Novavax (NVAX) Baird's 2024 Global Healthcare Conference summary

Key announcements and strategic updates

• Entered a multi-billion dollar collaboration and license agreement with Sanofi, including upfront, equity, milestone, and royalty payments, with a minority equity investment and global commercialization rights except in certain countries.

• U.S. authorization of updated JN.1 COVID-19 vaccine, with shipments to pharmacies starting September 2024 and broad retail distribution for the 2024-2025 season.

• Four main value drivers: Sanofi deal, late-stage pipeline (flu and combination vaccines), new partnerships, and early-stage pipeline expansion.

• 2024 priorities include executing the Sanofi partnership, expanding the early-stage pipeline, reducing expenses, and delivering the updated COVID-19 vaccine.

• Significant cost reduction initiatives, including facility sale, exiting commercial operations, and 80% R&D/SG&A cut by 2026, with some costs reimbursed by Sanofi.

Pipeline and technology highlights

• Proven recombinant nanoparticle and Matrix-M adjuvant platform underpins all products, validated by commercialized COVID-19 vaccine and large safety database.

• Commercial products include COVID and malaria vaccines; late-stage assets include flu and COVID-flu combination vaccines, with phase 3 for CIC and influenza to start Q4 2024 and topline results mid-2025.

• Phase 2 data for COVID-flu combination showed non-inferiority and statistical superiority for key strains; FDA alignment achieved for a single Phase 3 study.

• Early-stage pipeline includes RSV and H5N1, with IND-enabling studies planned in 2024 to support Phase 1 trials.

• Matrix-M adjuvant shown to enhance immune response in both flu and pneumococcal/viral and bacterial vaccine models, supporting new product development and potential out-licensing.

Financial guidance and milestones

• 2024 revenue guidance: $700–$800 million, with $425 million from licensing/royalties and $275–$375 million from product sales, including $100 million from APA dose deliveries and $175–$275 million from commercial market sales in 2H 2024.

• $500 million upfront and $70 million equity from Sanofi, with up to $1.27 billion in milestones and tiered royalties for up to 20 years post-launch.

• R&D and SG&A guidance for 2024: $700–$750 million, with further reductions planned to below $500 million in 2025 and below $350 million in 2026.

• Key milestones: U.S. and European product launches, phase 3 program initiations, regulatory submissions, and new R&D portfolio rollout after Q3 earnings.

• Ongoing monitoring of market performance and updates planned for investors in coming months, with preclinical candidate review to inform future investments.