8 unchanged sentences
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
−Removed: Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, as a process designed by, or under the supervision of, the Company’s principal executive officer and principal financial officer and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States (“GAAP”).
+Added: Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, as a process designed by, or under the supervision of, the Company’s principal executive officer and principal financial officer and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
Such internal control includes those policies and procedures that:
22 unchanged sentences
The following table provides our equity compensation plan information as of December 31, 2022.
−Removed: Under these plans, our common stock may be issued upon the exercise and/or vesting of equity awards and purchases under our Employee Stock Purchase Plan (“ESPP”).
+Added: Under these plans, our common stock may be issued upon the exercise or vesting of equity awards and purchases under our Employee Stock Purchase Plan (“ESPP”).
See also the information regarding our equity awards and ESPP in Note 14 to the consolidated financial statements included herewith.
14 unchanged sentences
Equity compensation plans approved by security holders (1)
+Added: 6,151,589 $47.11 4,501,492
Equity compensation plans not approved by security holders N/A N/A N/A
2 unchanged sentences
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
−Removed: We incorporate herein by reference the information required by this item concerning certain related party transactions set forth in Note 16 to our consolidated financial statements included herewith.
−Removed: We incorporate herein by reference other information required by this item concerning certain other relationships and related transactions and director independence to be contained in the 2022 Proxy Statement.
+Added: We incorporate herein by reference the information required by this item concerning certain relationships and related transactions and director independence to be contained in the 2023 Proxy Statement.
PRINCIPAL ACCOUNTING FEES AND SERVICES
4 unchanged sentences
Reports of Independent Registered Public Accounting Firm (PCAOB ID:42)
−Removed: Consolidated Balance Sheets as of December 31, 202 1 and 2 020
Consolidated Statements of Operations and Statements of Comprehensive Loss for the years ended December 31, 2022, 2021, and 2020
+Added: Consolidated Balance Sheets as of December 31, 2022 and 2021
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2022, 2021 , and 2020
6 unchanged sentences
Confidential treatment has been granted for portions of exhibits marked with a double asterisk (**).
−Removed: Confidential information contained in exhibits marked with a caret (^) has been omitted because it (i) is not material and/or (ii) would be competitively harmful if publicly disclosed.
+Added: Confidential information contained in exhibits marked with a caret (^) has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
All other exhibits listed have previously been filed with the SEC and are incorporated herein by reference.
5 unchanged sentences
4.1 Specimen stock certificate for shares of common stock of the Company, par value $.01 per share (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3, filed on December 31, 2019 (File No.
−Removed: 4.2 Indenture (including form of Notes) with respect to the Company's 3.75% Convertible Senior Notes due 2023, dated as of January 29, 2016, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (Incorporated by reference to Exhibit 4.1 to the Company ’s Current Report on Form 8-K, filed on January 29, 2016 (File No.
+Added: 4.2 Indenture (including form of Notes) with respect to the Company's 5 .
+Added: 00 % Convertible Senior Notes due 202 7 , dated as of December 20 , 20 22 , between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on December 21, 2022 (File No.
4.3 Form of Series A Convertible Preferred Stock Certificate of the Company (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed June 19, 2020 (File No.
−Removed: 4.4* Description of the C o mpany's Securities
+Added: 4.4* Description of the Company's Securities
10.1†† The Company's Amended and Restated 2005 Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, filed on March 12, 2013 (File No.
10.2†† Amendment to Amended and Restated 2005 Stock Incentive Plan (Incorporated by reference to Appendix 1 of the Company ’ s Definitive Proxy Statement filed on April 30, 2014 in connection with the Annual Meeting held on June 12, 2014 (File No.
−Removed: 10.3†† Form of Non-Statutory Stock Option Award Agreement granted under the Company's Amended and Restated 2005 Stock Incentive Plan (Incorporated by reference to Exhibit 10.4 to the Compan y ’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 27, 2015 (File No.
−Removed: 10.4†† Form of Incentive Stock Option Award Agreement granted under the Company's Amended and Restated 2005 Stock Incentive Plan (Incorporated by reference to Exhibit 10.5 to the Company ’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 27, 2015 (File No.
−Removed: 10.5†† Amended and Restated 2013 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.1 to the Company ’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2020, filed on May 11, 2020 (File No.
−Removed: 10.6†† The Company's Amended and Restated 2015 Stock Incentive Plan (Incorporated by reference to Appendix A of the Company ’s Definitive Proxy Statement filed on May 3, 2021 in connection with the Annual Meeting held on June 17, 2021 (File No.
−Removed: 10.7†† Form of Non-Statutory Stock Option Award Agreement granted under the Company's 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.3 to the Company ’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015 (File No.
−Removed: 10.8†† Form of Incentive Stock Option Award Agreement granted under the Company's 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.4 to the Company ’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015 (File No.
+Added: 10.3†† Form of Non-Statutory Stock Option Award Agreement granted under the Company's Amended and Restated 2005 Stock Incentive Plan (Incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 27, 2015 (File No.
10.4†† Form of Incentive Stock Option Award Agreement granted under the Company's Amended and Restated 2005 Stock Incentive Plan (Incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 27, 2015 (File No.
−Removed: 10.10†† Form of Incentive Stock O p t i o n Agreement granted under the Company's Amended and Restated 2015 Stock Incentive Plan (Performance- and Time-Based Vesting) (Incorporated by reference to Exhibit 10.1 to the Company ’s Current Report on Form 8-K, filed on November 16, 2016 (File No.
−Removed: 10.11†† Form of Restricted Stock Award Agreement granted under the Company's 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.5 to the Company' ’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015 (File No.
−Removed: 10.12†† Form of Restricted Stock Unit Agreement granted under the Company's .
−Removed: Amended and Restated 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.12 to the Company ’s Annual Report on Form 10-K for the year ended December 31, 2019, filed on March 18, 2019 (File No.
−Removed: 10.13†† Form of Stock Appreciation Right Award Agreement granted under the Company' s Amended and Restated 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company ’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed on November 7, 2019 (File No.
+Added: 10.5†† Amended and Restated Novavax, I n c.
+Added: 2 013 Employee Stock Purchase Plan (Incorporated by reference to Appendix D of the C o mpany ’ s Definitive Proxy Statement filed on May 2, 2022 in connection with the A n nual Meeting held on June 16, 2022 (File No.
+Added: 10.6†† Amended and Restated Novavax, Inc.
+Added: 2015 Stock Incentive Plan (Incorporated by reference to Appendix Appendix C of the Company’s Definitive Proxy Statement filed on May 2, 2022 in connection with the Annual Meeting held on June 16, 2022 (File No.
+Added: 10.7†† Form of Non-Statutory Stock Option Award Agreement granted under the Amended and Restated Novavax, Inc.
+Added: 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015 (File No.
+Added: 10.8†† Form of Incentive Stock Option Award Agreement granted under the Amended and Restated Novavax, I n c.
+Added: 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015 (File No.
+Added: 10.9†† Form of Incentive Stock Option Award Agreement granted under the Amended and Restated Novavax, Inc.
+Added: 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed on February 27, 2017 (File No.
+Added: 10.10†† Form of Incentive Stock Option Agreement granted under the Amended and Restated Novavax, Inc.
+Added: 2015 Stock Incentive Plan (Performance- and Time-Based Vesting) (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on November 16, 2016 (File No.
+Added: 10.11†† Form of Restricted Stock Award Agreement granted under the Amended and Restated Novavax, Inc.
+Added: 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.5 to the Company ’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015 (File No.
+Added: 10.12†† Form of Restricted Stock Unit Agreement granted under the Amended and Restated Novavax, I nc .
+Added: 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed on March 18, 2019 (File No.
+Added: 10.13†† Form of Stock Appreciation Right Award Agreement granted under the Amended and Restated Novavax, Inc.
+Added: 2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed on November 7, 2019 (File No.
10.14†† Form of Director Deferred Fee Agreement (Incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed on February 29, 2016 (File No.
+Added: 10.15†† Novavax, Inc.
+Added: 2023 Inducement Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on January 9, 2023 (File No.
+Added: 10.16†† Form of Non-Statutory Stock Option Agreement under the Novavax, Inc.
+Added: 2023 Inducement Plan (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on January 9, 2023 (File No.
+Added: 10.17†† Form of Restricted Stock Unit Award Agreement under the Novavax, Inc.
+Added: 2023 Inducement Plan (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on January 9, 2023 (File No.
+Added: 10.18††* Employment Agreement between the Company and John C.
+Added: Jacobs, dated as of January 5, 2023
10.19†† Employment Agreement between the Company and Stanley C.
Erck, dated as of June 22, 2011 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed on August 9, 2011 (File No.
+Added: 10.20††* Consulting and Advisory Agreement between the Company and Stanley C.
+Added: Erck, dated as of January 5, 2023
10.21†† Employment Agreement between the Company and Gregory M.
Glenn dated July 1, 2010 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on July 6, 2010 (File No.
−Removed: 10.17†† Employment Agreement between the Company and Gregory F.
−Removed: Covino dated October 30, 2020 (Incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.
−Removed: 10.18†† Employment Agreement between the Company and Gregory F.
−Removed: Covino dated April 13, 2021 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed on August 5, 2021 (File No.
−Removed: 10.19†† Offer letter to Gregory F.
−Removed: Covino dated October 30, 2020 (Incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.
−Removed: 10.20†† Consulting Agreement between the Company and Gregory F.
−Removed: Covino, dated August 10, 2021 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on November 5, 2021 (File No.
10.22†† Employment Agreement between the Company and John A.
Herrmann dated April 1, 2012 (Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on May 5, 2016 (File No.
−Removed: 10.22†† Employment Agreement between the Company and John J.
+Added: 10.23†† E mployment Agreement between the Company and John J.
Trizzino dated March 3, 2014 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on May 5, 2016 (File No.
11 unchanged sentences
10.29 Lease Agreement for space at 22 Firstfield Road between ARE-20/22/1300 Firstfield Quince Orchard, LLC and the Company, dated as of November 18, 2011 (Incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on March 14, 2012 (File No.
−Removed: 10.29 Deed of Lease for space at 21 Firstfield Road between Firstfield Holdco, LLC and the C ompany , dated as of February 4, 2015 (Incorporated by reference to Exhibit 10.1 to the Company' s Current Report on Form 8-K, filed on August 21, 2015 (File No.
+Added: 10.30 Deed of Lease for space at 21 Firstfield Road between Firstfield Holdco, LLC and the Company, dated as of February 4, 2015 (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on August 21, 2015 (File No.
10.31 First Amendment to Deed of Lease for space at 21 Firstfield Road between Firstfield Holdco, LLC and the Company, dated as of August 17, 2015 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on August 21, 2015 (File No.
3 unchanged sentences
10.34 Amendment to Deed of Lease for space at 700 Quince Orchard Road between ARE-MARYLAND NO.
−Removed: 51, LLC and the Company, dated June 22, 2021
−Removed: 10.34** Second Amended and Restated Joint Venture Agreement between the Company and Cadila Pharmaceuticals Limited, dated as of July 17, 2018 (Incorporated by reference to Exhibit 10.1 to the Company ’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, filed on November 7, 2018 (File No.
−Removed: 10.35** Second Amended and Restated Novavax Product License Agreement between t he Company and CPL Biologicals Private Limited, dated as of July 17, 2018 (Incorporated by reference to Exhibit 10.2 to the Company' s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, filed on November 7, 2018 (File No.
−Removed: 10.36^ Amended an d Restated Supply and License Agreement , da ted July 1, 2021, between the Company and Serum Institute of India Private Limited (Incorporated by reference to Exhibit 10.4 to the Company ’s Quarterly Report on Form 10-Q for the quarter ended September 30, 202 1, file d on November 5, 2021 (File No.
−Removed: 10.37^* Supply Agreement between the Company, Serum Institute of India Private Limited and Serum Life Sciences Limited, executed as of October 26, 2021
+Added: 51, LLC and the Company, dated June 22, 2021 (Incorporated by reference to Exhibit 10.33 to the C o mpany ’ s Annual Report on F o rm 10-K for the year ended December 31, 2021, filed on March 1, 2022 (F il e No.
+Added: 10.35^ Amended and Restated Supply and License Agreement, dated July 1, 2021, between the Company and Serum Institute of India Private Limited (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on November 5, 2021 (File No.
+Added: 10.36^ Supply Agreement between the Company, Serum Institute of India Private Limited and Serum Life Sciences Limited, executed as of October 26, 2021 (Incorporated by reference to Exhibit 10.3 7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.
+Added: 10.37^ Contract Development Manufacture Agreement, dated October 21, 2021, between the Company and Serum Life Sciences Limited (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed on August 8, 2022 (File No.
+Added: 10.38^ Amendment No.
+Added: 1 to the Contract Development Manufacture Agreement, executed as of April 29, 2022, between the Company and Serum Life Sciences Limited (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed on August 8, 2022 (File No.
+Added: 10.39^ Statement of Work No.
+Added: 1 to the Contract Development Manufacture Agreement, effective as of April 29, 2022, between the Company and Serum Life Sciences Limited (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed on August 8, 2022 (File No.
10.40^ Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of February 12, 2021 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed on May 10, 2021 (File No.
−Removed: 10.39^* Amendment to Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of December 23, 2021
+Added: 10.41^ Amendment to Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of December 23, 2021 (Incorporated by reference to Exhibit 10.39 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.
10.42^ Statement of Work No.
−Removed: 1 to Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of December 23, 2021
+Added: 1 to Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of December 23, 2021 (Incorporated by reference to Exhibit 10.
+Added: 40 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.
+Added: 10.43^ Change Order No.
+Added: 1 to Statement of Work No.
+Added: 1 to Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of March 31, 2022 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed on May 9, 2022 (File No.
10.44^ Collaboration and Exclusive License Agreement between the Company and Takeda Pharmaceutical Company Limited, dated as of February 24, 2021 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed on May 10, 2021 (File No.
−Removed: 10.42** Grant Agreement between Bill & Melinda Gates Foundation and the Company, dated as of September 25, 2015 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed on November 9, 2015 (File No.
10.45** Global Access Commitments Agreement between Bill & Melinda Gates Foundation and the Company, dated as of September 25, 2015 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed on November 9, 2015 (File No.
10.46^ Asset Purchase Agreement between Company and Paragon Bioservices, Inc., dated June 26, 2019 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, filed on August 7, 2019 (File No.
−Removed: 10.45^ SARS-CoV-2 Vaccine Supply Agreement, effective as of October 22, 2020, between the Company and The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (Incorporated by reference to Exhibit 10.35 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.
−Removed: 10.46^ Advance Purchase Agreement, effective as of December 31, 2020, between the Company and the Commonwealth of Australia as represented by the Department of Health (Incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.
−Removed: 10.47^* Amendment to Advance Purchase Agreement between the Company, and the Commonwealth of Australia as represented by the Department of Health, dated as of December 23, 2021
−Removed: 10.48^ Advance Purchase Agreement, effective as of January 19, 2021, between the Company and Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works and Government Services (Incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.
−Removed: 10.49^ Advance Purchase Agreement, dated May 5, 2021, between the Company and the Gavi Alliance (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed on August 5, 2021 (File No.
+Added: 10.47^ Amended and Restated SARS-CoV-2 Vaccine Supply Agreement, dated as of July 1, 2022 , between the Company and The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (Incorporated by reference to Exhibit 10.
+Added: 1 to the Company’s Quarterly Report on Form 10- Q for the q uarter ended September 30, 2022 , filed on N o vember 9, 2022 (File No.
+Added: 10.48^ Letter of Amendment to the Amended and Restated SARS-CoV-2 Vaccine Supply Agreement, dated as of September 26, 2022, between the Company and The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.
+Added: 10.49^ Advance d Purchase Agreement, effective as of December 31, 2020, between the Company and the Commonwealth of Australia as represented by the Department of Health (Incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.
+Added: 10.50^ Amendment to Advance d Purchase Agreement between the Company, and the Commonwealth of Australia as represented by the Department of Health, dated as of December 23, 2021 (Incorporated by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.
+Added: 10.51^ Advance d Purchase Agreement, effective as of January 19, 2021, between the Company and Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works and Government Services (Incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.
10.52^ Advance Purchase Agreement, dated August 16, 2021, between the Company, Novavax CZ and the European Commission (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on November 5, 2021 (File No.
10.53^ Base Agreement between the Company and Advanced Technology International, dated June 25, 2020 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 (File No.
+Added: 10.54^ Modification No.
+Added: 01 to Base Agreement between the Company and Advanced Technology International, dated as of March 23, 2022 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed on May 9, 2022 (File No.
+Added: 10.55^ Modification No.
+Added: 02 to Base Agreement between the Company and Advanced Technology International, dated as of August 2, 2022 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.
+Added: 10.56^* Modification No.
+Added: 03 to Base Agreement between the Company and Advanced Technology International, dated as of November 30, 2022
10.57^ Undefinitized Project Agreement No.
35 unchanged sentences
12 to Undefinitized Project Agreement No.
−Removed: 01, dated December 20, 2021, between the Company and Advanced Technology International
+Added: 01, dated December 20, 2021, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.64 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.
10.70^ Modification No.
13 to Undefinitized Project Agreement No.
−Removed: 01, dated February 1, 2022, between the Company and Advanced Technology International
−Removed: 10.66 Letter Contract between the Company and the U.S.
−Removed: Department of Defense Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense, dated June 8, 2020 (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (File No.
−Removed: 10.67 Amendment of Solicitation/Modification of Contract between the Company and the U.S.
−Removed: Department of Defense Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense, dated September 16, 2020 (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (File No.
−Removed: 10.68^ Amendment of Solicitation/Modification of Contract, Modification No.
−Removed: 2, entered into December 1, 2020, between the Company and the U.S.
−Removed: Department of Defense Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (Incorporated by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.
+Added: 01, dated February 1, 2022, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.65 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.
+Added: 10.71^ Modification No.
+Added: 14 to Undefinitized Project Agreement No.
+Added: 01, dated July 1, 2022, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.
+Added: 10.72^ Modification No.
+Added: 15 to Undefinitized Project Agreement No.
+Added: 01, dated August 9, 2022, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.
+Added: 10.73^ Modification No.
+Added: 16 to Undefinitized Project Agreement No.
+Added: 01, dated September 9, 2022, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.
10.74^ Amendment of Solicitation/Modification of Contract, Modification No.
−Removed: 3, entered into January 5, 2021, between the Company and the U.S.
−Removed: Department of Defense Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (Incorporated by reference to Exhibit 10.49 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.
−Removed: 10.70 Base Call Option Transaction Confirmation, dated as of January 25, 2016, between Novavax and JPMorgan Chase Bank, National Association, London Branch (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on January 29, 2016 (File No.
−Removed: 10.71 Base Call Option Transaction Confirmation, dated as of January 25, 2016, between Novavax and Morgan Stanley & Co.
−Removed: LLC (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on January 29, 2016 (File No.
−Removed: 10.72 Additional Base Call Option Transaction Confirmation, dated as of February 2, 2016, between Novavax and JPMorgan Chase Bank, National Association, London Branch (Incorporated by reference to Exhibit 10.51 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed on February 29, 2016 (File No.
−Removed: 10.73 Additional Base Call Option Transaction Confirmation, dated as of February 2, 2016, between Novavax and Morgan Stanley & Co.
−Removed: LLC (Incorporated by reference to Exhibit 10.52 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed on February 29, 2016 (File No.
+Added: 6 , dated as of July 29, 2022, between the Company and the U.S.
+Added: Department of Defense Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.
10.75 Series A Convertible Preferred Subscription Agreement, dated June 15, 2020, between the Company and RA Capital Healthcare Fund, L.P.
(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 19, 2020 (File No.
−Removed: 10.75 Restated Funding Agreement, entered into on May 11, 2020, between the Company and the Coalition for Epidemic Preparedness Innovations (Incorporated as reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (File No.
+Added: 10.76 Restated Funding Agreement, entered into on May 11, 2020, between the Company and the Coalition for Epidemic Preparedness Innovations (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (File No.
10.77^ Amendment Number 1 to the iPDP and Budget of the Outbreak Response Funding Agreement (Step 2), entered into on November 2, 2020, between the Company and the Coalition for Epidemic Preparedness Innovations (Incorporated by reference to Exhibit 10.56 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.
−Removed: 10.77 Share Purchase Agreement between the Company (solely as guarantor), Novavax AB, De Bilt Holdings B.V., Poonawalla Science Park B.V., Bilthoven Biologicals B.V.
−Removed: and Serum Institute International B.V.
−Removed: (solely as guarantor), dated May 27, 2020 (Incorporated as reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (File No.
−Removed: 14* Code of Conduct
+Added: 10.78^ Settlement Agreement, dated September 30, 2022, between the Company and FUJIFILM Diosynth Biotechnologies UK Limited, FUJIFILM Diosynth Biotechnologies Texas, LLC, and FUJIFILM Diosynth Biotechnologies USA, Inc.
+Added: (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.
+Added: 14 Code of Conduct (Incorporated by reference to Exhibit 14 to the Company ’ s Annual Report on Form 10-K for the year ended December 31, 2021, filed on M arch 1, 2022 (File No.
21* Subsidiaries of the Company
13 unchanged sentences
NOVAVAX, INC.
−Removed: /s/ Stanley C.
President and Chief Executive Officer
2 unchanged sentences
Name Title Date
−Removed: /s/ Stanley C.
−Removed: Erck President and Chief Executive Officer and Director (Principal Executive Officer) February 28, 2022
+Added: Jacobs President and Chief Executive Officer and Director (Principal Executive Officer) February 28, 2023
Kelly Executive Vice President, Chief Financial Officer, and Treasurer (Principal Financial and Accounting Officer)
8 unchanged sentences
McGlynn Director February 28, 2023
−Removed: /s/ Michael A.
−Removed: McManus Director February 28, 2022
−Removed: Modi Director February 28, 2022
Mott Director February 28, 2023
+Added: /s/ Richard J.
+Added: Rodgers Director February 28, 2023
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
1 unchanged sentence
Reports of Independent Registered Public Accounting Firm (PCAOB ID:
−Removed: Consolidated Balance Sheets as of December 31, 202 1 and 20 20
Consolidated Statements of Operations and Statements of Comprehensive Loss for the years ended December 31, 2022, 2021, and 2020
+Added: Consolidated Balance Sheets as of December 31, 2022 and 2021
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2022, 2021, and 2020
10 unchanged sentences
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2023 expressed an unqualified opinion thereon.
+Added: The Company’s Ability to Continue as a Going Concern
+Added: The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
+Added: As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations, has a working capital deficiency, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.
+Added: Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2.
+Added: The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
10 unchanged sentences
Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the account or disclosures to which they relate.
−Removed: Revenue recognition related to the cost-based input method for U.S.
−Removed: government contracts
−Removed: Description of the Matter As described in Note 12 to the consolidated financial statements, the Company recorded approximately $811 million of revenue from U.S.
−Removed: government contracts to advance the clinical development and manufacturing of NVX-CoV2373 on a reimbursable-cost or reimbursable-cost-plus fixed fee basis.
−Removed: The Company measures progress toward satisfaction of its performance obligations using a cost-based input method that requires an estimate of total allowable cost at completion.
−Removed: Estimating the total allowable costs at completion is highly subjective.
−Removed: Changes in the estimated total allowable cost at completion could materially impact the timing of revenue recognition.
−Removed: Allowable contract costs include direct costs incurred on the contract and indirect costs that are applied in the form of rates to the direct costs.
−Removed: Auditing revenue recognition based on the cost-based input method involved subjective auditor judgment.
−Removed: The estimates of costs at completion are based on management’s assessment of the costs necessary to fulfill its performance obligations under the contracts.
−Removed: Auditing allowable contract costs was complex due to the specialized knowledge needed to evaluate the costs included in the calculation of indirect rates and the contract terms.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over recognition of revenue under the cost-based input method.
−Removed: For example, we tested controls over the appropriateness of significant assumptions regarding the estimation of allowable costs to be incurred for the performance obligations and controls over the appropriateness of the indirect rate calculation.
−Removed: To test the recognition of revenue under the cost-based input method, our audit procedures included among others, reviewing management’s estimate to total allowable costs at completion for consistency with contract terms, obtaining an understanding of the stage of completion through review of project deliverables, evidence of stage of completion including discussion with clinical research and manufacturing teams, and comparing actual results to prior management estimates.
−Removed: To test the recognition of revenue related to indirect rates, our audit procedures included among others, testing the allowability of the underlying costs used in the Company’s calculation of indirect rates.
−Removed: We utilized specialists to evaluate the treatment of significant indirect cost types.
−Removed: Identification of embedded leases related to manufacturing supply agreements
−Removed: Description of the Matter As described in Note 7 to the consolidated financial statements, the Company entered into multiple supply agreements with contract manufacturing organizations and contract development and manufacturing organizations.
−Removed: The Company determined that certain of these arrangements contain embedded leases as it has the exclusive use of, and control over, a portion of the manufacturing facility or equipment of the contract manufacturing organization during the contractual term of the arrangements.
−Removed: As a result of identifying embedded leases in certain of these arrangements, the Company immediately expensed approximately $ 144 million, which represented the right of use assets related to these arrangements that did not have an alternative future use.
−Removed: Auditing embedded leases within supply agreements was complex due to the judgment required to evaluate whether each arrangement included a lease and the related lease term.
−Removed: This significant auditor judgment involves the assessment of whether the Company has the right to obtain substantially all of the economic benefits from the use of identified assets and an assessment of the lease term, including whether the Company is reasonably certain not to exercise its termination provisions within the arrangements.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the identification of embedded leases in supply agreements.
−Removed: For example, we tested controls over management’s review of the supply agreements that evaluated whether management was entitled to substantially all of the economic benefits, as well as management’s assessment of the various termination provisions.
−Removed: To test the Company’s identification of embedded leases, our audit procedures included among others, reviewing the terms of supply agreements with contract manufacturing organizations, obtaining an understanding of the facilities and equipment subject to the arrangements through discussions with representatives of the counterparties, and evaluating the identification of embedded leases and determination of the lease term.
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.
+Added: Inventory Excess and Obsolescence Reserve
+Added: Description of the Matter As of December 31, 2022, the Company had $36.7 million of inventory.
+Added: As disclosed in Note 2, inventories are stated at the lower of cost or net realizable value.
+Added: The Company assesses its inventory levels each reporting period and writes down inventory that is either expected to be at risk of expiration prior to sale, or for which there are inventory quantities in excess of expected requirements.
+Added: For the year ended December 31, 2022, inventory write-downs were $447.6 million and losses on firm purchase commitments were $155.9 million.
+Added: Auditing management's estimates for excess and obsolete inventory involved subjective auditor judgment because the estimates rely on a number of factors that are affected by market and economic conditions outside the Company's control.
+Added: In particular, the obsolete and excess inventory calculations are sensitive to significant assumptions, including the expected demand for the Company’s products, assumptions about the vaccine’s life cycle, the effect on demand of competitive products and the Company's purchase commitments.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company's excess and obsolete inventory reserve process including management’s review of the significant assumptions described above and controls over the completeness and accuracy of the information used to develop the estimate.
+Added: Our substantive audit procedures included, among others, evaluating methodologies, assumptions and data utilized in the analysis for inventory expected to be at risk for expiration or excess.
+Added: We evaluated purchase commitments or alternative uses, compared forecasted demand to historical trends, compared actual inventory levels to forecasted demand requirements and evaluated the sensitivity of sales forecast assumptions on the amount of inventory reserves recorded.
/s/ Ernst & Young LLP
9 unchanged sentences
(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and our report dated February 28, 2022 expressed an unqualified opinion thereon.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and our report dated February 28, 2023 expressed an unqualified opinion that included an explanatory paragraph regarding the Company’s ability to continue as a going concern.
Basis for Opinion
18 unchanged sentences
NOVAVAX, INC.
+Added: CONSOLIDATED STATEMENTS OF OPERATIONS
+Added: (in thousands, except per share information)
+Added: Year Ended December 31,
+Added: 2022 2021 2020
+Added: Product sales $ 1,554,961 $ — $ —
+Added: Grants 382,921 948,709 453,210
+Added: Royalties and other 43,990 197,581 22,388
+Added: Total revenue 1,981,872 1,146,290 475,598
+Added: Cost of sales 902,639 — —
+Added: Research and development 1,235,278 2,534,508 747,027
+Added: Selling, general, and administrative 488,691 298,358 145,290
+Added: Total expenses 2,626,608 2,832,866 892,317
+Added: Loss from operations ( 644,736 ) ( 1,686,576 ) ( 416,719 )
+Added: Other income (expense):
+Added: Interest expense ( 19,880 ) ( 21,127 ) ( 15,145 )
+Added: Other income (expense) 10,969 ( 6,833 ) 13,605
+Added: Loss before income tax expense ( 653,647 ) ( 1,714,536 ) ( 418,259 )
+Added: Income tax expense 4,292 29,215 —
+Added: Net loss $ ( 657,939 ) $ ( 1,743,751 ) $ ( 418,259 )
+Added: Net loss per share:
+Added: Basic and diluted $ ( 8.42 ) $ ( 23.44 ) $ ( 7.27 )
+Added: Weighted average number of common shares outstanding:
+Added: Basic and diluted 78,183 74,400 57,554
+Added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
+Added: (in thousands)
+Added: Year Ended December 31,
+Added: 2022 2021 2020
+Added: Net loss $ ( 657,939 ) $ ( 1,743,751 ) $ ( 418,259 )
+Added: Other comprehensive income (loss):
+Added: Net unrealized gains (losses) on marketable securities available-for-sale, net of reclassifications — ( 9 ) 9
+Added: Foreign currency translation adjustment ( 5,024 ) ( 8,368 ) 19,523
+Added: Other comprehensive income (loss) ( 5,024 ) ( 8,377 ) 19,532
+Added: Comprehensive loss $ ( 662,963 ) $ ( 1,752,128 ) $ ( 398,727 )
+Added: The accompanying notes are an integral part of these financial statements.
+Added: NOVAVAX, INC.
CONSOLIDATED BALANCE SHEETS
2 unchanged sentences
Cash and cash equivalents $ 1,336,883 $ 1,515,116
−Removed: Marketable securities — 157,649
Restricted cash 10,303 11,490
Accounts receivable 82,375 454,993
+Added: Inventory 36,683 8,872
Prepaid expenses and other current assets 237,147 164,648
1 unchanged sentence
Property and equipment, net 294,247 225,741
−Removed: Intangible assets, net 4,770 5,725
+Added: Right of use asset, net 106,241 40,123
Goodwill 126,331 131,479
7 unchanged sentences
Current portion of finance lease liabilities 27,196 130,533
+Added: Convertible notes payable 324,881 —
Other current liabilities 930,055 36,061
5 unchanged sentences
Total liabilities 2,892,757 2,928,426
−Removed: Commitments and contingencies
+Added: Commitments and contingencies (Note 18)
Preferred stock, $ 0.01 par value, 2,000,000 shares authorized at December 31, 2022 and 2021;
7 unchanged sentences
( 90,659 ) ( 85,101 )
−Removed: Accumulated other comprehensive income (loss) ( 1,353 ) 7,024
+Added: Accumulated other comprehensive loss ( 6,377 ) ( 1,353 )
Total stockholders’ equity (deficit) ( 634,078 ) ( 351,673 )
2 unchanged sentences
NOVAVAX, INC.
−Removed: CONSOLIDATED STATEMENTS OF OPERATIONS
−Removed: (in thousands, except per share information)
−Removed: Year Ended December 31,
−Removed: 2021 2020 2019
−Removed: Grants $ 948,709 $ 453,210 $ 15,937
−Removed: Royalties and other 197,581 22,388 2,725
−Removed: Total revenue 1,146,290 475,598 18,662
−Removed: Research and development 2,534,508 747,027 113,842
−Removed: Gain on sale of assets — — ( 9,016 )
−Removed: General and administrative 298,358 145,290 34,417
−Removed: Total expenses 2,832,866 892,317 139,243
−Removed: Loss from operations ( 1,686,576 ) ( 416,719 ) ( 120,581 )
−Removed: Other income (expense):
−Removed: Investment income 1,364 1,014 1,512
−Removed: Interest expense ( 21,127 ) ( 15,145 ) ( 13,612 )
−Removed: Other income (expense) ( 8,197 ) 12,591 ( 13 )
−Removed: Loss before income tax expense ( 1,714,536 ) ( 418,259 ) ( 132,694 )
−Removed: Income tax expense 29,215 — —
−Removed: Net loss $ ( 1,743,751 ) $ ( 418,259 ) $ ( 132,694 )
−Removed: Basic and diluted net loss per share $ ( 23.44 ) $ ( 7.27 ) $ ( 5.51 )
−Removed: Basic and diluted weighted average number of common shares outstanding 74,400 57,554 24,100
−Removed: CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
−Removed: (in thousands)
−Removed: Year Ended December 31,
−Removed: 2021 2020 2019
−Removed: Net loss $ ( 1,743,751 ) $ ( 418,259 ) $ ( 132,694 )
−Removed: Other comprehensive income (loss):
−Removed: Net unrealized gains (losses) on marketable securities available-for-sale, net of reclassifications ( 9 ) 9 5
−Removed: Foreign currency translation adjustment ( 8,368 ) 19,523 ( 1,322 )
−Removed: Other comprehensive income (loss) ( 8,377 ) 19,532 ( 1,317 )
−Removed: Comprehensive loss $ ( 1,752,128 ) $ ( 398,727 ) $ ( 134,011 )
−Removed: The accompanying notes are an integral part of these financial statements.
−Removed: NOVAVAX, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
9 unchanged sentences
Balance at December 31, 2019 32,399,352 $ 324 $ 1,260,551 $ ( 1,431,801 ) $ ( 2,583 ) $ ( 12,508 ) $ ( 186,017 )
+Added: Preferred stock beneficial conversion feature — — 24,139 ( 24,139 ) — — —
+Added: Conversion of preferred stock 4,388,850 44 199,778 — — — 199,822
Stock-based compensation — — 128,035 — — — 128,035
Stock issued under incentive programs 2,168,725 22 44,447 — ( 39,223 ) — 5,246
−Removed: Fractional shares purchased in stock split — — — — ( 1 ) — ( 1 )
Issuance of common stock, net of issuance costs of $ 11,416
4 unchanged sentences
Balance at December 31, 2020 71,350,365 714 2,535,476 ( 1,874,199 ) ( 41,806 ) 7,024 627,209
−Removed: Preferred stock beneficial conversion feature
−Removed: — — 24,139 ( 24,139 ) — — —
−Removed: Conversion of preferred stock 4,388,850 44 199,778 — — — 199,822
Stock-based compensation — — 183,626 — — — 183,626
10 unchanged sentences
9,672,398 97 249,133 — — — 249,230
−Removed: Unrealized loss on marketable securities — — — — — ( 9 ) ( 9 )
Foreign currency translation adjustment — — — — — ( 5,024 ) ( 5,024 )
11 unchanged sentences
Depreciation and amortization 29,054 12,661 4,885
−Removed: Gain on sale of assets — — ( 9,016 )
−Removed: Right-of-use assets expensed 144,433 245,861 —
+Added: Right-of-use assets expensed, net of credits received 18,104 144,433 245,861
Non-cash stock-based compensation 130,300 183,626 128,035
+Added: Provision for excess and obsolete inventory 447,597 — —
Other items, net ( 21,903 ) ( 7,641 ) ( 15,080 )
Changes in operating assets and liabilities:
+Added: Inventory ( 477,801 ) ( 8,872 ) —
Accounts receivable, prepaid expenses, and other assets 249,166 ( 183,393 ) ( 422,689 )
−Removed: Accounts payable and accrued expenses 600,326 163,161 ( 11,485 )
+Added: Accounts payable, accrued expenses, and other liabilities 913,399 600,326 163,161
Deferred revenue ( 1,045,914 ) 1,325,557 271,545
2 unchanged sentences
Capital expenditures ( 89,056 ) ( 54,501 ) ( 54,473 )
+Added: Internal-use software ( 3,929 ) ( 2,985 ) ( 149 )
Acquisition of Novavax CZ, net of cash acquired — — ( 165,516 )
−Removed: Proceeds from sale of assets — — 18,333
Purchases of marketable securities — ( 2,167 ) ( 363,202 )
4 unchanged sentences
Net proceeds from sales of common stock 249,230 564,859 875,623
+Added: Proceeds from issuance of convertible notes 175,250 — —
+Added: Payments of costs related to issuance of convertible notes ( 5,258 ) — —
Net proceeds from the exercise of stock-based awards ( 639 ) 24,761 5,382
18 unchanged sentences
Novavax, Inc.
−Removed: (“Novavax,” and together with its wholly owned subsidiaries, including Novavax AB and Novavax CZ, the “Company”) is a biotechnology company that promotes improved global health through the discovery, development, and commercialization of innovative vaccines to prevent serious infectious diseases.
−Removed: The Company’s vaccine candidates, including both its coronavirus vaccine candidate, NVX-CoV2373, and its lead influenza vaccine candidate, NanoFlu, are genetically engineered, three-dimensional nanostructures of recombinant proteins critical to disease pathogenesis and may elicit differentiated immune responses, which may be more efficacious than naturally occurring immunity or traditional vaccines.
−Removed: NVX-CoV2373 and NanoFlu include the use of the Company's proprietary Matrix-M TM adjuvant.
−Removed: In December 2021, the Company was granted emergency use listing (“EUL”) for NVX-CoV2373 by the World Health Organization (“WHO”), to be marketed as Nuvaxovid TM in Europe and other markets and conditional marketing authorization for Nuvaxovid TM , which prequalifies NVX-CoV2373 as meeting WHO standards for quality, safety, and efficacy.
−Removed: The authorization follows the European Medicines Agency's (“EMA”) Committee for Medicinal Products for Human Use recommendation to authorize the vaccine and is applicable in all 27 European Union member states.
−Removed: During the fourth quarter of 2021, in partnership with Serum Institute of India Private Limited (“SIIPL”), the WHO granted EUL for NVX-CoV2373 to be manufactured and marketed by SIIPL as Covovax TM , the Drugs Controller General of India granted emergency use authorization (“EUA”) for NVX-CoV2373, which will be manufactured and marketed in India by SIIPL under the brand name Covovax TM , the National Agency of Drug and Food Control of the Republic of Indonesia, or Badan Pengawas Obat dan Makanan, granted EUA for NVX-CoV2373, to be manufactured and marketed in Indonesia by SIIPL under the brand name Covovax™, and the Philippine Food and Drug Administration granted EUA for NVX-CoV2373, to be manufactured and marketed in the Philippines by SIIPL under the brand name Covovax TM .
+Added: (“Novavax,” and together with its wholly owned subsidiaries, the “Company”) is a biotechnology company that promotes improved health globally through the discovery, development, and commercialization of innovative vaccines to prevent serious infectious diseases.
+Added: The Company’s COVID-19 vaccine NVX-CoV2373 (“Nuvaxovid™,” “Covovax™,” “Novavax COVID-19 Vaccine, Adjuvanted”);
+Added: influenza vaccine candidate;
+Added: COVID-19-Influenza Combination (“CIC”) vaccine candidate;
+Added: and additional vaccine candidates, including for Omicron subvariants and bivalent formulations with prototype vaccine (“NVX-CoV2373”), are genetically engineered nanostructures of conformationally correct recombinant proteins critical to disease pathogenesis and may elicit differentiated immune responses, which may be more efficacious than naturally occurring immunity or other vaccine approaches.
+Added: NVX-CoV2373 and the Company’s other vaccine candidates incorporate the Company's proprietary Matrix-M TM adjuvant to enhance the immune response and stimulate higher levels of functional antibodies and induce a cellular immune response.
+Added: The Company has announced data from its ongoing PREVENT-19 study supporting the use of NVX-CoV2373 for homologous boosting in adults and adolescents aged 12 through 17.
+Added: Additional findings in Phase 3 COVID-19 Omicron (study 311) trial showed utility of the prototype vaccine as a heterologous booster, inducing broad immune responses against contemporary Omicron variants.
+Added: As of December 31, 2022, the Company had received approval, interim authorization, provisional approval, conditional marketing authorization, and emergency use authorization (“EUA”) from multiple regulatory authorities globally for NVX-CoV2373 for both adult and adolescent populations as a primary series and for both homologous and heterologous booster indications.
+Added: The Company commenced commercial shipments of NVX-CoV2373 doses under the name “Novavax COVID-19 Vaccine, Adjuvanted” and the brand name “Nuvaxovid™” in 2022.
Note 2 – Summary of Significant Accounting Policies
1 unchanged sentence
The consolidated financial statements include the accounts of Novavax, Inc.
−Removed: and its wholly owned subsidiaries, including Novavax AB and Novavax CZ.
+Added: and its wholly owned subsidiaries.
All intercompany accounts and transactions have been eliminated in consolidation.
+Added: Liquidity and Going Concern
+Added: The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern within one year after the date that the financial statements are issued.
+Added: At December 31, 2022, the Company had $ 1.3 billion in cash and cash equivalents and restricted cash, of which $ 236.2 million was raised in December 2022 through concurrent sales of common stock and issuance of the Company’s convertible senior unsecured notes that will mature on December 15, 2027 (see Notes 11 and 13).
+Added: On January 31, 2023, the Company funded the outstanding principal amount of $ 325.0 million on the Company’s convertible senior unsecured notes that matured on February 1, 2023.
+Added: During 2022, the Company incurred a net loss of $ 657.9 million and had net cash flows used in operating activities of $ 415.9 million.
+Added: While the Company’s current cash flow forecast for the one-year going concern look forward period estimates that there will be sufficient capital available to fund operations, this forecast is subject to significant uncertainty, including as it relates to 2023 revenue, funding from the U.S.
+Added: government, and pending arbitration.
+Added: The Company’s 2023 revenue depends on its ability to successfully develop, manufacture, distribute, or market an updated monovalent or bivalent formulation of a vaccine candidate for COVID-19 for the fall 2023 COVID vaccine season, which is inherently uncertain and subject to a number of risks, including regulatory approval.
+Added: In February 2023, in connection with the execution of Modification 17 to the USG Agreement (as defined in Note 3), the U.S.
+Added: government indicated to the Company that the award may not be extended past its current period of performance.
+Added: If the USG Agreement is not amended, as the Company’s management had previously expected, then the Company may not receive all of the remaining $ 416 million in funding that was previously anticipated pursuant to the USG Agreement.
+Added: On January 24, 2023, Gavi, the Vaccine Alliance (“Gavi”) filed a demand for arbitration with the International Court of Arbitration regarding an alleged material breach by the Company of the Company’s advance purchase agreement with Gavi (“the Gavi APA”).
+Added: The outcome of that arbitration is inherently uncertain, and it is possible the Company could be required to refund all or a portion of the remaining advance payments of $ 697.4 million (see Note 3 and Note 18).
+Added: Management believes that, given the significance of these uncertainties, substantial doubt exists regarding the Company’s ability to continue as a going concern through one year from the date that these financial statements are issued.
+Added: The Company’s ability to fund Company operations is dependent upon revenue related to vaccine sales for its products and product candidates, if such product candidates receive marketing approval and are successfully commercialized;
+Added: the resolution of certain matters, including whether, when, and how the dispute with Gavi is resolved;
+Added: and management’s plans, which include resolving the dispute with Gavi and may include raising additional capital through a combination of equity and debt financing, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements.
+Added: New financings may not be available to the Company on commercially acceptable terms, or at all.
+Added: Also, any collaborations, strategic alliances, and marketing, distribution, or licensing arrangements may require the Company to give up some or all of its rights to a product or technology, which in some cases may be at less than the full potential value of such rights.
+Added: In addition, the regulatory and commercial success of NVX-CoV2373 and the Company’s other vaccine candidates, including an influenza vaccine candidate, CIC vaccine candidate, or a COVID-19 variant strain-containing monovalent or bivalent formulation, remains uncertain.
+Added: If the Company is unable to obtain additional capital, the Company will assess its capital resources and may be required to delay, reduce the scope of, or eliminate some or all of its operations, or downsize its organization, any of which may have a material adverse effect on its business, financial condition, results of operations, and ability to operate as a going concern.
Reclassifications
1 unchanged sentence
These reclassifications have no material effect on previously reported financial position, cash flows, or results of operations.
−Removed: The Company combined amounts previously reported as Government contracts revenue of $ 217.2 million and Grants revenue of $ 236.0 million for the year ended December 31, 2020, and Government contracts revenue of $ 7.5 million and Grants revenue of $ 8.4 million for the year ended December 31, 2019 into a single financial statement line item, Grants, in the consolidated statements of operations.
−Removed: Other revenue of $ 22.4 million for the year ended December 31, 2020, and $ 2.7 million for the year ended December 31, 2019 was reclassified to Royalties and other.
Use of Estimates
1 unchanged sentence
GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.
+Added: Estimates are used for, but not limited to, revenue recognition, inventory, research and development expenses, stock-based compensation, useful lives of long-lived assets, leases, and income taxes.
Actual results could differ materially from those estimates.
−Removed: Cash and Cash Equivalents
−Removed: Cash and cash equivalents consist of highly liquid investments with maturities of three months or less from the date of purchase.
−Removed: Cash and cash equivalents consist of the following (in thousands):
−Removed: Cash $ 96,372 $ 122,312
−Removed: Money market funds 361,822 96,116
−Removed: Government-backed securities 266,250 44,250
−Removed: Treasury securities — 44,052
−Removed: Corporate debt securities 790,672 246,668
−Removed: Cash and cash equivalents $ 1,515,116 $ 553,398
−Removed: Cash equivalents are recorded at cost, which approximate fair value due to their short-term nature.
−Removed: Marketable Securities
−Removed: Marketable securities consist of debt securities with maturities greater than three months from the date of purchase that have historically included commercial paper, government-backed securities, treasury securities, corporate notes, and agency securities.
−Removed: Classification of marketable securities between current and non-current is dependent upon the maturity date at the balance sheet date taking into consideration the Company’s ability and intent to hold the investment to maturity.
−Removed: Interest and dividend income are recorded when earned and included in investment income in the consolidated statements of operations.
−Removed: Premiums and discounts, if any, on marketable securities are amortized or accreted to maturity and included in investment income in the consolidated statements of operations.
−Removed: The specific identification method is used in computing realized gains and losses on the sale of the Company’s securities.
−Removed: The Company classifies its marketable securities with readily determinable fair values as “available-for-sale.” Investments in securities that are classified as available-for-sale are measured at fair market value in the consolidated balance sheets, and unrealized gains and losses on marketable securities are reported as a separate component of stockholders’ equity (deficit) until realized.
−Removed: Marketable securities are evaluated periodically to determine whether a decline in value is “other-than-temporary.” The term “other-than-temporary” is not intended to indicate a permanent decline in value.
−Removed: Rather, it means that the prospects for a near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security.
−Removed: Management reviews criteria, such as the magnitude and duration of the decline, as well as the Company’s ability to hold the securities, including whether the Company will be required to sell a security prior to recovery of its amortized cost basis, the investment issuer’s financial condition and business outlook to predict whether the loss in value is other-than-temporary.
−Removed: If a decline in value is determined to be other-than-temporary, the value of the security is reduced and the impairment is recorded as other income (expense) in the consolidated statements of operations.
−Removed: Fair Value Measurements
−Removed: The Company applies Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), for financial and non-financial assets and liabilities.
−Removed: ASC 820 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).
−Removed: The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.
−Removed: The following is a brief description of those three levels:
−Removed: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
−Removed: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.
−Removed: These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
−Removed: Unobservable inputs that reflect the reporting entity’s own assumptions.
−Removed: Restricted Cash
−Removed: The Company’s current and non-current restricted cash includes payments received under the Coalition for Epidemic Preparedness Innovations (“CEPI”) funding agreements, payments received under the Bill & Melinda Gates Foundation (“BMGF”) grant agreements, and cash collateral accounts under letters of credit that serve as security deposits for certain facility leases.
−Removed: CEPI and BMGF funds become unrestricted as the Company incurs expenses for services performed under these agreements.
−Removed: As of December 31, 2021 and 2020, the restricted cash balances (both current and non-current) consisted primarily of $ 10.4 million and $ 92.4 million, respectively, of payments under the CEPI funding agreements.
−Removed: The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):
−Removed: Cash and cash equivalents $ 1,515,116 $ 553,398
−Removed: Restricted cash current 11,490 93,880
−Removed: Restricted cash non-current (1) 1,653 1,460
−Removed: Cash, cash equivalents and restricted cash $ 1,528,259 $ 648,738
−Removed: (1) Classified as Other non-current assets as of December 31, 2021 and 2020
−Removed: Accounts Receivable
−Removed: The Company recognizes amounts due from customers as accounts receivable when its right to payment is unconditional.
−Removed: The Company has evaluated outstanding receivables to assess collectability, with consideration given to economic conditions, the aging of receivables, and customer-specific risks.
−Removed: There was no allowance for doubtful accounts as of December 31, 2021, and 2020.
−Removed: There was no bad debt expense for the years ended December 31, 2021, 2020 or 2019.
−Removed: Concentration of Credit Risk
−Removed: Financial instruments expose the Company to concentration of credit risk and consist primarily of cash and cash equivalents and marketable securities.
−Removed: The Company’s investment policy limits investments to certain types of instruments, including asset-backed securities, high-grade corporate debt securities, and money market funds, places restrictions on maturities and concentrations in certain industries and requires the Company to maintain a certain level of liquidity.
−Removed: At times, the Company maintains cash balances in financial institutions, which may exceed federally insured limits.
−Removed: The Company has not experienced any losses relating to such accounts and believes it is not exposed to a significant credit risk on its cash and cash equivalents.
−Removed: The Company's accounts receivable arise from revenue arrangements with customers in different countries.
−Removed: The Company's revenue is primarily due to grants made by government-sponsored and private organizations, as well as royalties from our collaboration and license partners.
−Removed: The following entities accounted for more than 10% of total revenue or accounts receivable for the periods presented:
−Removed: Percentage of Revenue
−Removed: for Year Ended December 31, Percentage of Accounts Receivable as of December 31,
−Removed: 2021 2020 2019 2021 2020
−Removed: government (a) 71 % 46 % 40 % * 78 %
−Removed: CEPI 12 % 47 % * * *
−Removed: SK bioscience, Co., Ltd.
−Removed: Gavi, the Vaccine Alliance * * * 77 % *
−Removed: Government of New Zealand * * * * 17 %
−Removed: *Amounts represent less than 10%
−Removed: (a) Including U.S.
−Removed: government partnership formerly known as Operation Warp Speed, Department of Defense, and Biomedical Advanced Research and Development Authority
−Removed: Pre-Launch Inventory
−Removed: Prior to initial regulatory authorizations for its product candidates, the Company expenses costs relating to raw materials and inventory production as research and development expenses in the consolidated statements of operations, in the period incurred.
−Removed: The Company capitalizes the costs of production as inventory when regulatory authorization and subsequent commercialization are considered probable and the Company expects to realize future economic benefit from the sales of the product candidate.
−Removed: Upon the authorization of distribution and use of NVX-CoV2373 following regulatory authorizations by EMA and the WHO in December 2021, the Company began to capitalize inventory costs associated with the related supply of NVX-CoV2373, as it was determined that inventory costs subsequently incurred had a probable future economic benefit.
−Removed: Property and Equipment
−Removed: Property and equipment are stated at cost, net of accumulated depreciation.
−Removed: and are depreciated using the straight-line method over the estimated useful lives of the assets.
−Removed: Repairs and maintenance costs are expensed as incurred.
−Removed: The estimated useful lives of property and equipment are described below:
−Removed: Buildings 25 years
−Removed: Machinery and equipment 5 - 7 years
−Removed: Computer hardware 3 years
−Removed: Leasehold improvements Shorter of useful life or remaining term of the lease
−Removed: Lease Accounting
−Removed: The Company enters into manufacturing supply agreements with contract manufacturing organizations (“CMO”) and contract development and manufacturing organizations (“CDMO”) to manufacture its vaccine candidates.
−Removed: Certain of these manufacturing supply agreements include the use of identified manufacturing facilities and equipment that are controlled by the Company and for which the Company obtains substantially all the output and may qualify as an embedded lease.
−Removed: The Company treats manufacturing supply agreements that contain a lease as lease arrangements in their entirety.
−Removed: The evaluation of leases that are embedded in the Company’s CMO and CDMO agreements is complex and requires judgment in determining whether the contract, either explicitly or implicitly, is for the use of an identified asset and the Company has the right to direct the use of, and obtain substantially all of the benefit from, the identified asset which generally, is the use of a portion of the manufacturing facility of the CMO or CDMO, whether the Company has the right to direct the use of, and obtain substantially all of the benefit from, the identified asset, the term of the lease, and the fixed lease payments under the contract.
−Removed: Depending on the contract, the lease commencement date, defined as the date on which the lessor makes the underlying asset available for use by the lessee and is the date on which the Company is required to accrue lease expenses, may be different than the inception date of the contract.
−Removed: The Company determines the non-cancellable lease term of its embedded leases based on the impact of certain expected milestones on its option to terminate the lease where it is reasonably certain to not exercise that option.
−Removed: The Company evaluates changes to the terms and conditions of a lease contract to determine if they result in a new lease or a modification of an existing lease.
−Removed: For lease modifications, the Company remeasures and reallocates the remaining consideration in the contract and reassesses the lease classification at the effective date of the modification.
−Removed: Leases are classified as either operating or finance leases based on the economic substance of the agreement.
−Removed: The Company also enters into non-cancelable lease agreements for facilities and certain equipment.
−Removed: For leases that have a lease term of more than 12 months at the lease commencement date, the Company recognizes lease liabilities, which represent the Company’s obligation to make lease payments arising from the lease, and corresponding right-of-use (“ROU”) assets, which represent the right to use an underlying asset for the lease term, based on the present value of the fixed future payments over the lease term.
−Removed: The Company calculates the present value of future payments using the discount rate implicit in the lease, if available, or the Company’s incremental borrowing rate.
−Removed: For all leases that have a lease term of 12 months or less at the commencement date (referred to as “short-term” leases), the Company has elected to apply the practical expedient in ASC Topic 842, Leases (“ASC 842”), to not recognize a lease liability or ROU asset but, instead, recognize lease payments as an expense on a straight-line basis over the lease term and variable lease payments that do not depend on an index or rate as an expense in the period in which the variable lease costs are incurred based on performance or usage in accordance with contractual agreements.
−Removed: In determining the lease period, the Company evaluates facts and circumstances that could affect the period over which it is reasonably certain to use the underlying asset while taking into consideration the non-cancelable period over which it has the right to use the underlying asset and any option period to extend or terminate the lease if it is reasonably certain to exercise the option.
−Removed: The Company re-evaluates short-term leases that are modified and if they no longer meet the requirements to be treated as a short-term lease, recognizes and measures the lease
−Removed: liability and ROU asset as if the date of the modification is the lease commencement date.
−Removed: For short-term leases that are modified and continue to meet the requirements to be treated as a short-term lease, the Company remeasures the fixed lease payments under the modified lease and recognize lease payments as an expense on a straight-line basis over the modified lease term.
−Removed: For operating leases, the Company recognizes lease expense related to fixed payments on a straight-line basis over the lease term and lease expense related to variable payments as incurred based on performance or usage in accordance with the contractual agreements.
−Removed: For finance leases, the Company recognizes the amortization of the ROU asset over the shorter of the lease term or useful life of the underlying asset.
−Removed: The Company expenses ROU assets acquired for research and development activities under ASC Topic 730, Research and Development , if they do not have an alternative future use, in research and development projects or otherwise.
−Removed: The Company uses significant assumptions and judgment in evaluating its lease contracts and other agreements under ASC 842, including the determination of whether an agreement is or contains a lease, whether a change in the terms and conditions of a lease contract represent a new or modified lease, whether a lease represents an operating or finance lease, the discount rate used to determine the present value of lease obligations, and the term of a lease embedded in its manufacturing supply agreements.
−Removed: Intangible Assets
−Removed: The Company’s intangible assets include proprietary adjuvant technology and collaboration agreements, which were measured at the estimated fair values as of their acquisition dates.
−Removed: Amortization expense for intangible assets is recorded on a straight-line basis over the expected useful lives of the assets, ranging from 7 years to 20 years.
−Removed: Impairment of Long-Lived Assets
−Removed: Long-lived assets, including property and equipment and finite-lived intangible and right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable based on the criteria for accounting for the impairment or disposal of long-lived assets under ASC Topic 360, Property, Plant and Equipment.
−Removed: The Company calculates the estimated fair value of a long-lived asset (group) using the income approach.
−Removed: Impairment losses are recognized when the sum of expected future cash flows is less than the assets’ (group’s) carrying value.
−Removed: Goodwill is subject to impairment tests annually or more frequently should indicators of impairment arise.
−Removed: The Company has determined that, because its only business is the development of recombinant vaccines, it operates as a single operating segment and has one reporting unit.
−Removed: The Company primarily utilizes the market approach and, if considered necessary, the income approach to determine if it has an impairment of its goodwill.
−Removed: The market approach is based on market value of invested capital.
−Removed: To ensure that the Company’s capital stock is the appropriate measurement of fair value, the Company considers factors such as its trading volume, diversity of investors, and analyst coverage.
−Removed: If considered necessary, the income approach is used to corroborate the results of the market approach.
−Removed: Goodwill impairment may exist if the carrying value of the reporting unit exceeds its estimated fair value.
−Removed: If the carrying value of the reporting unit exceeds its fair value, step two of the impairment analysis is performed.
−Removed: In step two of the analysis, an impairment loss is recorded equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value, should such a circumstance arise.
−Removed: At October 1, 2021 and 2020, the fair value of the Company’s single reporting unit was substantially higher than its carrying value, resulting in no impairment to goodwill as of October 1, 2021 and 2020.
Revenue Recognition
At contract inception, the Company analyzes its revenue arrangements to determine the appropriate accounting under U.S.
−Removed: Currently, the Company’s revenue arrangements represent customer contracts within the scope of ASC Topic 606, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), or are subject to the contribution guidance in ASC Topic 958-605, Not-for-Profit Entities – Revenue Recognition (“ASC 958-605”), which applies to business entities that receive contributions within the scope of ASC 958-605.
+Added: Currently, the Company’s revenue arrangements represent customer contracts within the scope of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), or are contributions subject to the guidance in ASC Topic 958-605, Not-for-Profit Entities – Revenue Recognition (“ASC 958-605”).
The Company recognizes revenue from arrangements within the scope of ASC 606 following the five-step model:
4 unchanged sentences
and (v) recognize revenue when (or as) it satisfies a performance obligation.
−Removed: The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it
−Removed: transfers to its customer.
+Added: The Company only recognizes revenue under the five-step model when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to its customer.
The Company recognizes contribution revenue within the scope of ASC 958-605 when the funder-imposed conditions have been substantially met.
Contributions are recorded as deferred revenue until the period in which research and development activities are performed that satisfy the funder-imposed conditions.
−Removed: Grant revenue includes both revenue from government contracts and grants from organizations such as CEPI.
+Added: Product Sales
+Added: Product sales are associated with the Company’s NVX-CoV2373 supply agreements, sometimes referred to as advance purchase agreements (“APAs”), with various international governments.
+Added: The Company recognizes revenue from product sales based on the transaction price per dose calculated in accordance with ASC 606 at the point in time when control of the product transfers to the customer and customer acceptance has occurred, unless such acceptance provisions are deemed perfunctory.
+Added: If an APA includes a term that may have the effect of decreasing the price per dose of previously delivered shipments, the Company constrains the price until it is probable that a significant reversal in revenue recognized will not occur.
+Added: Grant revenue includes both revenue from government contracts and grants from organizations such as the Coalition for Epidemic Preparedness Innovations (“CEPI”).
The Company performs research and development under government funding, grant, license, and clinical development agreements.
1 unchanged sentence
government contracts and other arrangements to advance the clinical development and manufacturing of NVX-CoV2373.
−Removed: The Company’s U.S.
−Removed: government contracts are with the U.S.
−Removed: Department of Defense (the “DoD”) and the U.S.
−Removed: government partnership formerly known as Operation Warp Speed (“OWS”) (see Note 12).
−Removed: Other funding arrangements primarily include a grant and forgivable loan funding from CEPI (see Note 12).
Under the U.S.
13 unchanged sentences
These changes reflect the difference between actual indirect costs incurred compared to the estimated amounts used to determine the provisional indirect billing rates agreed upon with the U.S.
−Removed: The Company recognizes revenue on the U.S government contracts based on reimbursable allowable contract costs incurred in the period up to the transaction price.
+Added: The Company recognizes revenue on the U.S.
+Added: government contracts based on reimbursable allowable contract costs incurred in the period up to the transaction price.
For cost-reimbursable-plus-fixed-fee contracts, the Company recognizes the fixed-fee based on the proportion of reimbursable contract costs incurred to total estimated allowable contract costs expected to be incurred on completion of the underlying performance obligation as determined under the EAC process.
2 unchanged sentences
The Company’s other funding agreements currently include funding from CEPI in the form of a grant (“CEPI Grant Funding”) and one or more forgivable no interest term loans (“CEPI Forgivable Loan Funding”).
−Removed: Under the Company’s grant funding arrangements, currently including the CEPI and BMGF arrangements, the Company is primarily entitled to reimbursement for costs that support development related activities of NVX-CoV2373.
+Added: Under the Company’s grant funding arrangements, including the CEPI arrangement, the Company is primarily entitled to reimbursement for costs that support development related activities of NVX-CoV2373.
The Company analyzed these other funding arrangements and determined that they are not within the scope of ASC 606 as they do not provide a direct economic benefit to the grantor.
Payments received under the grant funding arrangements are considered conditional contributions under the scope of ASC 958-605 and are recorded as deferred revenue until the period in which such research and development activities are actually performed in a manner that satisfies the funder-imposed conditions.
−Removed: Payments received under the CEPI Forgivable Loan Funding agreement are only repayable if the proceeds of sales to one or more third parties of NVX-CoV2373 cover the Company’s costs of manufacturing such vaccine candidate, not including manufacturing costs funded by CEPI.
+Added: Payments received under the CEPI Forgivable Loan Funding are only repayable if NVX-CoV2373 manufactured by the contract manufacturing organization (“CMO”) network funded by CEPI is sold to one or more third parties (which would have previously included, but is not limited to, any sales under the Company’s Gavi APA prior to its termination), and such sales cover the Company’s costs of manufacturing such vaccine, not including manufacturing costs funded by CEPI.
As the financial risk remains with CEPI, the Company determined that the use of the funds from the CEPI agreement is outside the scope of ASC Topic 470, Debt .
The research and development risk was considered substantive, such that it was not probable that the development would be successful at the inception of the contract.
−Removed: Therefore, the Company concluded that ASC 730 was considered applicable and most appropriate.
+Added: Therefore, the Company concluded that ASC Topic 730, Research and Development (“ASC 730”) was considered applicable and most appropriate.
Given the financial risk associated with the research and development activities lies with CEPI because repayment of any funds provided by CEPI depends solely on the results of the research and development activities having future economic benefit, the Company has accounted for the obligation under the CEPI Forgivable Loan Funding as a contract to perform research and development for others.
−Removed: The Company has determined that payments received under these agreements should be recorded as revenue under ASC 958-605 rather than a reduction to research and development
+Added: The Company has determined that payments received under these agreements should be recorded as revenue under ASC 958-605 rather than a reduction to research and development expenses.
This is consistent with the Company’s policy of presenting such amounts as revenue.
−Removed: In reaching this determination, the Company considered a number of factors, including whether it is principal under the arrangement, and whether the arrangement is significant to, and part of, the Company’s core operations.
+Added: In reaching this determination, the
+Added: Company considered a number of factors, including whether it is principal under the arrangement, and whether the arrangement is significant to, and part of, the Company’s core operations.
The Company will record revenue as it performs the contractual research and development services.
+Added: Payments received in advance related to arrangements where revenue is recognized under ASC 958-605 that are related to future performance are deferred and recognized as revenue when the research and development activities are performed.
+Added: Such cash payments are restricted as to their use and are reflected in Restricted cash until expenditures contemplated in the funding agreements are incurred.
Royalties and Other
−Removed: The Company also has various arrangements that include a right for a third party to use the Company's intellectual property as a functional license.
+Added: The Company also has various arrangements that include a right for a customer to use the Company's intellectual property as a functional license, where the Company’s performance obligation is satisfied at the point in time at which the license is granted.
These licensing arrangements include sales-based royalties, certain development and commercial milestone payments, and the sale of proprietary Matrix-M TM adjuvant.
−Removed: The license is deemed to be the predominant item to which the sales-based royalties or milestone payments relate.
−Removed: Because development milestone payments are contingent on the achievement of milestones, such as regulatory approvals, that are not within the Company or licensee's control, the payments are not considered probable of being achieved and are excluded from the transaction price until the milestone is achieved.
−Removed: The Company recognizes revenue when the development milestone is achieved.
−Removed: For arrangements that include sales-based royalties, including milestone payments based upon the achievement of a certain level of product sales, wherein the license is deemed to be the sole or predominant item, the Company recognizes revenue on the satisfaction (or partial satisfaction) of the performance obligation, which is when the related sales occur.
+Added: Because development milestone payments are contingent on the achievement of milestones, such as regulatory approvals, that are not within the Company or licensee's control, the payments are not considered probable of being achieved and are excluded from the transaction price until the milestone is achieved, at which point the Company recognizes revenue.
+Added: For arrangements that include sales-based royalties related to a previously granted license, including milestone payments based upon the achievement of a certain level of product sales, the license is deemed to be the sole or predominant item to which the royalties relate and the Company recognizes revenue when the related sales occur.
The Company allocates the transaction price to each performance obligation based on a relative standalone selling price basis.
It develops assumptions that require judgment to determine the standalone selling price for each performance obligation in consideration of applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer.
+Added: Cost of Sales
+Added: Cost of sales includes cost of raw materials, production, and manufacturing overhead costs associated with the Company’s product sales during the period.
+Added: Cost of sales also includes adjustments for excess, obsolete, or expired inventory;
+Added: idle capacity;
+Added: and losses on firm purchase commitments to the extent the cost cannot be recovered based on estimates about future demand.
+Added: Cost of sales does not include certain expenses related to raw materials, production, and manufacturing overhead costs that were expensed prior to regulatory authorization as described under the caption “Inventory.”
Research and Development Expenses
−Removed: Research and development expenses include salaries, stock-based compensation, laboratory supplies, consultants and subcontractors, including external contract research organizations (“CROs”), CMOs, and CDMOs and other expenses associated with the Company’s process development, manufacturing, clinical, regulatory, and quality assurance activities for its clinical development programs.
+Added: Research and development expenses include salaries;
+Added: stock-based compensation;
+Added: laboratory supplies;
+Added: consultants and subcontractors, including external contract research organizations (“CROs”), CMOs, and contract development and manufacturing organizations (“CDMOs”);
+Added: and other expenses associated with the Company’s process development, manufacturing, clinical, regulatory, and quality assurance activities for its clinical development programs.
In addition, related indirect costs such as fringe benefits and overhead expenses are also included in research and development expenses.
3 unchanged sentences
The Company accrues research and development expenses, including clinical trial-related expenses, as the services are performed, which may include estimates of those expenses incurred, but not invoiced.
−Removed: The Company uses information provided by third-party service providers and CROs, CMOs, and CDMOs invoices and internal estimates to determine the progress of work performed on the Company’s behalf.
−Removed: Assumptions based on clinical trial protocols, contracts, and participant enrollment data are also developed to determine and analyze these estimates and accruals.
+Added: The Company uses information provided by third-party service providers and CRO, CMO, and CDMO invoices and internal estimates to determine the progress of work performed on the Company’s behalf.
+Added: Assumptions based on clinical trial protocols, contracts, and participant enrollment data are also used to estimate these accruals.
+Added: Advertising Costs
+Added: Advertising costs are expensed as incurred.
+Added: The Company had advertising costs of $ 84.0 million and $ 8.9 million during the years ended December 31, 2022 and 2021, respectively.
Stock-Based Compensation
−Removed: The Company accounts for stock-based compensation related to grants of stock options, stock appreciation rights, restricted stock awards, and purchases under the Company’s Employee Stock Purchase Plan, as amended and restated (the “ESPP”), at fair value.
+Added: The Company accounts for stock-based compensation related to grants of stock options, stock appreciation rights (“SARs”), and restricted stock awards (“RSUs”), and purchases under the Company’s Employee Stock Purchase Plan (“ESPP”), at fair value.
The Company recognizes compensation expense related to such awards on a straight-line basis over the requisite service period (generally the vesting period) of the equity awards, based on the award's fair value at the grant date.
1 unchanged sentence
Forfeitures for all awards are recognized as incurred.
−Removed: The expected term of stock options and stock appreciation rights granted is based on the Company’s historical option exercise experience and post-vesting forfeiture experience using the historical expected term from the vesting date, whereas the expected term for purchases under the ESPP is based on the purchase periods included in the offering.
+Added: The Company generally settles stock-based awards with newly issued shares.
+Added: The fair value of stock options and SARs is measured on the date of grant using the Black-Scholes option pricing model.
+Added: The expected term of stock options and SARs is based on the Company’s historical option exercise experience and post-vesting forfeiture experience using the historical expected term from the vesting date, and the expected term for purchases under the ESPP is based on the purchase periods included in the offering.
The expected volatility is determined using historical volatilities based on stock prices over a look-back period corresponding to the expected term.
1 unchanged sentence
government issues with a remaining term equal to the expected term.
−Removed: The Company has never paid a dividend, and as such, the dividend yield is zero, and the Company does not intend to pay dividends in the foreseeable future.
−Removed: See Note 13 for a further discussion on stock-based compensation.
+Added: The Company has never paid a dividend and the Company does not intend to pay dividends in the foreseeable future, and as such, the expected dividend yield is zero.
+Added: Cash and Cash Equivalents
+Added: Cash and cash equivalents consist of highly liquid investments with maturities of three months or less from the date of purchase.
+Added: Cash equivalents are recorded at cost, which approximate fair value due to their short-term nature.
+Added: Fair Value Measurements
+Added: The Company applies ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), for financial and non-financial assets and liabilities.
+Added: ASC 820 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).
+Added: The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.
+Added: The following is a brief description of those three levels:
+Added: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
+Added: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.
+Added: These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
+Added: Unobservable inputs that reflect the reporting entity’s own assumptions.
+Added: Restricted Cash
+Added: The Company’s current and non-current restricted cash includes payments received under grant agreements and cash collateral accounts under letters of credit that serve as security deposits for certain facility leases.
+Added: Payments received under grant agreements become unrestricted as the Company incurs expenses for services performed under these agreements.
+Added: As of December 31, 2022 and 2021, the restricted cash balances (both current and non-current) consisted primarily of payments under the CEPI funding agreements.
+Added: Accounts Receivable
+Added: The Company recognizes amounts due from customers as accounts receivable when its right to payment is unconditional.
+Added: The Company evaluates outstanding receivables to assess collectability, with consideration given to economic conditions, the aging of receivables, and customer-specific risks.
+Added: Concentration of Risk
+Added: Financial instruments expose the Company to concentration of credit risk and consist primarily of cash and cash equivalents.
+Added: The Company’s investment policy limits investments to certain types of instruments, including asset-backed securities, high-grade corporate debt securities, and money market funds;
+Added: places restrictions on maturities and concentrations in certain industries;
+Added: and requires the Company to maintain a certain level of liquidity.
+Added: At times, the Company maintains cash balances in financial institutions that may exceed federally insured limits.
+Added: The Company has not experienced any losses relating to such accounts and believes it is not exposed to a significant credit risk on its cash and cash equivalents.
+Added: The Company's accounts receivable arise from revenue arrangements with customers in different countries.
+Added: The Company's revenue is primarily due to product sales, grants made by government-sponsored and private organizations, and royalties from its collaboration and license partners.
+Added: The following customers accounted for more than 10% of total revenue or accounts receivable for the periods presented:
+Added: Percentage of Revenue
+Added: for Year Ended December 31, Percentage of Accounts Receivable as of December 31,
+Added: 2022 2021 2020 2022 2021
+Added: European Commission 40 % * * 10 % *
+Added: Government of Australia 21 % * * * *
+Added: Government of Canada 10 % * * * *
+Added: Government of Israel * * * 21 % *
+Added: Gavi, the Vaccine Alliance * * * * 77 %
+Added: government (1)
+Added: 19 % 71 % 46 % 46 % *
+Added: CEPI * 12 % 47 % * *
+Added: SK bioscience, Co., Ltd.
+Added: *Amounts represent less than 10%
+Added: (1) Including the USG Agreement (as defined in Note 3) and Department of Defense.
+Added: The Company currently depends exclusively on a single supplier for co-formulation, filling, and finishing NVX-CoV2373.
+Added: The loss of this supplier could prevent or delay the Company’s delivery of customer orders.
+Added: Inventory is recorded at the lower of cost or net realizable value under the First In, First Out methodology, taking into consideration the expiration of the inventory item.
+Added: The Company determines the cost of raw materials using moving average costs and the cost of semi-finished and finished goods using a standard cost method adjusted on a periodic basis to reflect the deviation in the actual cost from the standard cost estimate.
+Added: Standard costs consist primarily of the cost of manufacturing goods, including direct materials, direct labor, and the services and products of third-party suppliers.
+Added: Manufacturing overhead costs are applied to semi-finished and finished goods based on expected production levels.
+Added: The Company utilizes third-party CMOs, CDMOs, and other suppliers and service organizations to support the procurement and processing of raw materials, management of inventory, packaging, and the delivery process.
+Added: Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolete, or expired inventory through cost of sales.
+Added: At each reporting period, the Company assesses whether there are excess firm, non-cancelable, purchase commitment liabilities, resulting from supply agreements with third-party CMOs and CDMOs.
+Added: The determination of net realizable value of inventory and firm purchase commitment liabilities requires judgment, including consideration of many factors, such as estimates of future product demand, current and future market conditions, potential product obsolescence, expiration and utilization of raw materials under firm purchase commitments, and contractual minimums.
+Added: Prior to initial regulatory authorization for its product candidates, the Company expenses costs relating to raw materials, production, and manufacturing overhead costs as research and development expenses in the consolidated statements of operations, in the period incurred.
+Added: Subsequent to initial regulatory authorization for a product candidate, the Company capitalizes the costs of production for a particular supply chain as inventory when the Company determines that it has a present right to the economic benefit associated with the product.
+Added: Property and Equipment
+Added: Property and equipment are stated at cost, net of accumulated depreciation.
+Added: and are depreciated using the straight-line method over the estimated useful lives of the assets.
+Added: Repairs and maintenance costs are expensed as incurred.
+Added: The estimated useful lives of property and equipment are described below:
+Added: Buildings 25 years
+Added: Machinery and equipment 5 - 7 years
+Added: Computer hardware 3 years
+Added: Leasehold improvements Shorter of useful life or remaining term of the lease
+Added: Lease Accounting
+Added: The Company enters into manufacturing supply agreements with CMOs and CDMOs to manufacture its vaccine candidates.
+Added: Certain of these manufacturing supply agreements include the use of identified manufacturing facilities and equipment that are controlled by the Company and for which the Company obtains substantially all the output and may qualify as an embedded lease.
+Added: The Company treats manufacturing supply agreements that contain an embedded lease as lease arrangements in their entirety.
+Added: The evaluation of leases that are embedded in the Company’s CMO and CDMO agreements is complex and requires judgment in determining whether the contract, either explicitly or implicitly, is for the use of an identified asset and the Company has the right to direct the use of, and obtain substantially all of the benefit from, the identified asset which generally is the use of a portion of the manufacturing facility of the CMO or CDMO, the term of the lease, and the fixed lease payments under the contract.
+Added: Depending on the contract, the lease commencement date, defined as the date on which the lessor makes the underlying asset available for use by the lessee and on which the Company is required to accrue lease expenses, may be different than the inception date of the contract.
+Added: The Company determines the non-cancellable lease term of its embedded leases based on the impact of certain expected milestones on its option to terminate the lease where it is reasonably certain to not exercise that option.
+Added: The Company evaluates changes to the terms and conditions of a lease contract to determine if they result in a new lease or a modification of an existing lease.
+Added: For lease modifications, the Company remeasures and reallocates the remaining consideration in the contract and reassesses the lease classification at the effective date of the modification.
+Added: Leases are classified as either operating or finance leases based on the economic substance of the agreement.
+Added: The Company also enters into non-cancelable lease agreements for facilities and certain equipment.
+Added: For leases that have a lease term of more than 12 months at the lease commencement date, the Company recognizes lease liabilities, which represent the Company’s obligation to make lease payments arising from the lease, and corresponding right-of-use (“ROU”) assets, which represent the right to use an underlying asset for the lease term, based on the present value of the fixed future payments over the lease term.
+Added: The Company calculates the present value of future payments using the discount rate implicit in the lease, if available, or the Company’s incremental borrowing rate.
+Added: For all leases that have a lease term of 12 months or less at the commencement date (referred to as “short-term” leases), the Company has elected to apply the practical expedient in ASC Topic 842, Leases (“ASC 842”), to not recognize a lease liability or ROU asset but, instead, recognize lease payments as an expense on a straight-line basis over the lease term and variable lease payments that do not depend on an index or rate as an expense in the period in which the variable lease costs are incurred based on performance or usage in accordance with contractual agreements.
+Added: In determining the lease period, the Company evaluates facts and circumstances that could affect the period over which it is reasonably certain to use the underlying asset while taking into consideration the non-cancelable period over which it has the right to use the underlying asset and any option period to extend or terminate the lease if it is reasonably certain to exercise the option.
+Added: The Company re-evaluates short-term leases that are modified and if they no longer meet the requirements to be treated as a short-term lease, recognizes and measures the lease liability and ROU asset as if the date of the modification is the lease commencement date.
+Added: For short-term leases that are modified and continue to meet the requirements to be treated as a short-term lease, the Company remeasures the fixed lease payments under the modified lease and recognize lease payments as an expense on a straight-line basis over the modified lease term.
+Added: For operating leases, the Company recognizes lease expense related to fixed payments on a straight-line basis from the lease commencement date through the end of the lease term and lease expense related to variable payments as incurred based on performance or usage in accordance with the contractual agreements.
+Added: For finance leases, the Company recognizes the amortization of the ROU asset over the shorter of the lease term or useful life of the underlying asset.
+Added: The Company expenses
+Added: ROU assets acquired for research and development activities under ASC 730 if they do not have an alternative future use, in research and development projects or otherwise.
+Added: The Company uses significant assumptions and judgment in evaluating its lease contracts and other agreements under ASC 842, including the determination of whether an agreement is or contains a lease;
+Added: whether a change in the terms and conditions of a lease contract represent a new or modified lease;
+Added: whether a lease represents an operating or finance lease;
+Added: the discount rate used to determine the present value of lease obligations;
+Added: the term of a lease embedded in its manufacturing supply agreements;
+Added: and the Company’s incremental borrowing rate, which is determined using estimates such as the estimated value of the underlying leased asset and financial profile of comparable companies.
+Added: Impairment of Long-Lived Assets
+Added: Long-lived assets, including property and equipment, internal-use software, and ROU assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable based on the criteria for accounting for the impairment or disposal of long-lived assets under ASC Topic 360, Property, Plant and Equipment.
+Added: The Company calculates the estimated fair value of a long-lived asset or asset group using the income approach.
+Added: Impairment losses are recognized when the sum of expected future cash flows is less than the asset’s or asset group’s carrying value.
+Added: Goodwill is subject to impairment tests annually or more frequently should indicators of impairment arise.
+Added: The Company has determined that, because its only business is the development of recombinant vaccines, it operates as a single operating segment and has one reporting unit.
+Added: The Company primarily utilizes the market approach and, if considered necessary, the income approach to determine if it has an impairment of its goodwill.
+Added: The market approach is based on market value of invested capital.
+Added: To ensure that the Company’s capital stock is the appropriate measurement of fair value, the Company considers factors such as its trading volume, diversity of investors, and analyst coverage.
+Added: If considered necessary, the income approach is used to corroborate the results of the market approach.
+Added: Goodwill impairment may exist if the carrying value of the reporting unit exceeds its estimated fair value.
+Added: If the carrying value of the reporting unit exceeds its fair value, step two of the impairment analysis is performed.
+Added: In step two of the analysis, an impairment loss is recorded equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value, should such a circumstance arise.
+Added: At October 1, 2022 and 2021, the fair value of the Company’s single reporting unit was substantially higher than its carrying value, resulting in no impairment to goodwill as of October 1, 2022 and 2021.
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes .
3 unchanged sentences
A valuation allowance is established when necessary to reduce net deferred tax assets to the amount expected to be realized.
+Added: The Global Intangible Low-Taxed Income (“GILTI”) provisions under the Tax Cuts and Jobs Act of 2017 impose U.S.
+Added: tax on certain foreign income in excess of a deemed return on tangible assets of foreign corporations.
+Added: The Company has elected to treat any potential GILTI inclusions as period costs.
Tax benefits associated with uncertain tax positions are recognized in the period in which one of the following conditions is satisfied:
4 unchanged sentences
The Company has historically generated significant federal, state, and foreign tax net operating losses, which may be subject to limitation in future periods.
−Removed: Management has fully reserved the related deferred tax assets with a valuation allowance in the current reporting period as it is more likely than not that the related benefit will not be realized.
+Added: Management has fully reserved the related deferred tax assets with a valuation allowance
+Added: in the current reporting period as it is more likely than not that the related benefit will not be realized.
The Company is currently subject to examination in all open tax years.
−Removed: During the year ended December 31, 2021, the Company recognized $ 29.2 million in income tax expense related to foreign withholding tax on royalties.
−Removed: During the years ended December 31, 2020 and 2019, the Company recognized no income tax expense.
+Added: During the years ended December 31, 2022 and 2021, the Company recognized $ 4.3 million and $ 29.2 million, respectively, primarily in income tax expense related to foreign withholding tax on royalties.
+Added: During the year ended December 31, 2020, the Company recognized no income tax expense.
Net Loss per Share
−Removed: Net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding for the period.
−Removed: Diluted net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding after giving consideration to the dilutive effect of certain securities outstanding during the period.
−Removed: At December 31, 2021, 2020, and 2019, the Company had potentially dilutive outstanding stock options, stock appreciation rights, and unvested restricted stock units.
−Removed: The Company has generated a net loss in all periods presented;
−Removed: therefore the basic and diluted net loss per share are the same because the inclusion of the potentially dilutive securities would be anti-dilutive.
−Removed: As of December 31, 2021, the Company's Notes (see Note 8) would have been convertible into approximately 2,385,800 shares of the Company's common stock assuming a common stock price of $ 136.20 or higher.
−Removed: These shares, after giving effect to the add back of interest expense and unamortized debt issuance costs on the Notes and any shares due to the Company upon settlement of its capped call transactions, are excluded from the computation, as their effect is antidilutive.
+Added: Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding for the period and excludes the effects of any potentially dilutive securities.
+Added: Diluted net loss per share is computed using the treasury stock method by dividing net loss by the weighted-average number of common shares outstanding after giving consideration to the dilutive effect of certain securities outstanding during the period, primarily convertible notes, stock options, SARs, and unvested RSUs.
+Added: As of December 31, 2022, the Company's 2027 Notes and 2023 Notes (see Note 11) would have been convertible into approximately 16.4 million shares of the Company's common stock assuming the common stock price is equal to or greater than $ 12.50 and $ 136.20 , respectively.
+Added: These shares, after giving effect to the add back of interest expense and unamortized discounts and debt issuance costs on the Notes and any shares due to the Company upon settlement of its capped call transactions, are excluded from the computation, as their effect is antidilutive under the if-converted method.
Foreign Currency
The accompanying consolidated financial statements are presented in U.S.
−Removed: The functional currency of Novavax AB, which is located in Sweden, is the local currency (Swedish Krona) and the functional currency of Novavax CZ, which is located in the Czech Republic, is the local currency (Czech Koruna).
−Removed: The translation of assets and liabilities of Novavax AB and Novavax CZ to U.S.
−Removed: dollars are made at the exchange rate in effect at the consolidated balance sheet date, while equity accounts are translated at historical rates.
−Removed: The translation of the statement of operations data is made at the average exchange rate in effect for the period.
−Removed: The translation of operating cash flow data is made at the average exchange rate in effect for the period, and investing and financing cash flow data is translated at the exchange rate in effect at the date of the underlying transaction.
+Added: The functional currency of the Company’s international subsidiaries is generally the local currency.
+Added: The financial statements of international subsidiaries are translated to U.S.
+Added: dollars using the exchange rate in effect at the consolidated balance sheet date for assets and liabilities, historical rates for equity accounts, and average exchange rates for the consolidated statement of operations.
+Added: Cash flows from operations are translated at the average exchange rate in effect for the period, while cash flows from investing and financing activities are translated at the exchange rate in effect at the date of the underlying transaction.
Translation gains and losses are recognized as a component of accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets.
The foreign currency translation adjustment balance included in accumulated other comprehensive income (loss) was $( 6.4 ) million and $( 1.4 ) million at December 31, 2022 and 2021, respectively.
+Added: The aggregate foreign currency transaction gains and losses resulting from the conversion of the transaction currency to functional currency were $( 2.5 ) million, $( 5.3 ) million, and $ 9.6 million for the years ended December 31, 2022, 2021, and 2020 respectively, which are reflected in Other income (expense).
Segment Information
5 unchanged sentences
Not Yet Adopted
−Removed: In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
+Added: In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.
+Added: 2016-13, Financial Instruments - Credit Losses (Topic 326):
+Added: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), with amendments in 2018, 2019, 2020, and 2022.
+Added: The ASU sets forth a “current expected credit loss” model that requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts.
+Added: ASU 2016-13 applies to financial instruments that are not measured at fair value, including receivables that result from revenue transactions.
+Added: The ASU is effective for the Company beginning on January 1, 2023.
+Added: Management has evaluated the effect of the guidance and its implementation will not have a material impact on the Company’s consolidated financial statements.
+Added: In August 2020, the FASB issued ASU No.
2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):
−Removed: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which will simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including certain convertible instruments and contracts on an entity’s own equity.
−Removed: Specifically, the new standard will remove the separation models required for convertible debt with cash conversion features and convertible instruments with beneficial conversion features.
−Removed: It will also remove certain settlement conditions that are currently required for equity contracts to qualify for the derivative scope exception and will simplify the diluted earnings per share calculation for convertible instruments.
−Removed: ASU 2020-06 will be effective January 1, 2022 for the Company and will be applied using a modified retrospective approach.
−Removed: Management has evaluated the impact of adopting ASU 2020-06 and has determined that it will not have a material impact on the Company’s consolidated financial statements.
−Removed: Note 3 – Marketable Securities
−Removed: The Company had no marketable securities classified as available-for-sale as of December 31, 2021 as all of the Company's investments were in securities classified as cash and cash equivalents.
−Removed: Marketable securities classified as available-for-sale as of December 31, 2020 were comprised of (in thousands):
+Added: Accounting for Convertible
+Added: Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplified the accounting for certain financial instruments with characteristics of liabilities and equity, including certain convertible instruments and contracts in an entity’s own equity.
+Added: Specifically, the new standard removed the separation models required for convertible debt with cash conversion features and convertible instruments with beneficial conversion features.
+Added: It also removed certain settlement conditions that are currently required for equity contracts to qualify for the derivative scope exception and simplified the diluted earnings per share calculation for convertible instruments.
+Added: The Company adopted ASU 2020-06 on January 1, 2022 using a modified retrospective approach, which did not have a material impact on the Company’s consolidated financial statements.
+Added: Note 3 – Revenue
+Added: The Company's accounts receivable included $ 53.8 million and $ 419.7 million related to amounts that were billed to customers and $ 28.6 million and $ 35.3 million related to amounts which had not yet been billed to customers as of December 31, 2022 and 2021, respectively.
+Added: During the years ended December 31, 2022 and 2021, changes in the Company's accounts receivables, deferred revenue, and allowance for doubtful accounts balances were as follows (in thousands):
+Added: Balance, Beginning of Period Additions Deductions Balance, End of Period
+Added: Accounts receivable:
+Added: Year ended December 31, 2022
+Added: $ 454,993 $ 1,768,457 $ ( 2,127,240 ) $ 96,210
+Added: Year ended December 31, 2021
+Added: 262,012 2,432,268 ( 2,239,287 ) 454,993
+Added: Allowance for doubtful accounts:
+Added: Year ended December 31, 2022
+Added: — ( 13,835 ) (1)
+Added: Year ended December 31, 2021
+Added: Deferred revenue (2) :
+Added: Year ended December 31, 2022
+Added: 1,595,472 46,908 ( 1,092,829 ) (3)
+Added: Year ended December 31, 2021
+Added: 273,228 1,598,152 ( 275,908 ) 1,595,472
+Added: (1) Bad debt expense was $ 13.8 million in the year ended December 31, 2022 and there was no bad debt expense in the years ended December 31, 2021 and 2020.
+Added: (2) Amount is comprised of $ 0.4 billion, $ 1.4 billion, and $ 0.3 billion current Deferred revenue and $ 179.4 million, $ 172.5 million, and no non-current Deferred revenue as of December 31, 2022, 2021, and 2020 respectively.
+Added: (3) Deductions from Deferred revenue include the following:
+Added: $ 273.8 million that was realized in Revenue and $ 819.0 million, including $ 697.4 million related to the Advance Payment Amount (as described below) at issue in the Gavi arbitration and $ 112.5 million related to the Amended and Restated UK Supply Agreement, that was reclassified to Other current liabilities, as described below.
+Added: In the fourth quarter of 2022, the Company recognized revenue of $ 41.9 million related to a change in estimate attributed to changes in constraint of variable consideration.
+Added: The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties, was approximately $ 3 billion as of December 31, 2022, which excludes amounts related to the Company’s APA (“the Gavi APA”) with Gavi, the Vaccine Alliance (“Gavi”) and the reduction in doses related to the Amended and Restated UK Supply Agreement, as defined below.
+Added: Failure to meet regulatory milestones, obtain timely supportive recommendations from governmental advisory committees, or achieve product volume or delivery timing obligations under the Company’s APAs may require the Company to refund portions of upfront payments or result in reduced future payments, which could adversely impact the Company’s ability to realize revenue from its unsatisfied performance obligations.
+Added: The timing to fulfill performance obligations related to grant agreements will depend on the results of the Company's research and development activities, including clinical trials, and delivery of doses.
+Added: The timing to fulfill performance obligations related to APAs will depend on timing of product manufacturing, receipt of marketing authorizations for additional indications, delivery of doses based on customer demand, and the ability of the customer to request variant vaccine in place of the prototype NVX-CoV2373 vaccine under certain of the Company’s APAs.
+Added: The remaining unfilled performance obligations not related to grant agreements or APAs are expected to be fulfilled in less than one year .
+Added: Under the terms of the Gavi APA and a separate purchase agreement between Gavi and Serum Institute of India Pvt.
+Added: (“SIIPL”), 1.1 billion doses of NVX-CoV2373 were to be made available to countries participating in the COVAX Facility.
+Added: The Company expected to manufacture and distribute 350 million doses of NVX-CoV2373 to countries participating under the COVAX Facility.
+Added: Under a separate purchase agreement with Gavi, SIIPL was expected to manufacture and deliver
+Added: the balance of the 1.1 billion doses of NVX-CoV2373 for low- and middle-income countries participating in the COVAX Facility.
+Added: The Company expected to deliver doses with antigen and adjuvant manufactured at facilities directly funded under the Company's funding agreement with CEPI, with initial doses supplied by SIIPL and Serum Life Sciences Limited (“SLS”) under a supply agreement.
+Added: The Company expected to supply significant doses that Gavi would allocate to low-, middle- and high-income countries, subject to certain limitations, utilizing a tiered pricing schedule and Gavi could prioritize such doses to low- and middle- income countries, at lower prices.
+Added: Additionally, the Company could provide additional doses of NVX-CoV2373, to the extent available from CEPI funded manufacturing facilities, in the event that SIIPL could not materially deliver expected vaccine doses to the COVAX Facility.
+Added: Under the agreement, the Company received an upfront payment of $ 350.0 million from Gavi in 2021 and an additional payment of $ 350.0 million in the first quarter of 2022 related to the Company’s achieving EUL for NVX-CoV2373 by the WHO (the “Advance Payment Amount”).
+Added: On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA on the basis of Gavi’s failure to procure the purchase of 350 million doses of NVX-CoV2373 from the Company as required by the Gavi APA.
+Added: As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses.
+Added: On December 2, 2022, Gavi issued a written notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the Gavi APA.
+Added: Gavi also contends that, based on its purported termination of the Gavi APA, it is entitled to a refund of the Advance Payment Amount less any amounts that have been credited against the purchase price for binding orders placed by a buyer participating in the COVAX Facility.
+Added: As of December 31, 2022, the remaining Gavi Advance Payment Amount of $ 697.4 million, pending resolution of the dispute with Gavi related to a return of the remaining Advance Payment Amount, was reclassified from Deferred revenue to Other current liabilities in the Company’s consolidated balance sheet.
+Added: On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above.
+Added: The Company’s response is currently due by March 2, 2023.
+Added: Arbitration is inherently uncertain, and while the Company believes that it is entitled to retain the remaining Advance Payment Amount received from Gavi, it is possible that it could be required to refund all or a portion of the remaining Advance Payment Amount from Gavi.
+Added: Product Revenue
+Added: Product revenue by the Company’s customer’s geographic location was as follows (in thousands):
December 31, 2022
−Removed: Amortized Cost Gross Unrealized
−Removed: Gains Gross Unrealized Losses Fair Value
−Removed: Treasury securities $ 10,038 $ — $ ( 2 ) $ 10,036
−Removed: Corporate debt securities 127,003 13 ( 3 ) 127,013
−Removed: Agency securities 20,599 1 — 20,600
−Removed: Total $ 157,640 $ 14 $ ( 5 ) $ 157,649
+Added: North America
+Added: Europe 823,542
+Added: Rest of the world
+Added: Total product revenue $ 1,554,961
+Added: The Company has an APA with the European Commission (“EC”) acting on behalf of various European Union member states to supply a minimum of 20 million and up to 100 million initial doses of NVX-CoV2373, with the option for the EC to purchase an additional 100 million doses up to a maximum aggregate of 200 million doses in one or more tranches, through 2023.
+Added: Under the terms of the APA, the Company agreed to manufacture the vaccine in facilities located in the European Union and ensure continued efficacy of the vaccine against variants of the SARS-CoV-2 virus.
+Added: Pursuant to the terms of the APA, the Company is prohibited from supplying NVX-CoV2373 to any third party if such delivery would impede or limit the fulfillment of the Company’s obligations to the European Commission under the APA, except with respect to the Company’s obligations under the Gavi APA.
+Added: In 2022, the Company was notified by the EC that it was cancelling approximately 7 million doses of its prior commitment originally scheduled for delivery in the first and second quarters of 2022, in accordance with the APA, and reducing the order to approximately 63 million doses.
+Added: In January 2023, the Company finalized a revised delivery schedule for the remaining 20 million committed doses under the APA that were originally scheduled for delivery during the first and second quarters of 2022 and are expected to be delivered in 2023.
+Added: In July 2022, the Company entered into an Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (as amended on September 26, 2022, the “Amended and Restated UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020, between the parties (the “Original UK Supply Agreement”).
+Added: Under the Original UK Supply Agreement, the Authority agreed to purchase 60 million doses of NVX-CoV2373 and made an
+Added: upfront payment to the Company.
+Added: Under the terms of the Amended and Restated UK Supply Agreement, the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses (the “Conditional Doses”) of NVX-CoV2373, with the number of Conditional Doses contingent on, and subject to reduction based on, the Company’s timely achievement of supportive recommendations from the Joint Committee on Vaccination and Immunisation (the “JCVI”) that is approved by the UK Secretary of State for Health, with respect to use of the vaccine for (a) the general adult population as part of a SARS-CoV-2 vaccine booster campaign in the United Kingdom or (b) the general adolescent population as part of a SARS-CoV-2 vaccine booster campaign in the United Kingdom or as a primary series SARS-CoV-2 vaccination, excluding where that recommendation relates only to one or more population groups comprising less than one million members in the United Kingdom.
+Added: If the Authority does not purchase the Conditional Doses or the number of such Conditional Doses is reduced below 15 million doses of NVX-CoV2373, the Company would have to repay up to $ 225.0 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement.
+Added: Under the Amended and Restated UK Supply Agreement, the Authority also has the option to purchase up to an additional 44 million doses, in one or more tranches, through 2024.
+Added: As of November 30, 2022, the JCVI had not yet made a supportive recommendation with respect to NVX-CoV2373, thereby triggering, under the terms of the Amended and Restated UK Supply Agreement, (i) a reduction of the number of Conditional Doses from 15 million doses to 7.5 million doses, which reduced number of Conditional Doses are contingent on, and subject to further reduction based on, the Company’s timely achievement by November 30, 2023 of a supportive recommendation from JCVI that is approved by the UK Secretary of State for Health as described in the paragraph above, and (ii) an obligation of the Company to repay $ 112.5 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement, which is reflected in Other current liabilities, with the remaining upfront payment balance of $ 112.5 million reflected in current Deferred revenue.
+Added: The Company recognized grant revenue as follows (in thousands):
+Added: Year Ended December 31,
+Added: 2022 2021 2020
+Added: USG Agreement
+Added: $ 380,996 $ 788,953 $ 204,727
+Added: 1,925 21,683 12,519
+Added: — 135,445 223,158
+Added: Other grant revenue
+Added: — 2,628 12,806
+Added: Total grant revenue $ 382,921 $ 948,709 $ 453,210
+Added: In July 2020, the Company entered into a Project Agreement (the “Project Agreement”) with Advanced Technology International, Inc.
+Added: (“ATI”), the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with the partnership formerly known as Operation Warp Speed.
+Added: Operation Warp Speed was a partnership among components of the U.S.
+Added: Department of Health and Human Services and the U.S.
+Added: Department of Defense working to accelerate the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics.
+Added: The Project Agreement relates to the Base Agreement the Company entered into with ATI in June 2020 (the “Base Agreement,” together with the Project Agreement, the “USG Agreement”).
+Added: The original USG Agreement required the Company to conduct certain clinical, regulatory, and other activities, including a pivotal Phase 3 clinical trial to determine the safety and efficacy of NVX-CoV2373, and to manufacture and deliver to the U.S.
+Added: government 100 million doses of the vaccine candidate.
+Added: Funding under the USG Agreement is payable to the Company for various development, clinical trial, manufacturing, regulatory, and other activities.
+Added: The USG Agreement contains terms and conditions that are customary for U.S.
+Added: government agreements of this nature, including provisions giving the U.S.
+Added: government the right to terminate the Base Agreement or the Project Agreement based on a reasonable determination that the funded project will not produce beneficial results commensurate with the expenditure of resources and that termination would be in the U.S.
+Added: government’s interest.
+Added: If the Project Agreement is terminated prior to completion, the Company is entitled to be paid for work performed and costs or obligations incurred prior to termination and consistent with the terms of the USG Agreement.
+Added: In July 2022, the Company entered into a modification to the USG Agreement that amended the terms of such agreement to provide for (i) an initial delivery to the U.S.
+Added: government of approximately 3 million doses of NVX-CoV2373 and (ii) any additional manufacture and delivery to the U.S.
+Added: government up to an aggregate of 100 million doses of NVX-CoV2373 contemplated by the original USG Agreement (inclusive of the initial batch of
+Added: approximately 3 million doses) dependent on U.S.
+Added: government demand, FDA guidance on strain selection, agreement between the parties on the price of such doses, and available funding.
+Added: The 3 million initial doses were delivered in July 2022.
+Added: The performance period under the Project Agreement extends through 2023 to cover clinical trial activities, subject to early termination by the U.S.
+Added: government or extension by mutual agreement of the parties.
+Added: Under the USG Agreement, the Company was originally entitled to funding of up to $ 1.75 billion to support certain activities related to the development of NVX-CoV2373 and the manufacture and delivery of the vaccine candidate to the U.S.
+Added: In subsequent modifications, the Company's USG Agreement was amended to increase the contract funding and ceiling to $ 1.8 billion, which allows the Company to make expenditures or incur obligations of up to $ 1.8 billion for support of the USG Agreement.
+Added: As of December 31, 2022, the Company had recognized $ 1.4 billion in revenue related to the USG Agreement since the inception of the contract, leaving $ 0.4 billion remaining to spend.
+Added: Department of Defense
+Added: In June 2020, the Company entered into a letter contract that was later amended in January 2021 (the “DoD Contract”) with the DoD Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (“JPEO-CRBND-EB”), under which JPEO-CRBND-EB agreed to provide funding of up to $ 45.7 million to the Company to support the manufacture of NVX-CoV2373.
+Added: The Company is authorized to make expenditures or incur obligations up to the full amount of the funding.
+Added: Under the DoD Contract, the Company originally expected to deliver 10 million doses of NVX-CoV2373 to the DoD.
+Added: The 10 million doses of NVX-CoV2373 could be used in Phase 2/3 clinical trials or under an EUA, if approved by the FDA.
+Added: Pursuant to the DoD Contract, after NVX-CoV2373 is approved by the FDA, the DoD is entitled to most-favored customer status for a period of five years from the award of the DoD Contract, meaning that the Company cannot give any comparable commercial client in the United States more favorable pricing than the DoD under similar transactional circumstances.
+Added: In July 2022, the Company modified its existing agreement with the DoD and delivered 0.2 million doses of NVX-CoV2373 after receipt of EUA approval from the FDA, with delivery of the remaining 9.8 million doses of NVX-CoV2373 contemplated by the original agreement subject to DoD demand and available funding.
+Added: The term of the DoD Contract expired in December 2022.
+Added: Coalition for Epidemic Preparedness Innovations
+Added: In May 2020, the Company entered into a restated funding agreement which was amended in November 2020 with CEPI, under which CEPI agreed to provide funding of up to $ 399.5 million to the Company to support the development of NVX-CoV2373.
+Added: The agreement provides up to $ 257.0 million in CEPI Grant Funding and up to $ 142.5 million in CEPI Forgivable Loan Funding, which are loans in the form of one or more forgivable no-interest term loans in order to prepay certain manufacturing activities and are not subject to restrictive or financial covenants.
+Added: As of December 31, 2022 and 2021, the Company had recognized total revenue related to CEPI of $ 358.6 million, with the unused amounts primarily related to CEPI Forgivable Loan Funding.
+Added: Payments received under the CEPI Forgivable Loan Funding are only repayable if NVX-CoV2373 manufactured by the CMO network funded by CEPI is sold to one or more third parties (which would have previously included, but is not limited to, any sales under the Company’s Gavi APA prior to its termination), and such sales cover the Company’s costs of manufacturing such vaccine, not including manufacturing costs funded by CEPI.
+Added: The timing and amount of any loan repayments is currently uncertain.
+Added: Royalties and Other
+Added: For the years ended December 31, 2022 and 2021, the Company recognized $ 9.0 million and $ 178.6 million, respectively, in revenue related to sales-based royalties, which is reflected in Royalties and other revenue.
+Added: For the years ended December 31, 2022 and 2020, the Company recognized $ 20.0 million upon the sale of NVX-CoV2373 in Japan and $ 20.0 million related to a development milestone payment, respectively.
+Added: Note 4 – Collaboration and License Agreements
+Added: Serum Institute
+Added: The Company has granted SIIPL exclusive and non-exclusive licenses for the development, co-formulation, filling and finishing, registration, and commercialization of NVX-CoV2373.
+Added: SIIPL agreed to purchase the Company's Matrix-M TM
+Added: adjuvant and the Company granted SIIPL a non-exclusive license to manufacture the antigen drug substance component of NVX-CoV2373 in SIIPL’s licensed territory solely for use in the manufacture of NVX-CoV2373.
+Added: The Company and SIIPL equally split the revenue from SIIPL’s sale of NVX-CoV2373 in its licensed territory, net of agreed costs.
+Added: The Company granted to SIIPL (i) an exclusive license in India during the agreement and (ii) a non-exclusive license (a) during the “Pandemic Period” (as declared by the WHO) in all countries other than specified countries designated by the World Bank as upper-middle or high-income countries, with respect to which the Company retains rights, and (b) after the Pandemic Period, in only those countries designated as low or middle-income by the World Bank.
+Added: Following the Pandemic Period, the Company may notify SIIPL of any bona fide opportunities for the Company to license NVX-CoV2373 to a third party in such low and middle-income countries and SIIPL would have an opportunity to match or improve such third-party terms, failing which, the Company would have the discretion to remove one or more non-exclusive countries from SIIPL’s license.
+Added: The Company also has a supply agreement with SIIPL and SLS under which SIIPL and SLS supply the Company with NVX-CoV2373 for commercialization and sale in certain territories, as well as a contract development manufacture agreement with SLS, under which SLS manufactures and supplies finished vaccine product to the Company using antigen drug substance and Matrix-M™ adjuvant supplied by the Company.
+Added: In May and August 2022, the Company expanded its license and supply arrangements with SIIPL to include its proprietary COVID-19 variant antigen candidate(s), its quadrivalent influenza vaccine candidate, and its CIC vaccine candidate, so that SIIPL can manufacture and commercialize a vaccine targeting COVID-19 variants, including the Omicron subvariants, a quadrivalent influenza vaccine, and CIC vaccine, and supply such vaccines to the Company.
+Added: In March 2020, the Company granted SIIPL a non-exclusive license for the use of Matrix-M™ adjuvant supplied by the Company to develop, manufacture, and commercialize R21, a malaria candidate developed by the Jenner Institute, University of Oxford.
+Added: Takeda Pharmaceutical Company Limited
+Added: The Company has a collaboration and license agreement with Takeda Pharmaceutical Company Limited (“Takeda”) under which the Company granted Takeda an exclusive license to develop, manufacture, and commercialize NVX-CoV2373 in Japan.
+Added: Under the agreement, Takeda purchases Matrix-M™ adjuvant from the Company to manufacture doses of NVX-CoV2373 and the Company is entitled to receive payments from Takeda based on the achievement of certain development and commercial milestones, as well as a portion of net profits from the sale of NVX-CoV2373.
+Added: In September 2021, Takeda finalized an agreement with the Government of Japan’s Ministry of Health, Labour and Welfare ("MHLW") for the purchase of 150 million doses of NVX-CoV2373.
+Added: In February 2023, MHLW cancelled the remainder of doses under its agreement with Takeda.
+Added: As a result, it is uncertain whether the Company will receive future payments from Takeda under the terms and conditions of their current collaboration and licensing agreement.
+Added: For the years ended December 31, 2022 and 2020, the Company recognized $ 20.0 million upon the sale of NVX-CoV2373 in Japan and $ 20.0 million related to a development and commercial milestone payment, respectively, which are included in Royalties and other revenue on the consolidated statements of operations.
+Added: SK bioscience, Co., Ltd.
+Added: The Company has a collaboration and license agreement with SK bioscience, Co., Ltd.
+Added: (“SK bioscience”) to manufacture and commercialize NVX-CoV2373 for sale to the governments of South Korea, Thailand, and Vietnam.
+Added: SK bioscience finalized an APA with the Korean government to supply 40 million doses of NVX-CoV2373 to the Republic of Korea beginning in 2021.
+Added: SK bioscience pays a royalty in the low to middle double-digit range.
+Added: Additionally, the Company has a manufacturing supply arrangement with SK bioscience under which SK bioscience supplies the Company with the antigen component of NVX-CoV2373 for use in the final drug product globally, including product to be distributed by the COVAX Facility, which was established to allocate and distribute vaccines equitably to participating countries and economies.
+Added: In July 2022, the Company signed an additional agreement with SK bioscience for the technology transfer of the Company’s proprietary COVID-19 variant antigen materials so that SK bioscience can manufacture the drug substance targeting COVID-19 variants, including the Omicron subvariants.
+Added: The companies also signed an agreement to manufacture and supply NVX-CoV2373 in a prefilled syringe.
+Added: Other Supply Agreements
+Added: On September 30, 2022, the Company, FUJIFILM Diosynth Biotechnologies UK Limited (“FDBK”), FUJIFILM Diosynth Biotechnologies Texas, LLC (“FDBT”), and FUJIFILM Diosynth Biotechnologies USA, Inc.
+Added: (“FDBU” and together with FDBK and FDBT, “Fujifilm”) entered into a Confidential Settlement Agreement and Release (the “Fujifilm Settlement Agreement”) regarding amounts due to Fujifilm in connection with the termination of manufacturing activity at FDBT under the Commercial Supply Agreement (the “Fujifilm CSA”) dated August 20, 2021 and Master Services Agreement dated June 30, 2020 and associated statements of work (the “Fujifilm MSA”) by and between the Company and Fujifilm.
+Added: The Fujifilm MSA
+Added: and Fujifilm CSA established the general terms and conditions applicable to Fujifilm’s manufacturing and supply activities related to NVX-CoV2373 under the associated statements of work.
+Added: Pursuant to the Fujifilm Settlement Agreement, the Company is responsible for payment of up to $ 185.0 million (the “Settlement Payment”) to Fujifilm in connection with cancellation of manufacturing activity at FDBT under the Fujifilm CSA, of which (i) $ 47.8 million, constituting the initial reservation fee under the Fujifilm CSA, was credited against the Settlement Payment on September 30, 2022 and (ii) the remaining balance is to be paid in four equal quarterly installments of $ 34.3 million each beginning March 31, 2023.
+Added: As of December 31, 2022, the remaining payment of $ 137.2 million was reflected in Accrued expenses.
+Added: Under the Fujifilm Settlement Agreement, Fujifilm is required to use commercially reasonable efforts to mitigate the losses associated with the vacant manufacturing capacity caused by the termination of manufacturing activities at FDBT under the Fujifilm CSA, and the final two quarterly installments will be mitigated by any replacement revenue achieved by Fujifilm between July 1, 2023 and December 31, 2023.
+Added: The Settlement Payment is less than amounts previously recognized as embedded lease expense and reflected in Research and development expense from FDBT manufacturing activity under the Fujifilm CSA prior to the Fujifilm Settlement Agreement and accordingly, during the year ended December 31, 2022, the Company recorded a benefit of $ 98.3 million as Research and development expense (see Note 10).
+Added: Except with respect to certain limited activities agreed upon by the parties, the Fujifilm MSA terminated with respect to all activities in FDBU and FDBT on October 21, 2022 and the impact of the termination was determined in accordance with the provisions of the Fujifilm MSA.
+Added: The terms and conditions of the Fujifilm MSA and Fujifilm CSA will remain in full force and effect with respect to the ongoing activities at FDBK.
+Added: In addition, the Company and Fujifilm mutually released all claims relating to (i) the cancellation of batches to be manufactured at FDBT under the Fujifilm MSA or Fujifilm CSA, (ii) FDBT facility idle time in 2022, (iii) failure to complete product performance qualification testing of batches manufactured by Fujifilm by December 2021, and (iv) any obligation by Fujifilm to reserve capacity or manufacture batches at FDBT for the benefit of the Company under the Fujifilm MSA or Fujifilm CSA.
+Added: The Company continues to assess its manufacturing needs and intends to modify its global manufacturing footprint consistent with its contractual obligations to supply, and anticipated demand for, NVX-CoV2373, and, as a result, significant costs may be incurred.
+Added: Note 5 – Cash, Cash Equivalents, and Restricted Cash
+Added: The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):
+Added: 2022 2021 2020
+Added: Cash and cash equivalents $ 1,336,883 $ 1,515,116 $ 553,398
+Added: Restricted cash current 10,303 11,490 93,880
+Added: Restricted cash non-current (1)
+Added: 1,659 1,653 1,460
+Added: Cash, cash equivalents, and restricted cash $ 1,348,845 $ 1,528,259 $ 648,738
+Added: (1) Classified as Other non-current assets as of December 31, 2022 and 2021 .
Note 6 – Fair Value Measurements
1 unchanged sentence
Fair Value at December 31, 2022 Fair Value at December 31, 2021
−Removed: Assets Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
+Added: Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Money market funds (1)
+Added: $ 398,834 $ — $ — $ 361,822 $ — $ —
Government-backed securities (1)
−Removed: Treasury securities (2) — — — — 54,088 —
+Added: — 296,000 — — 266,250 —
Corporate debt securities (1)
+Added: — — — — 790,672 —
Agency securities (1)
−Removed: Total cash equivalents and marketable securities $ 361,822 $ 1,056,922 $ — $ 96,116 $ 492,619 $ —
−Removed: Convertible notes payable $ — $ 447,509 $ — $ — $ 407,238 $ —
−Removed: (1) Classified as cash and cash equivalents as of December 31, 2021 and 2020 (see Note 2).
−Removed: (2) Includes $ 44,052 classified as cash and cash equivalents as of December 31, 2020 on the consolidated balance sheets.
−Removed: (3) Includes $ 790,672 and $ 246,668 classified as cash and cash equivalents as of December 31, 2021 and 2020, respectively, on the consolidated balance sheets.
−Removed: Fixed-income investments categorized as Level 2 are valued at the custodian bank by a third-party pricing vendor’s valuation models that use verifiable observable market data, such as interest rates and yield curves observable at commonly quoted intervals and credit spreads, bids provided by brokers or dealers, or quoted prices of securities with similar
−Removed: characteristics.
−Removed: Pricing of the Company’s Notes (as defined in Note 8) has been estimated using other observable inputs, including the price of the Company’s common stock, implied volatility, interest rates, and credit spreads among others.
+Added: — 104,536 — — — —
+Added: Total cash equivalents $ 398,834 $ 400,536 $ — $ 361,822 $ 1,056,922 $ —
+Added: 3.75 % Convertible notes due 2023
+Added: $ — $ 322,111 $ — $ — $ 447,509 $ —
+Added: 5.00 % Convertible notes due 2027
+Added: — 172,789 — — — —
+Added: Total convertible notes payable $ — $ 494,900 $ — $ — $ 447,509 $ —
+Added: (1) All investments are classified as Cash and cash equivalents as of December 31, 2022 and 2021, on the consolidated balance sheets.
+Added: Fixed-income investments categorized as Level 2 are valued at the custodian bank by a third-party pricing vendor’s valuation models that use verifiable observable market data, such as interest rates and yield curves observable at commonly quoted intervals and credit spreads, bids provided by brokers or dealers, or quoted prices of securities with similar characteristics.
+Added: Pricing of the Company’s convertible notes has been estimated using observable inputs, including the price of the Company’s common stock, implied volatility, interest rates, and credit spreads.
During the years ended December 31, 2022 and 2021, the Company did not have any transfers between Levels.
The amount in the Company’s consolidated balance sheets for accounts payable and accrued expenses approximates its fair value due to its short-term nature.
−Removed: Note 5 – Intangible Assets and Goodwill
−Removed: Identifiable Intangible Assets
−Removed: Purchased intangible assets consisted of the following as of December 31, 2021 and 2020 (in thousands):
−Removed: December 31, 2021 December 31, 2020
−Removed: Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Gross Carrying Amount Accumulated Amortization Intangible Assets, Net
−Removed: Finite-lived intangible assets:
−Removed: Proprietary adjuvant technology $ 8,239 $ ( 3,469 ) $ 4,770 $ 9,099 $ ( 3,374 ) $ 5,725
−Removed: Collaboration agreements 3,722 ( 3,722 ) — 4,109 ( 4,109 ) —
−Removed: Total identifiable intangible assets $ 11,961 $ ( 7,191 ) $ 4,770 $ 13,208 $ ( 7,483 ) $ 5,725
−Removed: Amortization expense for the years ended December 2021, 2020, and 2019 was $ 0.4 million, $ 0.6 million, and $ 0.7 million, respectively.
−Removed: Estimated amortization expense for existing intangible assets for each of the five succeeding years ending December 31 is as follows (in thousands):
+Added: Note 7 – Inventory
+Added: Inventory consisted of the following (in thousands):
+Added: Raw materials $ 13,912 $ 8,872
+Added: Semi-finished goods 21,410 —
+Added: Finished goods 1,361 —
+Added: Total inventory $ 36,683 $ 8,872
+Added: Inventory write-downs as a result of excess, obsolescence, expiry, or other reasons, and losses on firm purchase commitments are recorded as a component of Cost of sales in the consolidated statements of operations.
+Added: For the year ended December 31, 2022, inventory write-downs were $ 447.6 million and losses on firm purchase commitments were $ 155.9 million.
+Added: There were no inventory write-downs or losses on firm purchase commitments during 2021 or 2020.
+Added: reserves for write-downs are relieved when the inventory is disposed of through scrap or sale.
+Added: Activity in the reserve for excess and obsolete inventory was as follows (in thousands):
+Added: December 31, 2022
+Added: Balance at January 1, 2022 $ —
+Added: Charged to Cost of sales, including impairments 447,597
+Added: Other additions —
+Added: Deductions ( 79,214 )
+Added: Balance at December 31, 2022 $ 368,383
+Added: Note 8 – Goodwill
The change in the carrying amounts of goodwill was as follows (in thousands):
1 unchanged sentence
Beginning balance $ 131,479 $ 135,379
−Removed: Goodwill resulting from the acquisition of Novavax CZ — 70,662
Currency translation adjustments ( 5,148 ) ( 3,900 )
2 unchanged sentences
On May 27, 2020 (the “Acquisition Date”), the Company entered into a Share Purchase Agreement (the “Deed”) by and among Novavax AB, the Company’s wholly-owned Swedish subsidiary (the “Buyer”), and De Bilt Holdings B.V., Poonawalla Science Park B.V., and Bilthoven Biologicals B.V.
−Removed: (collectively, the “Sellers”) and, solely as guarantors, each of Serum International B.V.
+Added: and, solely as guarantors, each of Serum International B.V.
and the Company.
16 unchanged sentences
The fair value of the assets acquired and liabilities assumed was determined using market and cost valuation methodologies.
−Removed: The fair value measurements were based on significant unobservable inputs that were developed by the Company using publicly available information, market participant assumptions, and cost and development assumptions.
+Added: The fair value measurements were based on significant unobservable inputs that were developed by the
+Added: Company using publicly available information, market participant assumptions, and cost and development assumptions.
Because of the use of significant unobservable inputs, the fair value measurements represent a Level 3 measurement as defined in ASC 820.
18 unchanged sentences
The unaudited pro forma financial information combines the historical results of operations of the Company and Novavax CZ and reflects the application of certain pro forma adjustments (in thousands, except per share amounts):
−Removed: Year Ended December 31,
+Added: December 31, 2020
Revenue $ 475,598
3 unchanged sentences
Note 10 – Leases
−Removed: The Company has embedded leases related to multiple manufacturing supply agreements with CMOs and CDMOs to manufacture the Company’s COVID-19 vaccine candidate, NVX-CoV2373, as well as operating leases for its research and development and manufacturing facilities, corporate headquarters and offices, and certain equipment.
−Removed: During 2021 and 2020, the Company entered into various CMO and CDMO manufacturing supply agreements that include the use of identified manufacturing facilities and contain fixed or minimum commitments.
−Removed: The Company evaluated the agreements at inception and determined that certain of these arrangements contain an embedded lease under ASC 842 as it has the exclusive use of, and control over, a portion of the manufacturing facility and equipment of the supplier during the contractual term of the arrangement.
−Removed: The Company classified the CMO and CDMO arrangements as operating and finance leases based on the terms of the agreement.
−Removed: The Company recognized lease expense related to fixed payments for its short-term operating leases on a straight-line basis over the lease term and lease expense related to variable payments as incurred based on performance or usage in accordance with the contractual agreements.
−Removed: Additionally, during 2021, the Company amended its various CMO and CDMO agreements that modified existing embedded leases under ASC 842 as the Company continued to have the exclusive use of, and control over, a portion of manufacturing facilities and equipment of the supplier during the contractual term of the new arrangement.
−Removed: For leases that were previously determined to represent short-term embedded leases, the modifications did not result in a change in lease classification.
−Removed: During 2021 and 2020, the Company recognized ROU assets of $ 144.4 million and $ 245.9 million, respectively, for its finance leases and long-term operating related to leases embedded in CMO and CDMO manufacturing supply agreements.
−Removed: The Company expensed the ROU assets since they relate to research and development activities for the development of NVX-CoV2373 for which the Company does not have an alternative future use.
−Removed: During 2021, the Company entered into and extended various facility lease agreements related to research and development facilities and office space.
+Added: The Company has embedded leases related to multiple manufacturing supply agreements with CMOs and CDMOs to manufacture NVX-CoV2373, as well as operating leases for its research and development and manufacturing facilities, corporate headquarters and offices, and certain equipment.
+Added: During the years ended December 31, 2022 and 2021, the Company modified certain of its CMO and CDMO agreements that had previously been determined to represent embedded leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration under the contracts and reassessed the lease classification as of the effective dates of the respective modifications.
+Added: During the year ended December 31, 2022, the Company recognized ROU assets and a corresponding long-term operating lease liability on the remeasurement of modified supply agreements.
+Added: year ended December 31, 2021, for leases that were previously determined to represent short-term embedded leases, modifications did not result in a change in lease classification.
+Added: During 2022 and 2021, as a result of new or modified leases, the Company recognized ROU assets, net of credits on modifications, of $ 18.6 million and $ 144.4 million, respectively, for its finance leases and long-term operating leases embedded in CMO and CDMO manufacturing supply agreements.
+Added: The Company expensed the ROU assets since they related to research and development activities for the development of NVX-CoV2373 for which the Company did not have an alternative future use.
+Added: During 2022 and 2021, the Company entered into and extended various facility lease agreements related to research and development facilities and office space.
During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland ("700QO").
The lease is for approximately 170,000 square feet of space that the Company intends to use for manufacturing, research and development, and offices.
−Removed: The term of the lease is 15 years with options to extend the lease.
+Added: The term of the lease is 15 years with options to extend the lease that have not been recognized in the ROU asset.
The lease provides for an annual base rent of $ 5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs.
−Removed: The Company incurred $ 36.4 million in 2021 related to tenant improvement costs and anticipates that it will incur substantial additional tenant improvement costs, net of total landlord contribution of $ 30.6 million, through 2023 to bring the building to the condition necessary for its intended use.
−Removed: The Company is anticipated to occupy the premises in phases and occupied the third floor during the first quarter of 2022.
−Removed: As of December 31, 2021, the facility leases, excluding the 700QO lease, have expirations that range from approximately three to nine years , some of which include options to extend the lease term.
−Removed: The Company includes the option to extend the lease in determining the lease term if it is reasonably certain that the option will be exercised.
+Added: During the year ended December 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, certain floors located at the premises and recognized an ROU asset and related lease obligation of $ 73.2 million as lease commencement for accounting purposes had occurred.
+Added: As of December 31, 2022 and 2021, the Company had incurred $ 49.0 million and $ 36.4 million, respectively, related to tenant improvement costs to be recognized as a ROU asset.
+Added: The Company anticipates that it will incur additional tenant improvement costs, net of a landlord contribution of $ 9.8 million, through 2023 to bring the remainder of the building to the condition necessary for its intended use.
+Added: As of December 31, 2022, facility leases, excluding the 700QO lease, have expirations that range from approximately three to nine years , some of which include options to extend the lease term.
The facility leases contain provisions for future rent increases and obligate the Company to pay building operating costs.
−Removed: The Company records operating lease expense for each of its operating leases on a straight-line basis from lease commencement date through the end of the lease term.
−Removed: The Company uses its incremental borrowing rate in determining its ROU assets and long-term lease obligations.
−Removed: The Company uses significant judgment and estimates, including the estimated value of the underlying leased asset and financial profile of comparable companies, to analyze the credit spread as of the lease inception date.
Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 was as follows (in thousands, except weighted-average remaining lease term and discount rate):
Lease Assets and Liabilities Classification 2022 2021
−Removed: ROU assets, operating, net Other non-current assets $ 40,123 $ 7,794
+Added: ROU assets, operating, net Right of use asset, net $ 36,384 $ 40,123
+Added: ROU assets, finance, net Right of use asset, net 69,857 —
+Added: Total non-current ROU assets $ 106,241 $ 40,123
Current portion of operating lease liabilities Other current liabilities $ 16,867 $ 30,983
12 unchanged sentences
Year Ended December 31,
+Added: 2022 2021 2020
Operating lease expense $ 6,903 $ 37,027 $ 2,462
7 unchanged sentences
Year Ended December 31,
+Added: 2022 2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
11 unchanged sentences
Note 11 – Long-Term Debt
+Added: The Company’s long-term debt consisted of the following (in thousands):
+Added: Current portion:
+Added: 3.75 % Convertible notes due 2023
+Added: $ 325,000 $ —
+Added: Unamortized debt issuance costs ( 119 ) —
+Added: Total current convertible notes payable $ 324,881 $ —
+Added: Non-current portion:
+Added: 5.00 % Convertible notes due 2027
+Added: $ 175,250 $ —
+Added: 3.75 % Convertible notes due 2023
+Added: Unamortized debt issuance costs ( 8,784 ) ( 1,542 )
+Added: Total non-current convertible notes payable $ 166,466 $ 323,458
+Added: Interest expense incurred in connection with the convertible notes payable consisted of the following (in thousands):
+Added: Year Ended December 31,
+Added: 2022 2021 2020
+Added: Coupon interest $ 12,542 $ 12,188 $ 12,188
+Added: Amortization of debt issuance costs 1,497 1,424 1,424
+Added: Total interest expense on convertible notes payable $ 14,039 $ 13,612 $ 13,612
2027 Convertible Notes
−Removed: In 2016, the Company issued $ 325 million aggregate principal amount of convertible senior unsecured notes that will mature on February 1, 2023 (the “Notes”).
−Removed: The Notes are senior unsecured debt obligations and were issued at par.
+Added: In December 2022, the Company issued $ 175.3 million aggregate principal amount of convertible senior unsecured notes that will mature on December 15, 2027 (the “2027 Notes”), unless earlier converted, redeemed, or repurchased.
+Added: The 2027 Notes were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and pursuant to an indenture dated December 20, 2022 (the “2027 Indenture”) between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.
+Added: Concurrently with the issuance of the 2027 Notes, the Company completed a public offering of shares of its common stock (see Note 13).
+Added: The Company received $ 166.4 million in net proceeds from the issuance of the 2027 Notes after deducting the initial purchasers’ fees and the Company’s offering expenses.
+Added: The 2027 Notes bear cash interest at a rate of 5.00 % per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2023.
+Added: The 2027 Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding September 15, 2027, only under the following circumstances:
+Added: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2023 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price for the 2027 Notes on each applicable trading day;
+Added: (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the 2027 Indenture) per $1,000 principal amount of the 2027 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate for the 2027 Notes on each such trading day;
+Added: (3) if the Company calls such 2027 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2027 Notes called (or deemed called) for redemption;
+Added: and (4) upon the occurrence of specified corporate events as set forth in the 2027 Indenture.
+Added: On or after September 15, 2027, until the close of business on the business day immediately preceding the maturity date (December 15, 2027), holders of the 2027 Notes may convert all or any portion of their 2027 Notes at any time, regardless of the foregoing conditions.
+Added: Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the 2027 Indenture.
+Added: The conversion rate for the 2027 Notes will initially be 80.0000 shares of the Company’s common stock per $1,000 principal amount of 2027 Notes, which is equivalent to an initial conversion price of $ 12.50 per share of common stock.
+Added: The initial conversion price of the 2027 Notes represents a conversion premium of 25 % of the public offering price in the Company’s concurrent common stock offering that closed on December 20, 2022 (see Note 13).
+Added: The conversion rate for the 2027 Notes is subject to adjustment under certain circumstances in accordance with the terms of the 2027 Indenture.
+Added: In addition, following certain corporate events that occur prior to the maturity date of the 2027 Notes or if the Company delivers a notice of redemption in respect of the 2027 Notes, the Company will, under certain circumstances, increase the conversion rate of the 2027 Notes for a holder who elects to convert its 2027 Notes (or any portion thereof) in connection with such a corporate event or convert its 2027 Notes called (or deemed called) for redemption during the related redemption period (as defined in the 2027 Indenture), as the case may be.
+Added: The Company may not redeem the 2027 Notes prior to December 22, 2025.
+Added: The Company may redeem for cash all or any portion of the 2027 Notes, at its option, on or after December 22, 2025, if the last reported sale price of the common stock has been at least 130 % of the conversion price for the 2027 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the 2027 Notes to be redeemed, plus accrued and unpaid interest, to, but excluding, the redemption date.
+Added: If the Company redeems less than all the outstanding 2027 Notes, at least $ 50 million aggregate principal amount of 2027 Notes must be outstanding and not subject to redemption as of the date of the relevant notice of redemption.
+Added: No sinking fund is provided for the 2027 Notes.
+Added: If the Company undergoes a Fundamental Change (as defined in the 2027 Indenture), holders may require, subject to certain conditions and exceptions as set forth in the 2027 Indenture, the Company to repurchase for cash all or any portion of their 2027 Notes at a Fundamental Change repurchase price equal to 100 % of the principal amount of the 2027 Notes to be repurchased, plus accrued and unpaid interest, to, but excluding, the Fundamental Change repurchase date.
+Added: If a holder of the 2027 Notes converted upon a Make-Whole Fundamental Change (as described in the 2027 Indenture), they may be eligible to receive a make-whole premium through an increase to the conversion rate up to a maximum of 20.0000 shares per $1,000 principal amount of 2027 Notes (subject to other adjustments as described in the 2027 Indenture).
+Added: In accounting for the issuance of the 2027 Notes, the Company determined that the scope exceptions provided under ASC 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”) apply to all but one of the conversion features embedded in the 2027 Notes.
+Added: This remaining conversion feature, which is associated with a Fundamental Change of the Company, was determined to have a de minimis value as of December 31, 2022.
+Added: The initial purchasers’ fees and the Company’s issuance costs related to the 2027 Notes totaled $ 8.8 million, which were recorded as a reduction to the 2027 Notes on the consolidated balance sheet.
+Added: The $ 8.8 million of debt issuance costs is being amortized and recognized as additional interest expense over the five-year contractual term of the 2027 Notes using an effective interest rate of 6.2 %.
+Added: 2023 Convertible Notes
+Added: In 2016, the Company issued $ 325 million aggregate principal amount of convertible senior unsecured notes that matured on February 1, 2023 (the “2023 Notes”).
+Added: The 2023 Notes were senior unsecured debt obligations and were issued at par.
+Added: The Company repaid the outstanding principal amount of $ 325 million together with accrued but unpaid interest on the maturity date.
+Added: The repayment was funded by the issuance of the 2027 Notes and the concurrent common stock offering, as well as cash on hand.
The 2023 Notes were issued pursuant to an indenture dated January 29, 2016 (the “2023 Indenture”) between the Company and the trustee.
The Company received $ 315.0 million in net proceeds from the offering after deducting underwriting fees and offering expenses.
−Removed: The Notes bear cash interest at a rate of 3.75 %, payable on February 1 and August 1 of each year, beginning on August 1, 2016.
−Removed: The Notes are not redeemable prior to maturity and are convertible into shares of the Company’s common stock.
−Removed: As a result of the Company’s one-for-twenty reverse stock split in 2019 and pursuant to Section 14.04(a) of the Indenture, the Notes are initially convertible into approximately 2,385,800 shares of the Company’s common stock based on the initial conversion rate of 7.3411 shares of the Company’s common stock per $1,000 principal amount of the Notes.
+Added: The 2023 Notes bore cash interest at a rate of 3.75 %, payable on February 1 and August 1 of each year.
+Added: The 2023 Notes were not redeemable prior to maturity and were convertible into shares of the Company’s common stock.
+Added: As a result of the Company’s one-for-twenty reverse stock split in 2019 and pursuant to Section 14.04(a) of the 2023 Indenture, the 2023 Notes were initially convertible into approximately 2,385,800 shares of the Company’s common stock based on the initial conversion rate of 7.3411 shares of the Company’s common stock per $1,000 principal amount of the 2023 Notes.
This represents an initial conversion price of approximately $ 136.20 per share of the Company’s common stock, representing an approximate 22.5 % conversion premium based on the last reported sale price of the Company’s common stock of $ 111.20 per share on January 25, 2016.
−Removed: In addition, the holders of the Notes may require the Company to repurchase the Notes at par value plus accrued and unpaid interest following the occurrence of a Fundamental Change (as described in the Indenture).
−Removed: If a holder of the Notes converts upon a Make-Whole Adjustment Event (as described in the Indenture), they may be eligible to receive a make-whole premium through an increase to the conversion rate up to a maximum of 8.9928 shares per $1,000 principal amount of Notes (subject to other adjustments as described in the Indenture).
−Removed: The Notes are accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options (“ASC 470-20”) and ASC 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”).
+Added: In addition, the holders of the 2023 Notes may have required the Company to repurchase the 2023
+Added: Notes at par value plus accrued and unpaid interest following the occurrence of a Fundamental Change (as described in the 2023 Indenture).
+Added: If a holder of the 2023 Notes converted upon a Make-Whole Adjustment Event (as described in the 2023 Indenture), they may have been eligible to receive a make-whole premium through an increase to the conversion rate up to a maximum of 8.9928 shares per $1,000 principal amount of 2023 Notes (subject to other adjustments as described in the 2023 Indenture).
+Added: The 2023 Notes are accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options (“ASC 470-20”) and ASC 815-40.
Under ASC 815-40, to qualify for equity classification (or non-bifurcation, if embedded) the instrument (or embedded feature) must be both (1) indexed to the issuer’s stock and (2) meet the requirements of the equity classification guidance.
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In connection with the issuance of the 2023 Notes, the Company also paid $ 38.5 million, including expenses, to enter into privately negotiated capped call transactions with certain financial institutions (the “capped call transactions”).
−Removed: The capped call transactions are generally expected to reduce the potential dilution upon conversion of the Notes in the event that the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions, which initially corresponds to the conversion price of the Notes, and is subject to anti-dilution adjustments generally similar to those applicable to the conversion rate of the Notes.
−Removed: The cap price of the capped call transactions will initially be $ 194.60 per share, which represented a premium of approximately 75 % based on the last reported sale price of the Company’s common stock of $ 111.20 per share on January 25, 2016, and is subject to certain adjustments under the terms of the capped call transactions.
−Removed: If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price, there would nevertheless be dilution upon conversion of the Notes to the extent that such market price exceeds the cap price.
−Removed: The Company evaluated the capped call transactions under ASC 815-10, Derivatives and Hedging – Overall and determined that it should be accounted for as a separate transaction and that the capped call transactions will be classified as an equity instrument.
+Added: The capped call transactions expired by their terms on January 27, 2023.
+Added: The capped call transactions were generally expected to reduce the potential dilution upon conversion of the 2023 Notes in the event that the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, was greater than the strike price of the capped call transactions, which initially corresponded to the conversion price of the 2023 Notes, and was subject to anti-dilution adjustments generally similar to those applicable to the conversion rate of the 2023 Notes.
+Added: The cap price of the capped call transactions was initially $ 194.60 per share, which represented a premium of approximately 75 % based on the last reported sale price of the Company’s common stock of $ 111.20 per share on January 25, 2016, and was subject to certain adjustments under the terms of the capped call transactions.
+Added: If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeded the cap price, there would nevertheless have been dilution upon conversion of the 2023 Notes to the extent that such market price exceeded the cap price.
+Added: The Company evaluated the capped call transactions under ASC 815-10, Derivatives and Hedging – Overall and determined that they should be accounted for as a separate transaction and that the capped call transactions would be classified as an equity instrument.
The Company incurred approximately $ 10.0 million of debt issuance costs in 2016 relating to the issuance of the 2023 Notes, which were recorded as a reduction to the 2023 Notes on the consolidated balance sheet.
−Removed: The $ 10.0 million of debt issuance costs is being amortized and recognized as additional interest expense over the seven-year contractual term of the Notes on a straight-line basis, which approximates the effective interest rate method.
+Added: The $ 10.0 million of debt issuance costs was amortized and recognized as additional interest expense over the seven-year contractual term of the 2023 Notes on a straight-line basis, which approximated the effective interest rate method.
The Company also incurred $ 0.9 million of expenses related to the capped call transactions, which were recorded as a reduction to additional paid-in-capital.
−Removed: Total convertible notes payable consisted of the following at (in thousands):
−Removed: Principal amount of Notes $ 325,000 $ 325,000
−Removed: Unamortized debt issuance costs ( 1,542 ) ( 2,965 )
−Removed: Total convertible notes payable $ 323,458 $ 322,035
−Removed: Interest expense incurred in connection with the Notes consisted of the following (in thousands):
−Removed: Year Ended December 31,
−Removed: 2021 2020 2019
−Removed: Coupon interest at 3.75 %
−Removed: $ 12,188 $ 12,188 $ 12,188
−Removed: Amortization of debt issuance costs 1,424 1,424 1,424
−Removed: Total interest expense on Notes $ 13,612 $ 13,612 $ 13,612
Note 12 – Preferred Stock
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Note 13 – Stockholders’ Equity
−Removed: In June 2021, the Company entered into an At Market Issuance Sales Agreement (the "June 2021 Sales Agreement"), which allows it to issue and sell up to $ 500 million in gross proceeds of shares of its common stock, and terminated its existing At Market Issuance Sales agreement.
−Removed: As of December 31, 2021, no shares had been sold under the June 2021 Sales Agreement.
−Removed: During 2021 and 2020, the Company sold 2.6 million and 32.4 million, respectively, of shares of its common stock resulting in net proceeds of approximately $ 565 million and $ 877 million, respectively, under its various At Market Issuance Sales Agreement.
−Removed: Note 11 – Other Financial Information
−Removed: Prepaid Expenses and Other Current Assets
−Removed: Prepaid expenses and other current assets consist of the following at December 31 (in thousands):
−Removed: Prepaid expenses $ 120,029 $ 171,602
−Removed: Other current assets 53,491 9,662
−Removed: Prepaid expenses and other current assets $ 173,520 $ 181,264
−Removed: Property and Equipment, net
−Removed: Property and equipment is comprised of the following at December 31 (in thousands):
−Removed: Land and buildings $ 83,534 $ 79,096
−Removed: Machinery and equipment 119,998 31,609
−Removed: Leasehold improvements 10,282 9,684
−Removed: Computer hardware 9,670 6,126
−Removed: Construction in progress 35,114 71,232
−Removed: 258,598 197,747
−Removed: accumulated depreciation ( 29,902 ) ( 17,793 )
−Removed: Property and equipment, net $ 228,696 $ 179,954
−Removed: Approximately $ 168.0 million of net assets used in operations were located in the Czech Republic.
−Removed: Depreciation expense was approximately $ 12.5 million, $ 4.3 million, and $ 5.1 million for the years ended December 31, 2021, 2020, and 2019, respectively.
−Removed: Accrued Expenses
−Removed: Accrued expenses consist of the following at December 31 (in thousands):
−Removed: Employee benefits and compensation $ 38,419 $ 20,752
−Removed: Research and development accruals 577,100 99,994
−Removed: Other accrued expenses 58,212 16,644
−Removed: Accrued expenses $ 673,731 $ 137,390
−Removed: Note 12 – Revenue
−Removed: The Company recognizes revenue from the performance of research and development activities under government contracts and grant, license, and clinical development agreements, and from royalties under its collaboration and license agreements that include the sale of Matrix-M TM adjuvant.
−Removed: The Company's accounts receivable included $ 419.7 million and $ 262.0 million related to amounts that were billed to customers as of December 31, 2021 and December 31, 2020, respectively.
−Removed: Accounts receivable also included $ 35.3 million related to amounts which had not yet been billed to customers as of December 31, 2021.
−Removed: There were no amounts which had not yet been billed to customers as of December 31, 2020.
−Removed: During the year ended December 31, 2021, changes in the Company's accounts receivables and deferred revenue balances were as follows (in thousands):
−Removed: December 31, 2020 Additions Deductions December 31, 2021
−Removed: Contract receivables:
−Removed: Accounts receivable $ 262,012 2,432,268 ( 2,239,287 ) $ 454,993
−Removed: Contract liabilities
−Removed: Deferred revenue (1)
−Removed: $ 273,228 1,598,152 ( 275,908 ) $ 1,595,472
−Removed: (1) Amount is comprised of $ 1.4 billion of current Deferred revenue and $ 172.5 million of non-current Deferred revenue.
−Removed: The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties, was approximately $ 8 billion as of December 31, 2021.
−Removed: The timing to fulfill performance obligations related to grant agreements will depend on the results of the Company's research and development activities, including clinical trials.
−Removed: The timing to fulfill performance obligations related to advance purchase agreements (“APAs”) will depend on timing of product manufacturing, delivery, and receipt of marketing authorizations.
−Removed: The remaining unfilled performance obligations are expected to be fulfilled in less than one year .
−Removed: As of December 31, 2021, deferred revenue of $ 1.6 billion primarily related to upfront payments under APAs.
−Removed: The upfront payments are intended to assist the Company in funding investments related to building out and operating its manufacturing and distribution network, among other expenses, in support of its global supply commitment.
−Removed: Such upfront payments generally become non-refundable upon our achievement of certain development and commercial milestones.
−Removed: However, certain of the APAs may be terminated by the counterparty if the Company does not timely achieve requisite regulatory approval for NVX-CoV2373 in the relevant jurisdictions under such agreements.
−Removed: If the APAs were terminated, the refundable portion of the upfront payments would be repaid.
−Removed: The Company recognized grant revenue as follows (in thousands):
−Removed: Year Ended December 31,
−Removed: government partnership (a)
−Removed: $ 788,953 $ 204,727
−Removed: 21,683 12,519
−Removed: 135,445 223,158
−Removed: Total grant revenue $ 948,709 $ 453,210
−Removed: government partnership formerly known as OWS
−Removed: Government Partnership
−Removed: In July 2020, the Company entered into a Project Agreement (the “Project Agreement”) with Advanced Technology International, Inc.
−Removed: (“ATI”), the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with OWS.
−Removed: OWS is a partnership among components of the U.S.
−Removed: Department of Health and Human Services and the U.S.
−Removed: Department of Defense working to accelerate the development, manufacturing, and distribution of COVID-19 vaccines,
−Removed: therapeutics, and diagnostics.
−Removed: The Project Agreement relates to the Base Agreement the Company entered into with ATI in June 2020 (the “Base Agreement,” together with the Project Agreement, the “OWS Agreement”).
−Removed: The OWS Agreement requires the Company to conduct certain clinical, regulatory, and other activities, including a pivotal Phase 3 clinical trial to determine the safety and efficacy of NVX-CoV2373, and to manufacture and deliver to the U.S.
−Removed: government 100 million doses of the vaccine candidate.
−Removed: Funding under the OWS Agreement is payable to the Company for various development, clinical trial, manufacturing, regulatory, and other activities.
−Removed: The OWS Agreement contains terms and conditions that are customary for U.S.
−Removed: government agreements of this nature, including provisions giving the U.S.
−Removed: government the right to terminate the Base Agreement and/or the Project Agreement based on a reasonable determination that the funded project will not produce beneficial results commensurate with the expenditure of resources and that termination would be in the U.S.
−Removed: government’s interest.
−Removed: If the Project Agreement is terminated prior to completion, the Company is entitled to be paid for work performed and costs or obligations incurred prior to termination and consistent with the terms of the OWS Agreement.
−Removed: In July 2021, the U.S.
−Removed: government instructed the Company to prioritize alignment with the U.S.
−Removed: Food and Drug Administration (“FDA”) on the Company's analytic methods before conducting additional U.S.
−Removed: manufacturing and further indicated that the U.S.
−Removed: government will not fund additional U.S.
−Removed: manufacturing until such agreement has been made.
−Removed: In the third quarter of 2021, the Company updated its estimate-at-completion to reflect the impact of the change to the recognition of the fixed fee under the contract.
−Removed: government also instructed the Company to proceed with work under the OWS Agreement related to all other activities, including ongoing clinical trials and nonclinical studies, regulatory interactions, analytics/assays and characterization of manufactured vaccine, and project management.
−Removed: In October 2021 and January 2022, the U.S.
−Removed: government extended the prescribed time to meet its July 2021 instructions until April 2022.
−Removed: The performance period under the Project Agreement extends through 2023 to cover clinical trial activities, subject to early termination by the U.S.
−Removed: government or extension by mutual agreement of the parties.
−Removed: Under the OWS Agreement, the Company was originally entitled to receive funding of up to $ 1.75 billion to support certain activities related to the development of NVX-CoV2373 and the manufacture and delivery of the vaccine candidate to the U.S.
−Removed: Pursuant to the OWS Agreement, the Company is authorized to make expenditures or incur obligations of up to $ 1.75 billion.
−Removed: In August 2021, the Company's OWS agreement was amended to increase the contract ceiling by $ 52.9 million for a revised total of $ 1.8 billion.
−Removed: The agreement’s authorized funding remains unchanged at $ 1.75 billion for support of certain activities related to the development of NVX-CoV2373 and the manufacture and delivery of 100 million doses of the vaccine candidate to the U.S.
−Removed: As of December 31, 2021, the Company had recognized $ 1.0 billion in revenue related to the OWS Agreement since the inception of the contract, leaving $ 0.8 billion remaining to spend.
−Removed: The Company and the U.S.
−Removed: government will determine the timing and amounts for delivery of NVX-CoV2373 doses upon U.S authorization and the Company intends to pursue additional U.S.
−Removed: procurement agreements for supply of NVX-CoV2373 doses.
−Removed: Department of Defense
−Removed: In June 2020, the Company entered into a letter contract that was later amended in January 2021 (the “DoD Contract”) with the DoD Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (“JPEO-CRBND-EB”), under which JPEO-CRBND-EB agreed to provide funding of up to $ 45.7 million to the Company to support the manufacture of NVX-CoV2373.
−Removed: Under the DoD Contract, the Company is authorized to make expenditures or incur obligations up to the full amount of the funding.
−Removed: Under the DoD Contract, the Company is expected to deliver 10 million doses of NVX-CoV2373 to the DoD.
−Removed: The 10 million doses of NVX-CoV2373 may be used in Phase 2/3 clinical trials or under an EUA, if approved by the FDA.
−Removed: Pursuant to the DoD Contract, if NVX-CoV2373 is approved by the FDA, the DoD is entitled to most-favored customer status for a period of five years from the award of the DoD Contract, meaning that the Company cannot give any comparable commercial client in the United States more favorable pricing than the DoD under similar transactional circumstances.
−Removed: Coalition for Epidemic Preparedness Innovations
−Removed: In May 2020, the Company entered into a restated funding agreement which was amended in November 2020 (the “CEPI Funding Agreement”) with CEPI, under which CEPI agreed to provide funding of up to $ 399.5 million to the Company to support the development of NVX-CoV2373.
−Removed: The CEPI Funding Agreement provides up to $ 257.0 million in Grant Funding and up to $ 142.5 million in Forgivable Loan Funding, which are loans in the form of one or more forgivable no-interest term loans in order to prepay certain manufacturing activities and are not subject to restrictive or financial covenants.
−Removed: Payments received under the CEPI Forgivable Loan Funding are only repayable if the proceeds of sales to one or more third parties of NVX-CoV2373 cover the Company’s costs of manufacturing such vaccine candidate, not including manufacturing costs funded by CEPI.
−Removed: The Company anticipates making repayments starting in 2022.
−Removed: Under the terms of the CEPI Funding Agreement, among other things, the Company and CEPI agreed on the importance of global equitable access to any vaccines produced pursuant to the CEPI Funding Agreement.
−Removed: Any such vaccines,
−Removed: if approved, are expected to be procured and allocated through global mechanisms under discussion as part of the Access to COVID-19 Tools (ACT) Accelerator, an international initiative launched by the World Health Organization (“WHO”), Gavi the Vaccine Alliance, CEPI, and other global non-governmental organizations and governmental leaders in 2020.
−Removed: The scope and continuation of the CEPI Funding Agreement may be amended depending on ongoing developments of the COVID-19 outbreak and the success of NVX-CoV2373 relative to other third-party COVID-19 vaccine candidates or treatments.
−Removed: If the WHO, CEPI, or a regulatory authority having jurisdiction over a clinical trial of NVX-CoV2373 determines that a third-party product candidate has substantially greater potential than a Company vaccine product, the Company must cease its clinical trial in the relevant region, and will be reimbursed for any costs incurred as a result thereof.
−Removed: In addition, CEPI has the right to unilaterally terminate the CEPI Funding Agreement if CEPI reasonably determines that (i) there are material safety, regulatory, or ethical issues with the development of NVX-CoV2373, (ii) NVX-CoV2373 development should be limited in scope or terminated, (iii) the Company becomes unable to discharge its obligations under the agreement, (iv) the Company fails to meet certain milestones, or (v) the Company commits fraud or a financial irregularity.
−Removed: Payments received in advance that are related to future performance are deferred and recognized as revenue when the research and development activities are performed.
−Removed: Cash payments received under the CEPI Funding Agreement are restricted as to their use until expenditures contemplated in the funding agreements are incurred.
−Removed: Bill & Melinda Gates Foundation
−Removed: In support of the Company's development of ResVax, the project name for the respiratory syncytial virus (“RSV”) vaccine candidate, in September 2015, the Company entered into the grant agreement with BMGF (the “BMGF Grant Agreement”), under which it was awarded a grant totaling up to $ 89.1 million (the “Grant”).
−Removed: The Grant supported ResVax development activities, including the Company's global Phase 3 clinical trial in pregnant women in their third trimester and other regulatory efforts.
−Removed: The BMGF Grant Agreement was completed as of December 31, 2021.
−Removed: The Company concurrently entered into a Global Access Commitments Agreement (“GACA”) with BMGF as a part of the BMGF Grant Agreement.
−Removed: Under the terms of the GACA, among other things, the Company agreed to make a certain amount of ResVax available and accessible at affordable pricing to people in certain low- and middle-income countries.
−Removed: Unless terminated earlier by BMGF, the GACA will continue in effect until the later of 15 years from its effective date, or 10 years after the first sale of a product under defined circumstances.
−Removed: The term of the GACA may be extended in certain circumstances, by a period of up to five additional years.
−Removed: In July 2020, the Company entered into a grant agreement with BMGF (the “BMGF SA Grant Agreement”) under which it was awarded and received a grant of $ 15.0 million to support a Phase 2b clinical trial in the Republic of South Africa to evaluate the safety, immunogenicity, and potential efficacy of NVX-CoV2373.
−Removed: As of December 31, 2021, the Company had recognized the full amount of the grant as revenue.
−Removed: Payments received in advance that are related to future performance are deferred and recognized as revenue when the research and development activities are performed.
−Removed: Cash payments received under the BMGF Grant Agreement and the BMGF SA Grant Agreement are restricted as to their use until expenditures contemplated in the agreements are incurred.
−Removed: Royalties and Other
−Removed: For the year ended December 31, 2021, the Company recognized $ 178.6 million in revenue related to sales-based royalties.
−Removed: For the year ended December 31, 2020, the Company recognized $ 20.0 million related to a development and commercial milestone payment.
−Removed: Serum Institute of India Private Limited
−Removed: In July 2020, the Company entered into a supply and license agreement with Serum Institute of India Private Limited (“SIIPL”), which was amended in September 2020 and amended and restated in July 2021, under which the Company granted exclusive and non-exclusive licenses to SIIPL for the development, co-formulation, filling and finishing, registration, and commercialization by SIIPL of NVX-CoV2373.
−Removed: SIIPL agreed to purchase Matrix-M™ adjuvant from the Company and the Company granted SIIPL a non-exclusive license to manufacture the antigen drug substance component of NVX-CoV2373 in SIIPL’s licensed territory solely for use in the manufacture of NVX-CoV2373 under the terms of the agreement.
−Removed: The parties will equally split the revenue from sale of NVX-CoV2373 by SIIPL in its licensed territory, net of agreed costs.
−Removed: The Company granted to SIIPL (i) an exclusive license in India during the agreement and (ii) a non-exclusive license (a) during the “Pandemic Period” (as declared by the WHO) in all countries other than specified countries designated by the World Bank as upper-middle or high-income countries, with respect to which the Company retains rights, and (b) after the Pandemic Period, in only those countries designated as low or middle-income by the World Bank.
−Removed: Following the Pandemic Period, the Company may notify SIIPL of any bona fide opportunities for the Company to license NVX-CoV2373 to a third party in such low and middle-
−Removed: income countries and SIIPL would have an opportunity to match or improve such third-party terms, failing which, the Company would have the discretion to remove one or more non-exclusive countries from SIIPL’s license.
−Removed: In October 2021, the Company entered into a supply agreement and a contract development manufacturing agreement with SIIPL and Serum Life Sciences Limited ("SLS") under which SIIPL and SLS will supply the Company with NVX-CoV2373 for commercialization in certain territories.
−Removed: Takeda Pharmaceutical Company Limited
−Removed: In February 2021, the Company finalized a collaboration and license agreement with Takeda Pharmaceutical Company Limited (“Takeda”), under which the Company granted Takeda an exclusive license to develop, manufacture, and commercialize NVX-CoV2373 in Japan.
−Removed: Under the agreement, Takeda purchases Matrix-M™ adjuvant from the Company to manufacture doses of NVX-CoV2373 and the Company is entitled to receive payments from Takeda based on the achievement of certain development and commercial milestones, as well as a portion of net profits from the sale of NVX-CoV2373.
−Removed: In September 2021, Takeda finalized an agreement with the Government of Japan’s Ministry of Health, Labour and Welfare ("MHLW") for the purchase of 150 million doses of NVX-CoV2373.
−Removed: The announcement followed an update from MHLW on its ongoing efforts to secure coronavirus vaccine for the citizens of Japan.
−Removed: These efforts include vaccine procurement by Takeda pursuant to the terms of the collaboration and license agreement that the Company entered into with Takeda in February 2021.
−Removed: In 2020, the Company recognized revenue as a result of achieving a development milestone from the Takeda arrangement in the amount of $ 20.0 million, which is included in Royalties and other revenue on the Statements of Operations.
−Removed: The Company is eligible for a future milestone payment of an additional $ 20.0 million upon regulatory approval in Japan.
−Removed: SK bioscience, Co., Ltd.
−Removed: In February 2021, the Company finalized an expanded collaboration and license agreement with SK bioscience, Co., Ltd.
−Removed: ("SK bioscience") to manufacture and commercialize NVX-CoV2373 for sale to the government of Korea.
−Removed: Concurrently, SK bioscience finalized an APA with the Korean government to supply 40 million doses of NVX-CoV2373 to the Republic of Korea beginning in 2021.
−Removed: The agreement is in addition to the Company's existing manufacturing arrangement with SK bioscience entered into in August 2020.
−Removed: Under the collaboration agreement, SK bioscience was granted an exclusive license to develop, manufacture, and commercialize NVX-CoV2373 in the Republic of Korea.
−Removed: SK bioscience will pay the Company a tiered royalty in the low to middle double-digit range on the sale of NVX-CoV2373.
−Removed: In May 2021, the Company entered a non-binding Memorandum of Understanding with the Ministry of Health and Welfare of Korea and SK bioscience to explore further cooperation in the development and manufacturing of vaccines, including NVX-CoV2373, and to potentially explore the development of new vaccine products with SK bioscience, including COVID-19 variant vaccines and/or an influenza/COVID-19 combination vaccine.
−Removed: SK bioscience expanded its capacity to manufacture the antigen component of NVX-CoV2373 and, in December 2021, the Company amended the collaboration and license agreement to grant a non-exclusive license to cover Thailand and Vietnam, subject to a low to middle double-digit royalty, and for SK biosciences to supply the antigen component of NVX-CoV2373 to the Company for use in the final drug product globally, including product distributed by the COVAX Facility.
−Removed: Advance Purchase Agreements (APAs)
−Removed: During the years ended December 31, 2021 and 2020, the Company entered into various APAs for NVX-CoV2373.
−Removed: Under the terms of the Company's advance purchase agreements, government counterparties make upfront payments and have certain termination rights, or rights to reduce or cancel orders, if regulatory approval for the vaccine is not received or if supply is materially interrupted, delayed, or deferred.
−Removed: The Company records such upfront payments as deferred revenue and will recognize revenue when the vaccine is delivered to its customers.
−Removed: As of December 31, 2021 and 2020, the Company had deferred revenue related to APAs of $ 1.6 billion and $ 45.0 million, respectively.
−Removed: Under the terms of the APA with Gavi and a separate purchase agreement between Gavi and SIIPL, 1.1 billion doses of NVX-CoV2373 are to be made available to countries participating in the COVAX Facility.
−Removed: The Company expects to manufacture and distribute 350 million doses of NVX-CoV2373 to countries participating under the COVAX Facility.
−Removed: Under a separate purchase agreement with Gavi, SIIPL is expected to manufacture and deliver the balance of the 1.1 billion doses of NVX-CoV2373 for low- and middle-income countries participating in the COVAX Facility.
−Removed: The Company expects to deliver doses with antigen and adjuvant manufactured at facilities directly funded under the Company's funding agreement with CEPI, with initial doses supplied by SIIPL and SLS under a supply agreement.
−Removed: The Company expects to supply significant doses that Gavi would allocate to low-, middle- and high-income countries, subject to certain limitations, utilizing a tiered pricing schedule and Gavi may prioritize such doses to low- and middle- income countries, at lower prices.
−Removed: Additionally, the Company may provide additional doses of NVX-CoV2373, to the extent available from CEPI funded manufacturing facilities, in the event that SIIPL cannot materially deliver expected vaccine doses to the COVAX Facility.
−Removed: Under the agreement, the Company received an upfront payment from Gavi of $ 350.0 million in 2021 and has recorded a receivable as of December 31, 2021, for
−Removed: an additional $ 350.0 million because the Company secured EUL for NVX-CoV2373 by the WHO in December 2021, which are recorded as deferred revenue.
−Removed: The Company also has an APA with the European Commission acting on behalf of various European Union member states to supply a minimum of 20 million and up to 100 million initial doses of NVX-CoV2373, with the option for the Commission to purchase an additional 100 million doses up to a maximum aggregate of 200 million doses in one or more tranches, through 2023.
−Removed: Under the terms of the APA, the Company agreed to manufacture the vaccine in facilities located in the European Union and ensure continued efficacy of the vaccine against variants of the SARS-CoV-2 virus.
−Removed: Pursuant to the terms of the APA, the Company is prohibited from supplying NVX-CoV2373 to any third party if such delivery would impede or limit the fulfillment of the Company’s obligations to the European Commission under the APA, except with respect to the Company’s obligations under its APA with Gavi.
+Added: In December 2022, the Company completed a public offering of 7,475,000 shares of its common stock, including 975,000 shares of common stock that were issued upon the exercise in full of the option to purchase additional shares granted to the underwriters, at a price of $ 10.00 per share resulting in net proceeds, net of offering costs of $ 4.9 million, of approximately $ 70 million.
+Added: The Company completed this public offering concurrent with the issuance of the 2027 Notes (see Note 11).
+Added: In June 2021, the Company entered into an At Market Issuance Sales Agreement (the "June 2021 Sales Agreement"), which allows it to issue and sell up to $ 500 million in gross proceeds of shares of its common stock, and terminated its then-existing At Market Issuance Sales Agreement.
+Added: As of December 31, 2022, the remaining balance available under the June 2021 Sales Agreement was approximately $ 318 million.
+Added: During the years ended December 31, 2022, 2021, and 2020, the Company sold 2.2 million, 2.6 million, and 32.4 million, respectively, of shares of its common stock resulting in net proceeds of approximately $ 179 million, $ 565 million, and $ 877 million, respectively, under its various At Market Issuance Sales Agreements.
Note 14 – Stock-Based Compensation
4 unchanged sentences
The 2015 Plan will expire on March 4, 2025.
+Added: As of December 31, 2022, there were 3.8 million shares available for issuance under the 2015 Plan.
The Amended and Restated 2005 Stock Incentive Plan (“2005 Plan”) expired in February 2015 and no new awards may be made under such plan, although awards will continue to be outstanding in accordance with their terms.
−Removed: The 2015 Plan permits and the 2005 Plan permitted the grant of stock options (including incentive stock options), restricted stock, stock appreciation rights, and restricted stock units.
+Added: The 2015 Plan permits and the 2005 Plan permitted the grant of stock options (including incentive stock options), restricted stock, SARs, and RSUs.
In addition, under the 2015 Plan, unrestricted stock, stock units, and performance awards may be granted.
−Removed: Stock options and stock appreciation rights generally have a maximum term of 10 years and may be or were granted with an exercise price that is no less than 100 % of the fair market value of the Company’s common stock at the time of grant.
+Added: Stock options and SARs generally have a maximum term of 10 years and may be or were granted with an exercise price that is no less than 100 % of the fair market value of the Company’s common stock at the time of grant.
Grants of stock options are generally subject to vesting over periods ranging from one to four years .
2 unchanged sentences
2022 2021 2020
+Added: Cost of sales $ 1,032 $ — $ —
Research and development 66,565 86,928 55,955
−Removed: General and administrative 96,698 72,080 8,612
+Added: Selling, general, and administrative 62,703 96,698 72,080
Total stock-based compensation expense $ 130,300 $ 183,626 $ 128,035
−Removed: As of December 31, 2021, there was approximately $ 190 million of total unrecognized compensation expense related to unvested stock options, stock appreciation rights, restricted stock units and the Employee Stock Purchase Plan, as amended (the “ESPP”).
−Removed: This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of 1.2 years and will be allocated between research and development and general and administrative expenses accordingly.
−Removed: This estimate does not include the impact of other possible stock-based awards that may be made during future periods and awards that require approval by the stockholders.
−Removed: The aggregate intrinsic value represents the total intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money stock options and stock appreciation rights) that would have been received by the holders had all stock option and stock appreciation rights holders exercised their stock options and stock appreciation rights on December 31, 2021.
+Added: Total stock-based compensation capitalized and included in inventory as of December 31, 2022 was $ 1.7 million.
+Added: There was no stock-based compensation capitalized and included in inventory as of December 31, 2021.
+Added: As of December 31, 2022, there was approximately $ 171 million of total unrecognized compensation expense related to unvested stock options, SARs, RSUs, and the ESPP.
+Added: This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of 1.1 years and will be allocated between cost of sales, research and development, and general and administrative expenses accordingly.
+Added: This estimate does not include the impact of other possible stock-based awards that may be made during future periods.
+Added: The aggregate intrinsic value represents the total intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money stock options and SARs) that would have been received by the holders had all stock option and SARs holders exercised their stock options and SARs on December 31, 2022.
This amount is subject to change based on changes to the closing price of the Company’s common stock.
−Removed: The aggregate intrinsic value of stock options and stock appreciation rights exercises and vesting of restricted stock units for 2021, 2020, and 2019 was $ 453.8 million, $ 187.3 million, and $ 0.5 million, respectively.
+Added: The aggregate intrinsic value of stock options and SARs exercises and vesting of RSUs for the years ending December 31, 2022, 2021, and 2020 was $ 21.4 million, $ 453.8 million, and $ 187.3 million, respectively.
Stock Options and Stock Appreciation Rights
−Removed: The following is a summary of stock options and stock appreciation rights activity under the 2015 Plan and the 2005 Plan for the year ended December 31, 2021:
+Added: The following is a summary of stock options and SARs activity under the 2015 Plan and the 2005 Plan for the year ended December 31, 2022:
2015 Plan 2005 Plan
7 unchanged sentences
Shares exercisable at December 31, 2022 2,892,161 $ 39.58 63,725 $ 112.94
−Removed: Shares available for grant at December 31, 2021 3,716,636
The fair value of stock options granted under the 2015 Plan was estimated at the date of grant or the date upon which the 2015 Plan was approved by the Company’s stockholders for certain stock options granted in 2020 and 2019 using the Black-Scholes option-pricing model with the following assumptions:
9 unchanged sentences
Expected term (in years) 4.0 - 6.3
−Removed: The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and stock appreciation rights outstanding under the 2015 Plan and 2005 Plan as of December 31, 2021 was approximately $ 376 million and 7.7 years, respectively.
−Removed: The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and stock appreciation rights exercisable under the 2015 Plan and 2005 Plan as of December 31, 2020 was approximately $ 108 million and 6.8 years, respectively.
+Added: The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs outstanding under the 2015 Plan and 2005 Plan as of December 31, 2022 was approximately $ 3 million and 7.1 years, respectively.
+Added: The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs exercisable under the 2015 Plan and 2005 Plan as of December 31, 2022 was approximately $ 2 million and 6.6 years, respectively.
Restricted Stock Units
−Removed: The following is a summary of restricted stock units activity for the year ended December 31, 2021:
+Added: The following is a summary of RSU activity for the year ended December 31, 2022:
Shares Per Share
6 unchanged sentences
The ESPP was approved at the Company’s annual meeting of stockholders in June 2013.
−Removed: The ESPP currently authorizes an aggregate of 600,000 shares of common stock to be purchased.
−Removed: The ESPP allows employees to purchase shares of common stock of the Company at each purchase date through payroll deductions of up to a maximum of 15 % of their
−Removed: compensation, at 85 % of the lesser of the market price of the shares at the time of purchase or the market price on the beginning date of an option period (or, if later, the date during the option period when the employee was first eligible to participate).
−Removed: At December 31, 2021, there were 164,495 shares available for issuance under the ESPP.
+Added: The ESPP currently authorizes an aggregate of 1.1 million shares of common stock to be purchased, and the aggregate amount of shares will continue to increase 5 % on each anniversary of its adoption up to a maximum of 1.65 million shares.
+Added: The ESPP allows employees to purchase shares of common stock of the Company at each purchase date through payroll deductions of up to a maximum of 15 % of their compensation, at 85 % of the lesser of the market price of the shares at the time of purchase or the market price on the beginning date of an option period (or, if later, the date during the option period when the employee was first eligible to participate).
+Added: At December 31, 2022, there were 0.7 million shares available for issuance under the ESPP.
The ESPP is considered compensatory for financial reporting purposes.
19 unchanged sentences
Contributions and other expenses related to this plan were $ 2.4 million, $ 1.7 million, and $ 1.0 million in 2022, 2021, and 2020, respectively.
+Added: Note 16 – Other Financial Information
+Added: Prepaid Expenses and Other Current Assets
+Added: Prepaid expenses and other current assets consist of the following at December 31 (in thousands):
+Added: Prepaid expenses $ 160,773 $ 120,029
+Added: Other current assets 76,374 44,619
+Added: Prepaid expenses and other current assets $ 237,147 $ 164,648
+Added: Property and Equipment, net
+Added: Property and equipment is comprised of the following at December 31 (in thousands):
+Added: Land and buildings $ 101,342 $ 83,534
+Added: Machinery and equipment 134,809 119,998
+Added: Leasehold improvements 18,895 10,282
+Added: Computer hardware 4,927 2,612
+Added: Construction in progress 81,566 35,114
+Added: 341,539 251,540
+Added: accumulated depreciation ( 47,292 ) ( 25,799 )
+Added: Property and equipment, net $ 294,247 $ 225,741
+Added: As of December 31, 2022 and 2021, approximately $ 170.0 million and $ 164.0 million, respectively, of net assets used in operations were located in the Czech Republic.
+Added: Depreciation expense was approximately $ 29.1 million, $ 12.5 million, and $ 4.3 million for the years ended December 31, 2022, 2021, and 2020, respectively.
+Added: Accrued Expenses
+Added: Accrued expenses consist of the following at December 31 (in thousands):
+Added: Employee benefits and compensation $ 52,569 $ 38,419
+Added: Research and development accruals 468,214 577,100
+Added: Other accrued expenses 70,375 58,212
+Added: Accrued expenses $ 591,158 $ 673,731
+Added: Other Current Liabilities
+Added: Other current liabilities consist of the following at December 31 (in thousands):
+Added: Refunds to customers $ 210,362 $ —
+Added: Other current liability related to Gavi (see Note 3 and Note 18) 697,384 —
+Added: Other current liabilities 22,309 36,061
+Added: Total other current liabilities $ 930,055 $ 36,061
Note 17 – Income Taxes
−Removed: The Company’s income (loss) from operations before income tax expense by jurisdiction for the years ended December 31 are as follows (in thousands):
+Added: The Company’s income (loss) from operations before income tax provision (benefit) by jurisdiction for the years ended December 31 are as follows (in thousands):
Year Ended December 31,
3 unchanged sentences
Loss before income tax expense $ ( 653,647 ) $ ( 1,714,536 ) $ ( 418,259 )
−Removed: During the year ended December 31, 2021, the Company recognized $ 29.2 million of income tax expense related to foreign withholding tax on royalties.
−Removed: During the years ended December 31, 2020 and 2019, the Company recognized no income tax expense.
+Added: Significant components of the current income tax provision (benefit) are as follows (in thousands):
+Added: Year Ended December 31,
+Added: 2022 2021 2020
+Added: Domestic $ 1,300 $ — $ —
+Added: State and local 503 — —
+Added: Foreign 2,489 29,215 —
+Added: Total current income tax expense $ 4,292 $ 29,215 $ —
+Added: During the years ended December 31, 2022, 2021, and 2020, the Company recognized $ 4.3 million, $ 29.2 million, and no federal, state, and foreign current income tax expense.
+Added: The foreign income tax expense is primarily related to foreign withholding tax on royalties.
+Added: The Company recognized no deferred income tax expense during the years listed above due to a full valuation allowance.
A reconciliation of the provision for income tax to the amount computed by applying the U.S.
6 unchanged sentences
Non-deductible expenses
+Added: ( 1 ) % ( 2 ) % ( 4 ) %
Non-cash stock-based compensation ( 1 ) % 4 % 7 %
+Added: taxation of foreign operations ( 3 ) % — % — %
Foreign tax expense — % ( 1 ) % — %
3 unchanged sentences
Income tax provision ( 1 ) % ( 2 ) % — %
−Removed: As of December 31, 2021, the Company has available federal, state, and foreign net operating losses of $ 3.2 billion, $ 2.8 billion, and $ 127.6 million, respectively, that may be applied against future taxable income.
−Removed: Federal net operating losses of $ 0.9 billion will expire in the years 2022 to 2037.
−Removed: The remaining $ 2.3 billion of federal net operating losses can be carried forward indefinitely.
−Removed: A portion of the foreign net operating losses will begin to expire in 2023.
−Removed: The Company also has research tax credits of $ 44.6 million that continue to expire in 2022.
−Removed: Utilization of the net operating loss carryforwards and credits may be subject to an annual limitation due to ownership changes of the Company.
−Removed: As of December 31, 2021, the Company does not expect such limitation, if any, to impact the use of the net operating losses and business tax credits.
+Added: As of December 31, 2022, the Company has available federal, state, and foreign net operating losses of $ 2.0 billion, $ 0.9 billion, and $ 29.1 million, respectively, that may be applied against future taxable income in the respective jurisdiction.
+Added: The federal net operating losses of $ 2.0 billion can be carried forward indefinitely, although limited to 80% of annual taxable income.
+Added: State net operating losses of $ 0.4 billion have various expiration dates between 2028 and 2042.
+Added: The remaining state net operating losses of $ 0.5 billion can be carried forward indefinitely.
+Added: Approximately $ 15.1 million of the foreign net operating losses will begin to expire in 2024 through 2027.
+Added: The remaining $ 14.0 million of foreign net operating losses can be carried forward indefinitely.
+Added: The Company also has research tax credits of $ 46.0 million that will begin to expire in 2030 through 2052.
+Added: Utilization of the domestic net operating loss carryforwards and research tax credits may be subject to an annual limitation due to potential ownership changes of the Company.
+Added: As of December 31, 2022, the Company does not expect such limitation, if any, to impact the use of these domestic net operating losses and research tax credits.
The Company files income tax returns in the U.S.
−Removed: federal jurisdiction and in various states, as well as in Sweden and the Czech Republic.
+Added: federal jurisdiction and in various states, as well as in foreign jurisdictions such as Sweden and the Czech Republic.
The Company has U.S.
−Removed: tax net operating losses and credit carryforwards that are subject to examination from 2002 through 2021.
+Added: federal and state net operating losses and credit carryforwards that are subject to examination from 2002 through 2022.
The returns in Sweden are subject to examination from 2016 through 2022 and the returns for the Czech Republic are subject to examination from 2019 through 2022.
6 unchanged sentences
Deferred revenue 195,049 20,262
+Added: Inventory reserve 213,076 —
Non-cash stock-based compensation 27,599 24,698
Original discount interest — 1,729
+Added: Capitalized research costs 49,309 —
Other 13,695 11,801
−Removed: Total deferred tax assets 1,027,316 507,318
+Added: Gross deferred tax assets 1,056,799 1,027,316
Valuation allowance ( 1,020,123 ) ( 1,015,333 )
−Removed: Net deferred tax assets $ 11,983 $ 2,530
+Added: Total deferred tax assets $ 36,676 $ 11,983
Deferred tax liabilities:
ROU assets ( 23,330 ) ( 10,071 )
+Added: Fixed assets ( 11,587 ) —
Intangibles ( 1,055 ) ( 1,034 )
1 unchanged sentence
Total deferred tax liabilities $ ( 36,676 ) $ ( 11,983 )
−Removed: Net deferred tax assets $ — $ —
+Added: Net deferred tax assets (liabilities) $ — $ —
The Company has evaluated the positive and negative evidence bearing upon the realization of its deferred tax assets, including its history of significant losses in every year since inception and, in accordance with U.S GAAP, has fully reserved the net deferred tax asset.
−Removed: The Company concluded that realization of its net deferred tax assets is not more-likely-than-not to be realized as of December 31, 2021.
−Removed: The valuation allowance increased by $ 510.5 million and $ 139.0 million for the years ended December 31, 2021 and 2020, respectively, primarily due to the increase in net operating loss carry-forwards and research and development tax credits.
−Removed: On a periodic basis, the Company reassesses the valuation allowance on its deferred income tax assets, weighing positive and negative evidence to assess the recoverability of the deferred tax assets.
−Removed: In 2021, the Company reassessed the valuation allowance and considered negative evidence, including its cumulative losses over the three years ended December 31, 2021, and positive evidence, including its recent regulatory authorizations for NVX-CoV2373.
−Removed: After assessing both the negative and positive evidence, the Company concluded that it should maintain the valuation allowance on its net operating losses and its other deferred tax assets as of December 31, 2021.
+Added: The Company concluded that realization of its net deferred tax assets is not more-likely-than-not to be realized as of December 31, 2022 and 2021.
+Added: The valuation allowance increased by $ 4.8 million and $ 510.5 million for the years ended December 31, 2022 and 2021, respectively.
+Added: On a periodic basis, the Company reassesses the valuation allowance on its deferred income tax assets, weighing positive and negative evidence to assess the recoverability.
+Added: In 2022, the Company reassessed the valuation allowance and considered negative evidence, including its cumulative losses over the three years ended December 31, 2022 and the substantial doubt about the Company’s ability to continue as a going concern through one year from the date that these financial statements are issued, and positive evidence, including its regulatory authorizations for and commercial sales of NVX-CoV2373.
+Added: After assessing both the negative and positive evidence, the Company concluded that it should maintain the valuation allowance on its net operating losses, credits, and its other deferred tax assets as of December 31, 2022.
The release of the valuation allowance, as well as the exact timing and the amount of such release, continue to be subject to, among other things, the Company's level of profitability, revenue growth, clinical program progression, and expectations regarding future profitability.
−Removed: The Company's total deferred tax asset balance subject to the valuation allowance was $ 1.0 billion at December 31, 2021.
−Removed: The Company recognizes the effect of a tax position when it is more likely than not, based on the technical merits, that the tax position will be sustained upon examination.
+Added: The Company's total net deferred tax asset balance subject to the valuation allowance was $ 1.1 billion and $ 1.0 billion as of December 31, 2022 and 2021, respectively.
+Added: The Company recognizes the effect of an income tax position when it is more likely than not, based on the technical merits, that the income tax position will be sustained upon examination.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits in the year ended December 31, 2022, 2021, and 2020 is as follows (in thousands):
9 unchanged sentences
As of December 31, 2022 and 2021, the Company had no accruals for interest or penalties related to income tax matters.
−Removed: The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $ 11.2 million.
−Removed: Note 16 – Related Party Transaction
−Removed: In June 2020, in advance of David M.
−Removed: Mott joining the Company’s Board of Directors, the Company agreed to sell 32,916 shares of common stock to him at a purchase price of $ 45.57 per share, reflecting the closing price of the Company’s common stock on the trading date prior to the date the parties’ agreement regarding the sale, for total gross proceeds of $ 1.5 million.
−Removed: Mott joined the Company’s Board of Directors later in the same month.
+Added: The total amount of unrecognized tax benefits that, if recognized, could affect the effective tax rate was $ 5.2 million and $ 11.2 million as of December 31, 2022 and 2021, respectively.
+Added: However, the Company maintains a full valuation allowance as of December 31, 2022 and 2021 and the recognition of any unrecognized tax benefits would be offset with a change in the valuation allowance and therefore there would be no income statement impact.
+Added: As of December 31, 2022, the Company does not expect a significant change in the recorded unrecognized tax benefits reserve balance during the next twelve months.
+Added: The unrecognized tax benefits are presented in the financial statements as a reduction to the deferred tax assets for all periods.
Note 18 – Commitment and Contingencies
Legal Matters
−Removed: On February 26, 2021, a Novavax stockholder named Thomas Golubinski filed a derivative complaint against members of the Novavax board of directors and members of senior management in the Delaware Court of Chancery, captioned Thomas Golubinski v.
−Removed: Douglas, et al.
+Added: On November 12, 2021, Sothinathan Sinnathurai filed a purported securities class action in the U.S.
+Added: District Court for the District of Maryland (the “Maryland Court”) against the Company and certain members of senior management, captioned Sothinathan Sinnathurai v.
+Added: Novavax, Inc., et al.
+Added: 8:21-cv-02910-TDC (the “Sinnathurai Action”).
+Added: On January 26, 2022, the Maryland Court entered an order designating David Truong, Nuggehalli Balmukund Nandkumar, and Jeffrey Gabbert as co-lead plaintiffs in the Sinnathurai Action.
+Added: The co-lead plaintiffs filed a consolidated amended complaint on March 11, 2022, alleging that the defendants made certain purportedly false and misleading statements concerning the Company’s ability to manufacture NVX-CoV2373 on a commercial scale and to secure the NVX-CoV2373’s regulatory approval.
+Added: The amended complaint defines the purported class as those stockholders who purchased the Company’s securities between February 24, 2021 and October 19, 2021.
+Added: On April 25, 2022, defendants filed a motion to dismiss the consolidated amended complaint.
+Added: On December 12, 2022, the Maryland Court issued a ruling granting in part and denying in part defendants’ motion to dismiss.
+Added: The Maryland Court dismissed all claims against two individual defendants and claims based on certain public statements challenged in the consolidated amended complaint.
+Added: The Maryland Court denied the motion to dismiss as to the remaining claims and defendants, and directed the Company and other remaining defendants to answer within fourteen days .
+Added: On December 27, 2022, the Company filed its answer and affirmative defenses.
+Added: After the Sinnathurai Action was filed, seven derivative lawsuits were filed:
+Added: (i) Robert E.
+Added: 8:21-cv-02996-TDC (the “Meyer Action”), (ii) Shui Shing Yung v.
+Added: 8:21-cv-03248-TDC (the “Yung Action”), (iii) William Kirst, et al.
+Added: 8:22-cv-00024-TDC (the “Kirst Action”), (iv) Amy Snyder v.
+Added: Erck , et al., No.
+Added: 8:22-cv-01415-TDC (the “Snyder Action”), (v) Charles R.
+Added: Blackburn, et al.
+Added: 1:22-cv-01417-TDC (the “Blackburn Action”), (vi) Diego J.
+Added: (the “Mesa Action”), and (vii) Sean Acosta v.
+Added: (the “Acosta Action”).
+Added: The Meyer, Yung, Snyder, and Blackburn Actions were filed in the Maryland Court.
+Added: The Kirst Action was filed in the Circuit Court for Montgomery County, Maryland, and shortly thereafter removed to the Maryland Court by the defendants.
+Added: The Mesa and Acosta Actions were filed in the Delaware Court of Chancery (the “Delaware Court”).
+Added: The derivative lawsuits name members of the Company’s board of directors and certain members of senior management as defendants.
+Added: The Company is deemed a nominal defendant.
+Added: The plaintiffs assert derivative claims arising out of substantially the same alleged facts and circumstances as the Sinnathurai Action.
+Added: Collectively, the derivative complaints assert claims for breach of fiduciary duty, insider selling, unjust enrichment, violation of federal securities law, abuse of control, waste, and mismanagement.
+Added: Plaintiffs seek declaratory and injunctive relief, as well as an award of monetary damages and attorneys’ fees.
+Added: On February 7, 2022, the Maryland Court entered an order consolidating the Meyer and Yung Actions (the “First Consolidated Derivative Action”).
+Added: The plaintiffs in the First Consolidated Derivative Action filed their consolidated derivative complaint on April 25, 2022.
+Added: On May 10, 2022, the Maryland Court entered an order granting the parties’ request to stay all proceedings and deadlines pending the earlier of dismissal or the filing of an answer in the Sinnathurai Action.
+Added: On June 10, 2022, the Snyder and Blackburn Actions were filed.
+Added: On October 5, 2022, the Maryland Court entered an order granting a request by the plaintiffs in the First Consolidated Derivative Action and the Snyder and Blackburn Actions to consolidate all three actions and appoint co-lead plaintiffs and co-lead and liaison counsel (the “Second Consolidated Derivative Action”).
+Added: The co-lead plaintiffs in the Second Consolidated Derivative Action filed a consolidated amended complaint on November 21, 2022.
+Added: On February 10, 2023, defendants filed a motion to dismiss the Second Consolidated Derivative Action.
+Added: On July 21, 2022, the Maryland Court issued a memorandum opinion and order remanding the Kirst Action to state court.
+Added: On December 6, 2022, the parties to the Kirst Action filed a stipulated schedule pursuant to which the plaintiffs were expected to file an amended complaint on December 22, 2022, and either (i) the parties would file a stipulated stay of the Kirst Action or (ii) the defendants would file a motion to stay the case by January 23, 2023.
+Added: The plaintiffs filed an amended complaint on December 30, 2022.
+Added: On January 23, 2023, defendants filed a motion to stay the Kirst action.
+Added: On February 22, 2023, the parties in the Kirst Action filed for the Court’s approval of a stipulation staying the Kirst Action pending the resolution of defendants’ motion to dismiss in the Second Consolidated Derivative Action.
+Added: On February 24, 2023, the Court entered an order staying the Kirst Action until a final judgment in the Second Consolidated Derivative Action.
+Added: The Company takes no position on whether the broader stay entered by the Court in the Kirst Action is likely to be modified to align with the parties’ stipulation.
+Added: On August 30, 2022, the Mesa Action was filed.
+Added: On October 3, 2022, the Delaware Court entered an order granting the parties’ request to stay all proceedings and deadlines in the Mesa Action pending the earlier of dismissal of the Sinnathurai Action or the filing of an answer to the operative complaint in the Sinnathurai Action.
+Added: On January 9, 2023, the court entered an order granting the parties’ request to set a briefing schedule in connection with a motion to stay that defendants intended to file.
+Added: Pursuant to the order, defendants filed a motion to stay on January 18, 2023.
+Added: The plaintiff filed his opposition on February 8, 2023.
+Added: Defendants filed their reply on February 22, 2023.
+Added: On February 28, 2023, the court granted Defendants’ motion to stay.
+Added: On December 7, 2022, the Acosta Action was filed.
+Added: On February 6, 2023, defendants accepted service of the complaint and summons in the Acosta action.
+Added: The financial impact of this claim, as well as the claims discussed above, is not estimable.
+Added: On February 26, 2021, a Company stockholder named Thomas Golubinski filed a derivative complaint against members of the Company’s board of directors and members of senior management in the Delaware Court, captioned Thomas Golubinski v.
+Added: Douglas, et al., No.
2021-0172-JRS.
−Removed: Novavax is deemed a nominal defendant.
+Added: The Company is deemed a nominal defendant.
Golubinski challenged equity awards made in April 2020 and in June 2020 on the ground that they were “spring-loaded,” that is, made at a time when such board members or members of senior management allegedly possessed undisclosed positive material information concerning the Company.
3 unchanged sentences
On June 17, 2021, the Company’s stockholders voted FOR ratification of the April 2020 awards and ratification of the June 2020 awards.
−Removed: Details of the ratification proposals are set forth in the Company’s Definitive Proxy Statement filed with the SEC on May 3, 2021.
−Removed: The results of the vote were disclosed in the Company’s Current Report on Form 8-K filed with the SEC on June 24, 2021.
+Added: Details of the ratification proposals are set forth in the Company’s Definitive Proxy Statement filed on May 3, 2021.
+Added: The results of the vote were disclosed in the Company’s Current Report on Form 8-K filed on June 24, 2021.
Thereafter, the plaintiff stipulated that, as a result of the outcome of the June 17, 2021 vote, the plaintiff no longer intends to pursue the lawsuit or any claim arising from the April 2020 and June 2020 awards.
−Removed: On August 23, 2021, the plaintiff filed a motion seeking an award of attorneys’ fees and expenses, to which the defendants filed an opposition.
−Removed: The action is currently stayed, and upon final resolution of the plaintiff’s motion for an award of fees and expenses, the action will be automatically dismissed.
−Removed: As such, the Company is not expecting any material estimable financial impact of the plaintiff's claim.
−Removed: On November 12, 2021, Sothinathan Sinnathurai filed a purported class action in the U.S.
−Removed: District Court for the District of Maryland against Novavax and certain members of senior management, captioned Sothinathan Sinnathurai v.
−Removed: Novavax, Inc., et al.
−Removed: 8:21-cv-02910-TDC (the “Sinnathurai Action”).
−Removed: The complaint in the Sinnathurai Action alleges that the defendants made certain purportedly false and misleading statements concerning NVX-CoV2373, including with respect to the Company’s manufacturing capabilities and NVX-CoV2373’s regulatory and commercial prospects.
−Removed: The purported class is defined as those who purchased or otherwise acquired Novavax securities between March 2, 2021 and October 19, 2021.
−Removed: The complaint demands an award of damages on behalf of the purported class and attorneys’ fees incurred in connection with the litigation.
−Removed: On January 26, 2022, the court entered an order designating David Truong, Nuggehalli Balmukund Nandkumar, and Jeffrey Gabbert as co-lead plaintiffs in the Sinnathurai Action.
−Removed: The court has ordered the co-lead plaintiffs to file an amended complaint by March 11, 2022.
−Removed: The Company’s response to the amended complaint is due April 25, 2022.
−Removed: After the Sinnathurai Action was filed, three derivative lawsuits were filed and are currently pending in the U.S.
−Removed: District Court for the District of Maryland:
−Removed: 8:21-cv-02996-TDC (the “Meyer Action”), Shui Shing Yung v.
−Removed: 8:21-cv-03248-TDC (the “Yung Action”), and William Kirst, et al.
−Removed: 8:22-cv-00024-TDC (the “Kirst Action”).
−Removed: The derivative lawsuits name members of the board of directors and certain members of senior management as defendants.
−Removed: Novavax is deemed a nominal defendant.
−Removed: The derivative plaintiffs assert derivative claims arising out of substantially the same alleged facts and circumstances as the Sinnathurai Action.
−Removed: Collectively, the derivative complaints assert claims for breach of fiduciary duty, insider selling, unjust enrichment, violation of federal securities law, abuse of control, waste, and mismanagement.
−Removed: Plaintiffs seek declaratory and injunctive relief, as well as an award of monetary damages and attorneys’ fees.
−Removed: Novavax removed the Kirst Action from the Circuit Court for Montgomery County, Maryland.
−Removed: On February 7, 2022, the plaintiffs in the Kirst Action filed a motion to remand the action to state court and, in response, the Company has filed an opposition.
−Removed: The Court also entered an order tolling the defendants’ time to respond to the complaints in the Meyer and Yung Actions pending submission of a joint proposed briefing schedule on any anticipated motion practice in those cases by March 25, 2022.
−Removed: On February 4, 2022, the Court entered an order consolidating the Meyer and Yung Actions.
−Removed: The financial impact of the claims is not estimable.
+Added: On August 23, 2021, the plaintiff filed a motion seeking an award of attorneys’ fees and expenses for $ 1.5 million, to which the defendants filed an opposition.
+Added: On October 18, 2022, the Delaware Court denied the plaintiff’s fee application in its entirety.
+Added: Under a prior Delaware Court order, the case was automatically dismissed with prejudice upon denial of the plaintiff’s fee application.
+Added: On November 14, 2022, Golubinski filed a Notice of Appeal in the Supreme Court of the State of Delaware.
+Added: The plaintiff / appellant filed his opening appellate brief on December 30, 2022.
+Added: The Company filed its responsive brief on January 30, 2023 and the appellant filed his reply brief on February 14, 2023.
+Added: On March 29, 2022, Par Sterile Products, LLC (“Par”) submitted a demand for arbitration against the Company with the American Arbitration Association, alleging that the Company breached certain provisions of the Manufacturing and Services Agreement (the “Par MSA”) that the Company entered into with Par in September 2020 to provide fill-finish manufacturing services for NVX-CoV2373.
+Added: The matter is at a preliminary stage and therefore the potential loss is not reasonably estimable.
+Added: The parties are engaged in discovery and arbitration is scheduled for July 2023.
+Added: While the Company maintains that no breach of the Par MSA has occurred and intends to vigorously defend the matter, if the final resolution of the
+Added: matter is adverse to the Company, it could have a material impact on the Company’s financial position, results of operations, or cash flows.
+Added: On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA based on Gavi’s failure to procure the purchase of 350 million doses of NVX-CoV2373 from the Company as required by the Gavi APA.
+Added: As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses.
+Added: On December 2, 2022, Gavi issued a written notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the Gavi APA.
+Added: Gavi also contends that, based on its purported termination of the Gavi APA, it is entitled to a refund of the Advance Payment Amount less any amounts that have been credited against the purchase price for binding orders placed by a buyer participating in the COVAX Facility.
+Added: As of December 31, 2022, the remaining Gavi Advance Payment Amount of $ 697.4 million, pending resolution of the dispute with Gavi related to a return of the remaining Advance Payment Amount, was reclassified from Deferred revenue to Other current liabilities in the consolidated balance sheet.
+Added: On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above.
+Added: The Company’s response is currently due by March 2, 2023.
+Added: Arbitration is inherently uncertain, and while the Company believes that it is entitled to retain the remaining Advance Payment Amount received from Gavi, it is possible that the Company could be required to refund all or a portion of the remaining Advance Payment Amount from Gavi.
The Company is also involved in various legal proceedings arising in the normal course of business.
9 unchanged sentences
The Company did not accrue obligations that were not reasonably estimable.
−Removed: As of December 31, 2021, the Company had no non-cancelable purchase commitments with a remaining term of more than one year as compared with approximately $ 117 million as of December 31, 2020.
+Added: As of December 31, 2022, the Company had no non-cancelable purchase commitments with a remaining term of more than one year.
Note 19 – Subsequent Events
−Removed: In January 2022, the Company sold 0.4 million shares of its common stock resulting in net proceeds of $ 34.7 million under the June 2021 Sales Agreement, with a remaining balance of $ 464.9 million available thereafter.
−Removed: In January and February 2022, the Company received authorization for Nuvaxovid TM from the regulatory authorities in Canada, Singapore, New Zealand, Great Britain, Australia, and South Korea.
−Removed: In January 2022, the Company submitted a request to the FDA for EUA of NVX-CoV2373.
−Removed: In February 2022, the Company’s Project Agreement with ATI was modified to include a Phase 3 efficacy study with respect to 2019n-CoV-301 in adolescents with a booster component and accordingly, the performance period under the Project Agreement was extended to December 31, 2023.
+Added: On January 5, 2023, the Board of Directors of the Company approved the appointment of John C.
+Added: Jacobs, as President and Chief Executive Officer and a member of the Board, effective as of January 23, 2023.
+Added: Jacobs succeeded Stanley C.
+Added: Erck, who provided the Board with notice on January 5, 2023 of his decision to retire as President and Chief Executive Officer and as a member of the Board, in each case effective as of January 23, 2023.
+Added: On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on claims stemming from the Gavi APA.
+Added: Arbitration is inherently uncertain, and while the Company believes that it is entitled to retain the remaining Advance Payment Amount received from Gavi, it is possible that it could be required to refund all or a portion of the remaining Advance Payment Amount from Gavi (see Note 3 and Note 18).
+Added: On January 31, 2023, the Company funded the outstanding principal amount of $ 325.0 million on the 2023 Notes, due February 1, 2023 and the indenture governing the 2023 Notes was subsequently satisfied and discharged in accordance with its terms.
+Added: The Company’s related “capped call transactions” expired by their terms on January 27, 2023.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.