Matrix M can do to either develop new vaccines or perhaps even improve upon existing. You saw earlier in our remarks, we see an industry that last year vaccines was over 57,000,000,000. That McKinsey study notes it’s gonna grow over 75 and even beyond.

We have a platform that has utility across multiple modalities. And we believe we’ve got the ability to really be a driver of growth in this industry. And that’s where we’re focused.

John Jacobs, President and CEO, Novavax: Yeah, Jim, well said. And Chris, that’s a great question. 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, 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. We’ll

Conference Operator: go next to Alex Sternihan at Bank of America.

Alex Sternihan, Analyst, Bank of America: Hey, guys. Thanks for the questions. Two from us. First, on the PMC, appreciate the color Jim provided on the cost reimbursement. I guess what information can you share on the design, the size, the timing of the requested PMC?

And second, how does, you know, the shifting winds at the FDA with RFK pulling mRNA vaccine funding maybe provide a tailwind for you guys with potential partners? Thanks.

John Jacobs, President and CEO, Novavax: Rux, did you want to provide just a brief bit of color on the size, scope, scale of the PMC?

Ruxandra Draghia, Head of R&D, Novavax: Yeah. Thank you, John. So, as you know, and as we have previously discussed, this is a post marketing commitment. So, basically a study that occurs after the marketing authorization that could provide additional insight in a specific age population and looking at very clear endpoints. We do work towards starting the study as fast as possible and generating that data per the agreement with the regulatory agency.

So, we hope to start the study as soon as at the end of this year. And obviously generate the data in the next quarters thereafter.

John Jacobs, President and CEO, Novavax: And, Alec, you can see the estimated cost is $70 to $90,000,000 So, that probably tells you a lot about the scope and scale and whatever type of burden that may be. Post marketing commitments are not uncommon and this is something we can handle and I think Jim put it in good perspective. Jim, anything to add on that?

Jim Kelly, Chief Financial Officer and Treasurer, Novavax: Just that we’ll continue to support Sanofi and all of our partners to advance their interest. As you’re seeing in this case, Sanofi is picking up the vast majority of expenses as we keep the momentum, right, in the vaccine advancing in the marketplace.

John Jacobs, President and CEO, Novavax: And Alex, your second question was about a tailwind, right? Found that very interesting. You know, when you see the news today about some grant funding being pulled from mRNAs by the current administration. But what we are encouraged by actually is what we’ve seen is the continued investment in vaccines by peer companies and by large companies. You’ve seen a recent acquisition of a vaccine platform by Sanofi, a partner that we have here at Novavax.

You’ve seen investment being made with our partner Sanofi in their combination vaccines, both of which were fast tracked. You see other companies investing in vaccine platform and technologies. You see a company like Pfizer in their earnings call mention vaccines as a top three 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 for their bottom line are continuing to make those investments. So we see that from ourselves, excited about the future.

Our peers seem steady and excited about the future. And, Asylvia, you may want to comment on any potential tailwind based on the news today.

Sylvia Taylor, Chief Corporate Affairs and Advocacy Officer, Novavax: Yeah, John, I mean, totally agree with what you said. I think, you know, when you’re talking about vaccines, you’re talking about different platforms. And I think, you know, certainly there have been a lot of questions, as we saw about the, you know, the news that John mentioned yesterday in terms of BARDA pulling funding for mRNA. You know, we think that there’s potential impact for us and of course for our partner Sanofi in a couple of areas. I mean, one I think is development of pandemic influenza candidates.

We’ve already talked about the fact that we have an asset. We’re working with BARDA to explore the potential for funding. And there is the potential opportunity for us, particularly since platforms may be taken out of consideration in that. And then I think the other thing is seasonal execution and what it could mean for the market going forward. Certainly, I think right now there is a lot of support for an alternative technology platform, for protein based technology platform.

And, you know, we’re excited to partner with Sanofi as they take the lead commercialization role and execute in this environment.

John Jacobs, President and CEO, Novavax: Thank you, Alex.

Alex Sternihan, Analyst, Bank of America: Thank you.

Conference Operator: We’ll go next to Tom Schrader at BTIG.

Alex Sternihan, Analyst, Bank of America: Good morning. Thanks for all the detail. The profitability comment for 2027, does that assume worldwide COVID vaccine use is about flat? And then a remedial one for Roxandra. All your talk about, more robust flu responses, do multi year flu vaccines make sense ever?

I mean, or does the strain essentially always drift too much to make a vaccine that lasted two years valuable? Thank you.

John Jacobs, President and CEO, Novavax: Jim, you want to take the first question?

Jim Kelly, Chief Financial Officer and Treasurer, Novavax: All right, certainly. And appreciate the question. 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 the financial strength with at least a year and a half to two years or more of cash on hand. What you’re seeing is we are 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 partners. We see multiple paths to profitability. And I’ll just give you a couple of examples that I emphasized a little bit earlier this year. Our non GAAP profitability profile, and I’m gonna start with the breakeven and our expense profile target for 2027. We’ve told you R and D and SG and A of 250,000,000.

And just to simplify math, imagine the cash OpEx there is about two and a quarter, 200 to two and a quarter. The ability to get to breakeven, therefore, would be in the case of a COVID vaccine. So think about our royalty rate on Sanofi that’s approximately 20% at around the midpoint. We’ve given you a range high teens to low twenties. That would mean to be breakeven.

So if you would be selling a billion or more of the COVID vaccine, in a market that is 8 to 9,000,000,000, you get a sense of the market share required, right? Somewhere in the teens. Then another alternative, advancing the flu and kick combination by Sanofi, the approval launch milestone itself is $225,000,000 and would meet the objective on its own of getting us to break even just there with royalties and of course growing revenues on the back end of that launch. And that’s me yet to even address other new 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.

John Jacobs, President and CEO, Novavax: Thank you Jim. Roxander, did you want to take the second question from Tom about a flu vaccine, a multi year flu vaccine? Thank you.

Ruxandra Draghia, Head of R&D, Novavax: Well, it’s implied from your question. The 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 thirty five years for these more universal vaccines. For the moment that those efforts have not been brought to fruition, I would say. The data that we are generating is actually showing that our vaccine can offer a little bit broader immune protection.

So, slightly hetero subtypes might be in the scope of that protection. And also the T cell data that we have generated, it’s showing that we can probably confer a little bit of more durability of protection. But we need to look at the durability of protection or that heteroseptotic protection in the context. You know, the current vaccines might protect for a season. A season it means a few months.

What if we can actually protect for six months or for twelve months? It would already be an advancement versus the current state of science. That we will be able to confer protection for two years or three 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.

Alex Sternihan, Analyst, Bank of America: Great. Thanks for all the color.

Conference Operator: And we’ll go next to Jeff Meacham at Citi.

Louis Sinead, Vice President, Investor Relations, Novavax0: Hey, good morning, guys. This is Jarvi on for Jeff. Thanks for taking the question. As part of RKJ’s comments yesterday about BARDA and the situation in the framework, definitely the comments on mRNA could be perceived as a tailwind for you guys. But among his comments, he also noted the desire for a universal vaccine rather than antigenic specific vaccines.

Based on that, how do you think that might impact discussions going forward for interest for your flu and kick vaccine for partners? And then a second question for us is you guys have noted interest in going in oncology and additional plans beyond respiratory vaccines, given the importance of that beyond respiratory revenues. How do you think you guys might be able to fund those programs de novo on current expectations of cash generation from the FANSI collaboration? Thanks.

John Jacobs, President and CEO, Novavax: Just want to make sure we unpack that clearly and do your question on your double question on or here. So the first part of that question I believe had to do with universal vaccine and 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 an impediment. That’s something that has been tried for over thirty five years and there hasn’t been a lot of success at all scientifically in that direction.

And we’re excited about any partnering discussions or any current partnerships we currently have with our technology platform. And then the second part of your question, if you could just condense that and restate so we can get it correctly.

Louis Sinead, Vice President, Investor Relations, Novavax0: Sure, of course. Yeah, just the interest in going to oncology, if you could give us more details on that and plans for what other areas you guys may have interest in going into. And then also in your confidence in being able to run those programs based on current projections of revenue generation from the SAMHSA collaboration.

John Jacobs, President and CEO, Novavax: Right, very good question. Appreciate that. We’re excited about the potential outcomes of our explorations in oncology. We’ll be looking forward to in the coming quarters 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?

Jim Kelly, Chief Financial Officer and Treasurer, Novavax: Certainly. And 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 vaccine innovation where we don’t have to do it ourselves. And so, the case of oncology, we’ve recognized the importance of the right adjuvant playing a role, right, in 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 marketplace is. To encourage those players to collaborate with us. Have access to our technology to advance what Matrix could be. And the return on that could be exceptional. And so I think you heard today from Rux, just some preliminary information that we’re learning leads us to believe we’re on the right path and we’re looking forward to partnering with others.

John Jacobs, President and CEO, Novavax: Yeah, and today Jim outlined our, you know, again very clearly 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 keeping our capabilities and 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. Four different programs plus exploration in oncology, plus H5N1 discussions, etcetera. All of that is inclusive and is part of that lean financial platform that Jim outlined clearly here. And we’ve always said if we do find a gem coming out of our portfolio, it will be clear that it is one 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.

Louis Sinead, Vice President, Investor Relations, Novavax0: Great, thank you.

Conference Operator: This concludes our question and answer session. I would like to turn the conference back over to John Jacobs for any closing remarks.

John Jacobs, President and CEO, Novavax: 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.

Conference Operator: This conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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