NOVAVAX INC Q4 FY2024 earnings call

• Implemented a new corporate growth strategy focusing on R&D innovation, organic portfolio expansion, and partnerships. - Announced a partnership with Sanofi, including $500 million upfront and $70 million equity investment. Sanofi took lead commercial responsibility for the COVID-19 vaccine. - Added four new early-stage programs in areas like C. Diff, varicella-zoster virus, pandemic flu, and triple RSV combination. - Progressed on the COVID-19 BLA with an action date in April, and Phase 3 trials for COVID influenza combination and standalone flu vaccine. - Reduced current liabilities by $1.3 billion over two years and aimed to reduce R&D plus SG&A expenses by 85% by 2027 compared to 2022.

In 2024, Novavax reported total revenue of $682 million. Product sales contributed $190 million, while licensing, royalties, and other revenue accounted for $492 million. For the fourth quarter of 2024, total revenue was $88 million, with product sales of $50 million. Combined R&D and SG&A expenses in the fourth quarter were $183 million, a 43% reduction from the same period in 2023. The sale of the Czech Republic manufacturing facility in December contributed a $52 million gain, improving the fourth quarter financial results.

• Aiming to be profitable as early as 2027, with expected breakeven revenue of approximately $225 million in 2027. - 2025 revenue framework targets adjusted licensing, royalties, and other revenue between $300 million and $350 million, including milestones from COVID-19 BLA approval, marketing authorization transfers, and Sanofi agreement components. - Anticipated midyear data readout from Phase 3 CIC and standalone flu trial, preclinical data from early-stage pipeline programs in the second half of 2025, and an Investor Day in the second half of 2025.

• Uncertainties in regulatory approvals for the COVID-19 BLA and other vaccine candidates. - Dependence on Sanofi's execution of commercial and development plans for achieving milestones and royalties. - Market dynamics affecting vaccine sales and the success of new partnerships. - Risks associated with the progress of early-stage pipeline programs and preclinical evaluations.

Q: For the 2025-2026 COVID season under partnership with Sanofi, how much prep work has been in progress and about the upcoming Phase 3 initial CIC in the flu cohort readout in midyear and what will be considered as a partnerable profile?

A: John Jacobs mentioned excitement about the Sanofi partnership and progress, and Ruxandra Draghia-Akli stated the initial cohort data will provide immunogenicity and safety data to complement existing data, which is key for a potential partner.

Q: In what ways could the official FDA label for the COVID vaccine differ from the current EUA fact sheet and has Sanofi provided Novavax with initial internal estimates for COVID-19 vaccine sales in 2025?

A: John Trizzino said they can't comment on specific FDA interactions but are in positive conversations, and John Jacobs stated Sanofi is not projecting sales publicly.

Q: On plans to partner the CIC and flu for future development and about the new RSV program.

A: John Trizzino said they're looking forward to the data readout on the initial cohort to inform next steps and Ruxandra Draghia-Akli elaborated on the new RSV program leveraging lessons learned and AI capabilities to enhance structural stability and immunogenicity.