Novavax Reports Fourth Quarter and Full Year 2023 Financial Results and Operational Highlights

Novavax, Inc. (Nasdaq: NVAX), a global company advancing protein-based vaccines with its Matrix-M™ adjuvant, today announced its financial results and operational highlights for the fourth quarter and twelve months ended December 31, 2023.

“2023 was a transition year for Novavax and we have made tremendous progress towards strengthening the financial profile of the Company, delivering the only protein-based non-mRNA COVID-19 vaccine option to the U.S. and globally, and focusing our investment on the future expansion of our product portfolio,” said John C. Jacobs, President and Chief Executive Officer, Novavax. “Moving into the next chapter of our business journey as a more lean and agile organization, we are laser focused on improving our commercial performance in 2024 and 2025 and diversifying our revenue opportunity with our potential combination vaccine launch which we expect in the fall of 2026.”

Fourth Quarter 2023 and Recent Highlights

During the fourth quarter, Novavax continued to execute against its three key priorities for 2023.

Priority #1: Deliver an Updated COVID-19 Vaccine for the 2023 Fall Vaccination Season

U.S. Market: Demonstrated ability to update COVID-19 vaccine and deliver the only protein-based non-mRNA option to market.

• Gained commercial experience in the U.S. after receiving Emergency Use Authorization with future efforts to focus on a recalibration of U.S. field teams to focus on the retail segment
• Progressed efforts to position the company for a stronger performance in 2024-2025 COVID-19 vaccination season with focus on a single-dose product presentation for delivery at the start of the season and planned BLA approval to enable marketing and promotion for Nuvaxovid during season
• Progressed efforts to streamline manufacturing and to advance strain selection at risk while advocating for more timely identification of strains by regulatory authorities
• Continued advancement of discussions for 2024-2025 COVID-19 vaccination season with major retailers who have driven 90% of the pharmacy business

Global Markets: Delivered on 2023 Advance Purchase Agreement (APA) obligations in Europe, Canada, Australia, New Zealand, Singapore and Taiwan.

• Potential APA deliveries for 2024 through 2026 of over $1 billion consisting primarily of deliveries to Australia, New Zealand, Canada, Israel and Europe
• For 2024, made strategic decision to prioritize and focus commercial effort in Europe on select key countries including Italy, Spain, France and the U.K.
• Spring 2024 U.K. private market launch expected for Novavax’s COVID-19 vaccine as enabled by the recent Green Book addition by the U.K. Health Security Agency

Priority #2: Reduce Rate of Spend, Manage Cash Flow and Evolve Scale and Structure

Novavax has made significant progress on its commitment to improve its financial position while maintaining the capabilities that support long-term value creation.

• Reduced full year 2023 operating expenses by $1.1 billion, or 41%, as compared to 2022
• Exceeded the previously announced global restructuring and cost reduction plan for 2023 by approximately $150 million for combined Research and Development (R&D) and Selling, General, and Administrative (SG&A) expenses
• Reduced workforce by a total of 30% compared to first quarter of 2023
• Delivered Q4 2023 doses under the Canada APA agreement and received $175 million contingent payment in January 2024
• Settled arbitration with Gavi, the Vaccine Alliance (Gavi), removing financial uncertainty and enabling focus on shared public health mission

Priority #3: Leverage Technology Platform, Capabilities, and Portfolio of Assets to Drive Additional Value Beyond Nuvaxovid™

Novavax remains focused on leveraging its technology platform, including its proprietary Matrix-M adjuvant, to drive long-term growth and protect global public health.

• Expect to initiate a pivotal Phase 3 trial for COVID-19-Influenza Combination (CIC) vaccine candidate in the second half of 2024, with potential for accelerated approval and anticipated launch in 2026
• R21/Matrix-M vaccine received prequalification by the World Health Organization (WHO) based on Phase 3 efficacy trial results, which were recently published in The Lancet, enabling global rollout of the vaccine in eligible United Nation countries

Fourth Quarter and Full Year 2023 Financial Results

• Total revenue for the fourth quarter of 2023 was $291 million, compared to $357 million in the same period in 2022. Total revenue for the full year 2023 was $984 million, compared to $2 billion in the same period in 2022.
• Cost of sales for the fourth quarter of 2023 was $155 million, compared to $182 million in the same period in 2022. These quarters included $30 million and $99 million, respectively, related to excess, obsolete or expired inventory and losses on firm purchase commitments under third-party supply agreements. Cost of sales for the full year 2023 were $344 million compared to $903 million in same period of 2022. These full year periods included $112 million and $604 million, respectively, related to excess, obsolete or expired inventory and losses on firm purchase commitments under third-party supply agreements.
• R&D expenses for the fourth quarter of 2023 were $165 million, compared to $258 million in the same period in 2022. R&D expenses for the full year 2023 were $738 million compared to $1.2 billion in the same period 2022. The decrease in both periods was primarily due to reductions in manufacturing and clinical research related spend.
• SG&A expenses for the fourth quarter of 2023 were $155 million, compared to $162 million for the same period in 2022.  SG&A expenses for the full year 2023 were $469 million, compared to $489 for the same period in 2022. The decrease in both periods reflected commercial investment that was offset by reductions to spend by G&A functions compared to prior year.
• Net loss for the fourth quarter 2023 was $178 million, compared to a net loss of $182 million in the same period in 2022. Net loss for the full year 2023 was $545 million, compared to a net loss of $658 million in the same period in 2022.
• Cash, cash equivalents and restricted cash were $584 million as of December 31, 2023, compared to $666 million as of September 30, 2023, and $1.3 billion as of December 31, 2022. Through sales of Novavax common stock pursuant to at-the-market offerings during the fourth quarter of 2023, Novavax raised net proceeds of $110 million.

Financial Framework

Novavax is providing Full Year 2024 Financial Guidance and expects to achieve the following objectives:

First Quarter 2024 Total Revenue is expected to be approximately $100 million.

Total potential contract value for APAs outstanding as of December 31, 2023 were over $1 billion related to expected dose deliveries for 2024 through 2026. This amount excludes deferred revenue associated with the 2023 Canada amendments to forfeit doses.

1. Total Revenue includes product sales and royalties & other revenue.
2. Full year 2024 guidance reflects APA expected dose delivery schedules of $500 million to $600 million and non-APA related revenue of $300 million to $400 million from a combination of commercial market product sales plus royalties and other revenue from our partner-related activity, subject to updated variant manufacturing and regulatory approvals. 

About Novavax

Novavax, Inc. (Nasdaq: NVAX) promotes improved health by discovering, developing and commercializing innovative vaccines to help protect against serious infectious diseases. Novavax, a global company based in Gaithersburg, Md., U.S., offers a differentiated vaccine platform that combines a recombinant protein approach, innovative nanoparticle technology and Novavax’s patented Matrix-M adjuvant to enhance the immune response. The Company’s portfolio includes its COVID-19 vaccine and its pipeline includes a vaccine for COVID-19 and influenza combined. In addition, Novavax’s adjuvant is included in the University of Oxford and Serum Institute of India’s R21/Matrix-M malaria vaccine. Please visit novavax.com and LinkedIn for more information.