On August 8, 2022 Novavax, Inc. (NASDAQ: NVAX), a biotechnology company dedicated to developing and commercializing next-generation vaccines for serious infectious diseases, reported its financial results and operational highlights for the second quarter ended June 30, 2022 (Press release, Novavax, AUG 8, 2022, View Source [SID1234617822]).
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"We are pleased with our progress since the start of the second quarter, which importantly included delivering our vaccine to the U.S. market with immunizations underway," said Stanley C. Erck, President and Chief Executive Officer, Novavax. "With over 23 million doses delivered since the start of the third quarter, we are distributing our vaccine globally and have gained positive momentum as we move into the remainder of 2022 and into 2023. Through continued expansions to our label for adolescents and boosting and our vaccine’s competitive product profile, we are confident it will play an important role in the long-term COVID-19 landscape."
Second Quarter 2022 and Recent Highlights
Progressed COVID-19 Global Regulatory Strategy
Received Emergency Use Authorization (EUA) from United States (U.S.) Food and Drug Administration (FDA) with label expansion underway, marking first protein-based COVID-19 vaccine available for use domestically
Authorized for primary series in adults 18 and older with unanimous recommendation received from U.S. Centers for Disease Control and Prevention (CDC)
Planned submission for boosting data from PREVENT-19 Phase 3 trial in August of 2022
Nuvaxovid or Covovax authorized in 43 countries for primary series in adults 18 and older, with additional label expansions received and underway in several geographies
Authorized for boosting in adults 18 and older in Japan, Australia and New Zealand
Nuvaxovid filings completed in the European Union (EU), Great Britain and Switzerland
Authorized for primary series in adolescents aged 12 through 17 in the EU, India, Australia, Japan and Thailand
Nuvaxovid filings completed to the World Health Organization (WHO), Great Britain, Canada, Switzerland, New Zealand and Taiwan
Expect to file for authorization of Omicron-containing vaccine with U.S. FDA in the fourth quarter of 2022
COVID-19 Vaccine Manufacturing and Distribution
Delivered over 73 million doses of Nuvaxovid and Covovax globally to date, including 23 million doses since the start of the third quarter 2022, reflecting strong momentum for the remainder of 2022
Secured order from U.S. government for 3.2 million initial doses under existing agreements, with distribution underway
Received approval from European Medicines Agency for SK bioscience to manufacture and supply the active substance in the Nuvaxovid COVID-19 vaccine to the EU
Expanded partnership with SK bioscience to support manufacturing of Omicron-containing vaccine and to manufacture vaccine in prefilled syringes for commercial supply in 2023
COVID-19 Clinical Development Program
Ongoing development of Omicron BA.1 specific vaccine (NVX-CoV2515), Omicron BA.5 specific vaccine and bivalent format with prototype vaccine (NVX-CoV2373)
Announced positive preclinical boosting data for NVX-CoV2373, NVX-CoV2515, or bivalent formulation, demonstrating strong antibody levels
Ongoing Phase 3 strain change trial to assess safety and antibody responses following primary vaccination with mRNA vaccines; initial results expected near the end of the third quarter of 2022
Initiated Phase 2b/3 Hummingbird global clinical trial in younger children aged six months through 11 years with initial results expected in the first quarter of 2023
Expected to enroll total 3,600 participants across nine countries, evaluating safety, effectiveness (immunogenicity) and efficacy of two doses of NVX-CoV2373, followed by a booster at least six months after primary vaccination in three age cohorts
Advanced multiple studies evaluating homologous and heterologous boosting in adolescents for NVX-CoV2373
Completed administration of homologous third-dose booster for select participants in PREVENT-19 Phase 3 booster study in adolescents aged 12 through 17
Ongoing participation in University of Oxford’s Com-COV3 Booster trial in adolescents aged 12 through 15 to evaluate heterologous boosting
COVID-19-Influenza Combination (CIC) Vaccine Candidate Clinical Development
Announced initial results of CIC Phase 1/2 trial demonstrating robust immune response with both stand-alone influenza and CIC vaccine candidates
Phase 3 trial to evaluate efficacy on-track to be initiated in 2023
Financial Results for the Three Months Ended June 30, 2022
Total revenue for the second quarter of 2022 was $186 million, compared to $298 million for the comparable period in 2021. Second quarter of 2022 total revenue includes $78 million of revenue comprised of $55 million of product sales from NVX-CoV2373 based on three million doses sold by Novavax and $23 million of royalties, milestone, and adjuvant sales to our license partners. Grant revenue of $108 million in the second quarter of 2022 compared to $272 million in the prior year resulted from a decrease in activity under our agreements with the U.S. government and with the Coalition for Epidemic Preparedness Innovations.
Cost of sales for the second quarter of 2022 were $271 million. This includes $255 million related to excess, obsolete, or expired inventory and losses on firm purchase commitments under our third party supply agreements. The recognition of these costs were driven by a substantial reduction of our expected deliveries to COVAX and deferral of deliveries to other customers. During 2021 and prior to receipt of regulatory authorizations for NVX-CoV2373, certain manufacturing costs were expensed to research and development that would otherwise have been capitalized to inventory.
Research and development expenses for the second quarter of 2022 were $290 million compared to $571 million for the comparable period in 2021. The decrease was primarily the result of lower clinical development activities for NVX-CoV2373, the capitalization of NVX-CoV2373 manufacturing costs and a net benefit from previously recognized embedded lease costs for manufacturing supply agreements during the second quarter of 2022.
Selling, general and administrative expenses for the second quarter of 2022 were $108 million compared to $73 million for the comparable period in 2021. The increase in the period was the result of activities in support of the commercialization of NVX-CoV2373.
Net loss for the second quarter of 2022 was $510 million compared to $352 million for the comparable period in 2021.
Cash, cash equivalents, and restricted cash were $1.4 billion as of June 30, 2022, compared to $1.5 billion as of December 31, 2021.
Financial Guidance
Revising full year 2022 total revenue guidance to $2 to $2.3 billion. Total revenue reflects all sources, including product sales of Nuvaxovid by Novavax, grants revenue, royalties and other revenue.
Conference Call
Novavax will host its quarterly conference call today at 4:30 p.m. ET. The dial-in numbers for the conference call are (833) 974-2381 (Domestic) or (412) 317-5774 (International). Participants will be prompted to request to join the Novavax, Inc. call. A replay of the conference call will be available starting at 7:30 p.m. ET on August 8, 2022 until 11:59 p.m. ET on August 15, 2022. To access the replay by telephone, dial (877) 344-7529 (Domestic) or (412) 317-0088 (International) and use passcode 9237495.
A webcast of the conference call can also be accessed on the Novavax website at novavax.com/events. A replay of the webcast will be available on the Novavax website until November 8, 2022.
About NVX-CoV2373
NVX-CoV2373 is a protein-based vaccine engineered from the genetic sequence of the first strain of SARS-CoV-2, the virus that causes COVID-19 disease. The vaccine was created using Novavax’ recombinant nanoparticle technology to generate antigen derived from the coronavirus S protein and is formulated with Novavax’ patented saponin-based Matrix-M adjuvant to enhance the immune response and stimulate high levels of neutralizing antibodies. NVX-CoV2373 contains purified protein antigen and can neither replicate, nor can it cause COVID-19.
The Novavax COVID-19 vaccine is packaged as a ready-to-use liquid formulation in a vial containing ten doses. The vaccination regimen calls for two 0.5 ml doses (5 mcg antigen and 50 mcg Matrix-M adjuvant) given intramuscularly 21 days apart. The vaccine is stored at 2°- 8° Celsius, enabling the use of existing vaccine supply and cold chain channels. Use of the vaccine should be in accordance with official recommendations.
Novavax has established partnerships for the manufacture, commercialization, and distribution of NVX-CoV2373 worldwide. Existing authorizations leverage Novavax’ manufacturing partnership with Serum Institute of India, the world’s largest vaccine manufacturer by volume. They will later be supplemented with data from additional manufacturing sites throughout Novavax’ global supply chain.
About Matrix-M Adjuvant
Novavax’ patented saponin-based Matrix-M adjuvant has demonstrated a potent and well-tolerated effect by stimulating the entry of antigen-presenting cells into the injection site and enhancing antigen presentation in local lymph nodes, boosting immune response.
About Novavax’ Influenza Program
Novavax’ influenza vaccine, previously known as NanoFlu, is a quadrivalent recombinant hemagglutinin (HA) protein nanoparticle influenza vaccine produced by Novavax in its SF9 insect cell baculovirus system. The influenza vaccine uses HA amino acid protein sequences that are the same as the recommended wild-type circulating virus HA sequences, and contains Novavax’ patented saponin-based Matrix-M adjuvant. This investigational candidate was evaluated during a controlled phase 3 trial conducted during the 2019-2020 influenza season.