Novavax (NVAX) 9 May 232023 Q1 Earnings call transcript

Good morning, and welcome to Novavax First Quarter 2023 Financial Results and Operational Highlights Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Erika Schultz, Senior Director, Investor Relations. ahead. go Please

available thank will discuss and financial for us later of is joining A and at Good audio today. available an first you on quarter to archive currently results our our release conference and our XXXX today website press novavax.com, call afternoon, this announcing all on be operational results. website highlights our

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to need or relating in to traditional forward-looking product future we the remind strategies, that future Before expenses, or including remarks, begin commercial its cost vaccine candidates, includes information performance, selection, prepared results, this global multiple operating timing and the our demand advancing future regulatory efficacy, variants and of reductions our the candidates, and manufacturing ongoing availability Novavax, actions, and statements, and trials as against transitioning and and of restructuring revenue including commercial of filings I our including priorities, vaccine plans, the financial and the global key strain COVID our vaccine milestones. market safety to with strain, vaccine the outcome future timing opportunities capacity, utilization intended presentation business strategic prospects. future you our reduction key objective model, of of projections conditions initiative, on and including candidates, goals, key of development and variants, upcoming for candidates our trends, including scope, anticipating Its

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

XX-Q with SEC. forward subsequent and under deck on with the most the and and as heading appears factors, under Commission we well form and subsequent those regarding Exchange Securities issued regarding the information the www.novavax.com in heading form as filings available@www.sec.gov afternoon, and factors slide XX-K website cautionary recent and risk our filed our the at this statements Additional looking note

forward original obligation speak presentation presentation. as only the any undertake statements The update no of statements. looking to revise this of of we date or in this And these

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Chief Joining discuss today Jacob, Chief CEO, activities. development Dr. is who a Business three an provide the and Research and and for Officer, our John update our our John will progress and me strategy on Filip President officer our various on clinical of Trizzino, Development pipeline, Commercial Dubovsky, quarter will will priorities. provide and key President an commercial during and update

today's an Finally, of Officer and of Chief end provide will Q&A Chief results. Financial will section Officer the at Jim Rick overview the also be financial Treasurer Crowley, for available Kelly, our Operations call.

call over now would the like I slide hand Please Jacob. to John turn to to five.

and quarter for everyone, you, our today Thank results joining us you, Erika, thank highlights. operational XXXX discuss financial and to first

our first combination be flu results measures an costs have because look taken forward II for and some to especially to call also quarter top our addition reduce will our results, today, Phase line significant we have We to discussing our in COVID and we encouraging organization, restructure we program. sharing eventful

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technology managing our structure, our scale of and and driving our value upcoming spend, the season, reducing and rate a fall additional and finally, portfolio. evolving from delivering First, for flow competitive cash product second, our platform

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talk with discussions For the season. the to major John our the the we This and are US make fall the significant our available negotiations across be build-out and channels distribution through of to Chief upcoming team ahead vaccine our in progress will first Officer season. for purchasing preparing our customers includes ongoing market Trizzino, evolve a commercial about which will how Commercial mode, US, commercial

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progress of positively by the about this updated health encouraged are global we have potential We vaccine to this year. excited our and impact area, their in

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on scale we Today, is move restructuring two, initiative, expenses, results number which announced our are help to cost and rate reduce that our will to drive future. we of structure. global now manage need priority spend, we our and retaining and while and to reduce implementing evolve which the build in reduction a cash flow, capabilities Let's significantly our value the

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end, addition current our our In this liabilities. addressing reducing reducing made To to aggressively since significant progress and are significantly we've report scale, expense scope, significant base to are interaction, liabilities. that our these one-time we pleased R&D in SG&A, we in and last

hear more Jim restructuring, Kelly, cash our today will the management, later our cost about our in You and CFO, call. flow from

alone. and to to which drive discuss platform, additional beyond And Nuvaxovid leverage capabilities, our three, technology priority portfolio assets our our is of finally, value let's

continue Matrix-M our pipeline including to platform, value from explore and strategies technology unlock our our We to opportunities adjuvant. additional and

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through expect Depending collaborations platform advance technology our to positive full value and/or to health. set, the over months, we options base example science of further we our strategic global the are on evaluate the program this the of outcome which financing to coming These other another to alternatives. of potential and receive contribute our public will results

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to to it on provide Terzino an update Trizzino that, John With activities. commercial I'll hand over our

to Filip. turn XX Thanks, and Slide then Please XX. Slide

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across and our through we retail all provide This CDC, doctors' public vaccine major and COVID with and the the programs coordinating country educating vaccines VA distributors pharmacists and integrated US participation this ongoing health various the engagement are our networks with with includes season. physician-buying national providers pharmacies groups in about nationwide programs to offices government VFC delivery discussions finalizing healthcare

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the doses deliver of million APA EU XXXX. to the committed in XX in expect under We remaining doses our

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all across the critical priority which policymaking broad our during for share Nuvaxovid, Importantly, season. be advance fall recommendations markets, engaged access will policy we and market bodies capturing with market upcoming to are to enabling

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working an vaccine. we asked is care towards recommendation Market demand for research their in a fall that the This U.S. indicated policy us for approximately COVID tells there unrestricted to the preference season. When us share our tells they us XX% providers there preference, vaccine. is share for for as we market non-mRNA a available an significant are health that

outlined with our strain commercial position an competitive the regulatory COVID guidance market customers our needs as we and coming remain will in selection the fall stream season. to portfolio for In and is ensure And of of aligned variance on vaccines. we as we dialogue seek stakeholders, our today, Filip months, ahead vaccine ongoing the advanced with development

Kelly discuss With it over hand Jim to I'll financial results. that, our to

quarter Details Thank morning, first our to today issued XX. results our you, press of quarter John. turn Then Please more financial begin This I'll overview management. regarding XXXX. our of of our be by our global provide an to and can XXXX announced our I'll and and cost-reduction found providing liability initiative we today. results details in Slide results filing. for progress on the the release XX-Q date restructuring first announced

Finally, I will guidance year XXXX. full the share financial for

to Slide XX. Please turn

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to slide Please turn XX.

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to turn XX. Please slide

full Nuvaxovid. of between achieve billion total expect combination $X.X XXXX, of grant revenue and year billion the a For we revenue sales from in product to $X.X and

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in you XX-Q In have we disclosure, an we update XX-K that going February. concern which our on filing, will our provided first our provided filing in see

related pending uncertainty significant government to be continues forecast arbitration. XX to to and from US the the revenue this that next months for Specifically, subject funding

for the turn With that to remarks. some like said, to call closing back I'd John

about XX. our I've seen you, slide to Please I've months public passion in mission deliver innovative global vaccines more advance to company to underscore turn that organization and as our to a our recent Thank Jim. learned and across like health. our that I'd improve people

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As confident our of over success positioning goal in and positive that Novavax our XXXX delivering steps to we're key priorities, and on taking stakeholders and we're the the results with for strategy right for the we execute continue long-term.

And we now questions. with will that, take your

Thank you.

We begin question-and-answer [Operator comes will now from Instructions] with Song Our Please ahead. go the question first Jefferies. session. Roger

and taking you. us. questions. for Thanks Thank our couple the from A update

the the breakdown I get deal just First the guidance they related are can comments given wonder, in recent some APA you additional one And is proposed your million, this confident competitor? have -- some revenue provide within in of guidance, $XXX the ex-US how regarding the million APA. revenue this terms this to since $XXX about EU with you APA. maybe delivered said part curious, your remaining you be in -- and you in renegotiation, are the XXXX lot. for of to color additional question doing the APA geography, last around Last provide -- what's $X.X total you some just a last is since billion portion have to Thanks related the left quarter, timing, you XXXX?

Thank one? like you you, take Roger. that Appreciate Trizzino, the would question. John to

Roger. a There's couple Hey Sure. question. to components your of

them to try me out. parse Let

kind that original to and billion of to expect the still still in we First those date that value contracts value. of adherence and of true all have is the a confidence all, $X.X

of 'XX, for of committed to quarters this the in $XXX orders, going going -- to be of and 'XX that's million. confident so balance that into during to Now, year, allocated 'XX in fall are is orders, shipped the locked various be some $XXX the million

but have period. the go that's staff private not with market to generation future, vaccine Director details there settlement determined the that already possible are vaccine for affect his protein-based in had and There implications multiple the are we and happening Pfizer, need but That European in Commission Europe portfolio. still tender a in revenue I about when selling, a General the to think conversations be that with APA will some there, to during

XXXX. is locked need So, The awareness APAs the is critical that a available. vaccine in there's million support schedules delivery an to billion contracts make $X.X and and the and sure for our $XXX

$X.X of about And Roger, that billion versus question to the allocation periods. future had you relative XXXX a

has renegotiated for And been quarter. were today the also mentioned I from $XXX second So, came discussed secured APA delivery. we that the payment, million secured for the $XXX items a a APAs which million

outstanding. we are forward. these for financing we mechanism and of as for our to that certainly billion. gets $XXX available committed total to billion the leaves APAs They're future that you remarks, in course I $X.X calls million these going nondilutive on of more delivery. an and $X.X as That And in that of seek additional mentioned are So move to as renegotiate actively a some

you Excellent. Thank a for the support change. on very strain doing you're will inventory strain helpful. data change market, That's understanding moving for to have the US comment. to potentially the the midyear And and the so view you then,

to million, for data what need seems market deliver it's which have maybe of decided guidance? data strain the of the Just meeting outside to XX upside a June part related VRBPAC able for change you needed curious, or additional is, of is you And once that and $XXX upside are market, the the fall? guidance market revenue also range the to building select you US in revenue additional of you. of revenue that's the US to what be it how US you the towards kind Thank for the much guidance the the

question? would like take the Roger's of to first part Filip you

Sure. the of right? or main least first read conducting and the selection, first before that's strain this we've that I'll you study part at thing we're take and question as successful that really for we're will The part the composition the mentioned done study. we're Roger's waiting out with is and

we it be different. any see why don't should So,

developed all includes we've global of elected, details fact stability with multiple that file The we've are discussed the et additional details and that that need timeline it in manufacturing And regulatory of strain agencies. and times regulatory that's part to part the of that the cetera. be

to vaccine kinds confident So, pretty they in have the the put about understand right we're we the barriers now. and of that market in

you Filip. And Roger's maybe the question. could Jim of Thank take you second part

little walk guidance. detail me you thanks because the revenue asking opportunity and through certainly gives our for to in more Hey a

course, grants. So, of to and guided billion. I'll at $X.X billion $X.X billion, $X.X guidance with to of is And both inclusive and grants total begin that our we've product revenue midpoint of sales

$XXX $XXX $XXX million Grants midpoint of is million to at the million. range

of that for folks this activity our Speed and under to through and is with Operation Warp know year basis As continues government grants operating clinical revenue. US the we've been the fund much

our For in of $X.XX $XXX million $XXX is the sales, that's inclusive midpoint. which at product spoke billion at secured APA or a that, is million And it $XXX subtract for of billion we both $XXX results million the you to to just if delivery. $X.XX million guidance ago, and moment US

So, helpful. that's hopefully

Thank you, Jim.

helpful. that's No,

your you. the that's basically the million understand balance of product I $XXX the Okay. of US Got market. outside sales

question. one for me last the Bear Great. Okay.

flu John you So, combination related the looks strategic mentioned, to to for COVID -- pretty the robust. you towards data some forward maybe move your program. noticing this partnership I therapy, moving collaboration think are But

you bit Just that appreciated. move before study you be have the be detail kind already some immediate Phase and What maybe do efficacy next elaborate stand-alone the into vaccine little what you different next little other you. plan step a your X? of need bit Phase will for Xb on would a Just there. combo more the a Thank from

for question your you Thank Roger.

Let question, can the cetera. et I Filip me and address answer it this let way Xb Phase

number three line our one and comments time we our our at top our emerges. competitive our the regulatory As priority as in this with noted year for our our on focus and product call launching fall prepared for profile in on a is in and Novavax our That's this customers fall season season requirements updated priorities Nuvaxovid is goal. authority

our In parallel current with aggressively. that and is the addressing near-term reducing our and cost and liabilities company resizing

and encouraged our top in to and the of excited Phase position in clearly X line perspective. that Novavax And now we've the that our have successfully leadership on is a place, support actions about first direction year, should continue execute, quarter. I decisive the if the think this in I stronger a a to Board taken be We're team demonstrated with we from some data. This we plan results. able financial very

forward. to Filip, and how question discussions type around, have bring and best the have in may we to now. the And interesting year, these to continue authorities are of add Roger's can would next So like study assets? regulatory on and unique months, these next assets learn from right additional we'll how bring data commentary coming options you with development that to these on forward for what in be

mean regulatory depend, we a go into really that on regulatory in not may would clearly pivotal the study, what I of firm that very well guidance. data. on lot Yes. without And depends of see the rest guidance. We

Additionally, collaboration will partner. and line, if a strategic with determined in with such do a time we forward move that be design partner ultimate

format. with is, high-dose now right mentioned I that's on doing And Phase product. planning be we X done the a XBB COVID are to with doing what Now, earlier. going that our X.X. study

as going immune there explore And including adjuvant formulation, dose is the the optimize levels, as to response. be idea to antigen to optimal the well really

You followed us for time. a long

So in naïve the very saw ranging the was no initial level. there antigen changed at beginning and pandemic, did you the [ph] know dose that you dose our we when we of difference

and these heavily primed a we're a But where are level that individuals, immune increase we people primed in response. evidence now, dose we we in are as different the get seeing place do better

looking has the similar to influenza. to for be in market done in a vaccination we're to been primarily, what high-dose elderly formulation, develop So annual

for questions, you Roger Thank

Joseph with Your comes Eric ahead. JPMorgan. from next go Please question

for guys. taking good the Hi, morning questions. Very

to So fall for I just necessary able wanted to kind get sense are a from of just expansions commercial where approval? come ahead confidence it's a the back the of guess, US? on planned of BLA talk launch And and of I launch a any there preparedness about launch comes under your being -- currently season and whether Can facilitate existing you or in are proceeding EUA, the amendments EUA. that to

please? to like question you from would take that Trizzino, John Eric,

Yes.

emergency coordination in on us today under constant use where BLA we submission, of FDA, as submission and of the that BLA the the where use been emergency are authorization. as timing the authorization, under have with leaves well we and So

labeled So for around the by is the authorization FDA we use globe. have and today the approved and that product emergency

manufacturers similar an format, need will the other which decided. all and of strain is the authorization, emergency additional the to to use for We yet new be new

them, conversations use authorization emergency it operating specifically with will and an our under those upon upon that conversations FDA, we've Based we expectation had be restriction. without with is the based

to that about, unrestricted. all to all with So talked that need that I access to be this that remarks, And our access to distributors planned of the at we says think point. during that activities access will I means know, healthcare pharmacies, providers, all really

sort where from you be supplied Can also the at on or a it's whether maybe in detail market-ready about a just from those Thanks. sounds what guess And quantities, more think I facilities? selection, lead like on follow-up supply appropriate or sourced little the -- do manufacturing ultimately of sort of launch? serum could And just June Okay. being after side. other is strain it manufacturing talk what you time,

Eric. seen very be but protein-based with ready for specific option minimize way working appropriately we've partnership they excellent quite a do -- and not the time regulatory to takes of us question. as the changed FDA season, can that domain, FDA. in internally who authorities in dynamic have good Thank with call, globe. that the an the to production global that's we're expressed from the around shift plan We've And public for it we disclosing FDA a fall prior and includes we've the nice the value said a both to consumers marketplace way and our we're we're quantities to we our now, everything the you, Right project in with on working our teams

on that's made slides that as the and before, progress, earlier, multiple key forward. discussed some And are because on assess Filip bring prepared get we've we data several bringing And data, able becoming we and strains predominant streams to that. significant and we're remarks have the forward his which during said strains in

who to Trizzino, We've we're would to Rick already like finished. steps as the protein-based track vaccine comment a taking bring despite on from that get longer feel and Crowley to we beginning potentially that? ready that So add color prime currently well, been to taking you be now to vaccines the of our pump to ready leads very to manufacturing. be little forward. go bit And or any right John

think, it. well pretty captures No, John, that I

you we're regulatory sure product lines, lines. finish, thinking exactly through those revenue right Eric, we're manufacturing impacted. generation time availability, course, approvals can the as to making And Of distribution and it's that product anticipating time getting fill all centers the imagine are of that

make the to that to available have at we have start product fall season. time end end, those been scrutinized of the examined So lines and sure

taking questions. for Thanks Great. Okay. the

Eric. you, Thank

go from Mayank Riley. comes with ahead. B. Please Our next question Mamtani

progress how split And and you in of I OpEx follow-ups. level XXXX, fiscal couple Appreciate Thanks XXXX of the team. to will workforce between taking be this are morning any granularity detail balance morning. on then XXXX restructuring of also And for resizing, granularity Good would SG&A? there of the Including the be on able provide terms level helpful. question. a versus sheet year any and reductions R&D have

Jim Mayank. would you, take question? Thank to Mayank's you like Kelly,

each of both we our mean, And organization, will, a delivering focus describing COVID certainly. fall, vaccines structure good and cost morning structure. That our The is Hey, priority things, our of that touches this program. that restructuring initiatives our among have core Mayank, corner announced functionally other today morning, we're on global and a as stand-alone sharpening we we the cost-saving you're means COVID that on cost investment geographically. of I significant watching our

that of it based did kick time, some include we advancement pipeline, detail at including results described I of flu the this more on not great saw today. in

it's is we So rationalization as our size it sharpening again, continued our pipeline. our when focus of we includes a a look the back network pausing for to these reductions, of business. of COVID on endemic It the manufacturing It a opportunity.

plus total this from in make also and inclusive it enable in to at our that a reduce marketplace XX% of is do of XXXX what footprint SG&A, different be select success and of workforce, employees going our consolidation G&A our then continue investments to It infrastructure is in also reduction our and this primarily investment. full-time because And commercial to infrastructure. When of where XXXX the a the look APAC impacted we're in US, realm. ensure XX% is in seeking will priority includes facilities to Europe and the as approximately we our markets those further R&D to you to R&D hit in aspects of

steady a from of reflective watch will then So amount just XXXX to significant the possible described. at XXXX us steps when as look And I seek SG&A. you hold be reductions best to those

that's hopefully helpful. So

could are in update program? liabilities could helpful. you number but that like UK on that Gavi, payment, topic comment reduction of also Obviously, on Since are great would provide helpful? very and works that you Yes, things par a be other if the any we if the updates the on government on there

liabilities do just first? cover want to you Jim, question the Yes.

certainly. Hey,

Yes.

of million, our liabilities, but key notes the $XXX that of a was our made by one with Beginning funding this of in approximately maturity we $XXX progress see for saw will our convertible quarter reducing current significant components that $XXX And over reduction you significant liabilities million. the also payables you the million.

a on part this liabilities to some strong So cases financial company put of in we better a address step us footing. a really important onetime that's for as

for million So in that. make liabilities another we hopefully that we X/XX the your folks in covers million. million payment at agreement we least And then We did of the that our also through had par resolution that the previously related April aware question, but also $XXX discussed. of including sure addressed make of the $XXX APA per arbitration terms make to that to and $XX UK been of

things secured payment under helpful the we of million that renegotiated APA. one is that Now $XXX I is had here a announced a

described in And liabilities. during those help that to expect of we flow over So cash million. $XXX I remarks also that's fund QX incredibly our QX, helpful inflows and of

to So around and vaccination management prepared put expectations for important liability QX it towards QX of right on us being the find footing is the the flow to-date, into season. our combination progress that we cash future fall

Mayank Gavi. then ask And you did about

I we that's So Gavi the of can predict process we believe question. this position outcome look that say not currently do matter related owe the restate obviously And confirm Novavax's money do we're is there's the legal cannot regarding company in with and that much in But obviously the to we any to arbitration. that can is the addressing. what matters I arbitration not

your we're question, that best fulfill this for to is soon and we share matter our frustrated low-income But same Thank is mission frustrated what people us our that's of as of were you to global has believe situation. say resolved And provide Gavi potential the health high-quality the Mayank. public I in capabilities. because we and possible behind yet by not vaccines the that to to the mission ability impeding And can matter to and as as like improve we'd the countries. the frankly to put help current

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

us. Just everyone like your and joining in your it. to much. for appreciate We Appreciate Thank you confidence very us thank time today.

The conference attending for concluded. now today's has you presentation. Thank

may You now disconnect.