Information regarding risk and uncertainties related to our business appears in Part I, Item 1A.
−Removed: “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 28, 2023.
−Removed: There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K, other than set forth below.
−Removed: Risks Related to Regulatory and Compliance Matters
−Removed: Our products might fail to meet their primary endpoints in clinical trials, meaning that we will not have the clinical data required to support regulatory approvals.
−Removed: The steps generally required by the FDA before our proposed investigational products may be marketed in the U.S.
−Removed: • performance of preclinical (animal and laboratory) tests;
−Removed: • submission to the FDA of an Investigational New Drug Application, which must become effective before clinical trials may commence;
−Removed: • performance of adequate and well controlled clinical trials to establish the safety and efficacy of the investigational product in the intended target population;
−Removed: • performance of a consistent and reproducible manufacturing process at commercial scale capable of passing FDA inspection;
−Removed: • submission to the FDA of a Biologics License Application (“BLA”) or a New Drug Application;
−Removed: • FDA approval of the BLA or NDA before any commercial sale or shipment of the product.
−Removed: Clinical trials that we undertake in other countries will be subject to similar or equivalent processes and requirements.
−Removed: In Europe, as well as an authorization for the clinical trial itself, it is necessary to obtain the consent of a local ethics committee for each clinical trial site and to provide for publication specific information about the clinical trial and its outcome.
−Removed: If endpoints are not met, this information will be made publicly available and could be damaging to the reputation of the Company.
−Removed: These processes are expensive and can take many years to complete, and we may not be able to demonstrate the safety, purity, potency and efficacy of our vaccine candidates to the satisfaction of regulatory authorities.
−Removed: The start of clinical trials can be delayed or take longer than anticipated for many and varied reasons, many of which are out of our control.
−Removed: Safety concerns may emerge that could lengthen the ongoing clinical trials or require additional clinical trials to be conducted.
−Removed: Promising results in earl y clinical trials may not be replicated in subsequent clinical trials.
−Removed: For example, the first batch of top line results from our Phase 2 CIC clinical trial evaluating safety and immunogenicity of different formulations of CIC and influenza stand-alone vaccine candidates, may not be consistent with top line results from subsequent batches in such trial.
−Removed: Regulatory authorities may also require additional testing, and we may be required to demonstrate that our proposed products represent an improved form of treatment over existing therapies, which we may be unable to do without conducting further clinical trials.
−Removed: Moreover, if a regulatory authority grants regulatory approval of a product, the approval may be limited to specific indications or limited with respect to its distribution.
−Removed: Expanded or additional indications for approved products may not be approved, which could limit our revenue.
−Removed: Foreign regulatory authorities may apply similar limitations or may refuse to grant any approval.
−Removed: Consequently, even if we believe that preclinical and clinical data are sufficient to support regulatory approval for our vaccine candidates, the FDA and foreign regulatory authorities ultimately may not grant approval for commercial sale in their applicable jurisdiction, or may impose regulatory requirements that make further pursuit of approval uneconomical in one or more jurisdictions.
−Removed: If our vaccine candidates are not approved, our ability to generate revenue will be limited, and our business will be adversely affected.
−Removed: Risks Related to our Intellectual Property
−Removed: Our success depends on our ability to maintain the proprietary nature of our technology.
−Removed: Our success in large part depends on our ability to maintain the proprietary nature of our technology and other trade secrets.
−Removed: To do so, we must prosecute and maintain existing patents, obtain new patents and pursue trade secret and other intellectual property protection.
−Removed: We also must operate without infringing the proprietary rights of third-parties or allowing third-parties to infringe our rights.
−Removed: We currently have or have rights to over 560 U.S.
−Removed: and foreign patents and patent applications covering our technologies.
−Removed: However, patent issues relating to pharmaceuticals and biologics involve complex legal, scientific and factual questions.
−Removed: To date, no consistent policy has emerged regarding the breadth of biotechnology patent claims that are granted by the U.S.
−Removed: Patent and Trademark Office or enforced by the federal courts.
−Removed: Therefore, we do not know whether any particular patent applications will result in the issuance of patents, or that any patents issued to us will provide us with any competitive advantage.
−Removed: We also cannot be sure that we will develop additional proprietary products that are patentable.
−Removed: Furthermore, there is a risk that others will independently develop or duplicate similar technology or products or circumvent the patents issued to us.
−Removed: Although our patent filings include claims covering various features of our vaccine candidates, including composition, methods of manufacture and use, our patents do not provide us with complete protection against the development of competing products.
−Removed: Some of our know-how and technology is not patentable.
−Removed: To protect our proprietary rights in unpatentable intellectual property and trade secrets, we require employees, consultants, advisors and collaborators to enter into confidentiality agreements.
−Removed: These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information, which risk has been enhanced by the departure of employees in connection with our global restructuring restructuring and cost reduction plan.
−Removed: Our vaccine candidates could become subject to a product recall which could harm our reputation, business, and financial results.
−Removed: The FDA and similar foreign governmental authorities have the authority to require the recall of certain vaccine candidates.
−Removed: Manufacturers may, under their own initiative, recall a product if any material deficiency in a product is found.
−Removed: A government-mandated or voluntary recall by us or our strategic collaborators could occur as a result of manufacturing errors, design or labeling defects or other deficiencies and issues.
−Removed: For example, we have extended a credit of $64.7 million under the Australia APA for a single lot of NVX-CoV2373 doses sold to the Australian government that upon pre-planned 6-month stability testing was found to have fallen below the defined specifications and the lot was therefore removed from the market.
−Removed: Recalls of any of our vaccines or vaccine candidates would divert managerial and financial resources and have an adverse effect on our financial condition and results of operations.
−Removed: In addition, a recall announcement could harm our reputation with customers and negatively affect our sales, if any.
+Added: “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 28, 2023, and Part II, Item 1A.
+Added: “Risk Factors” of our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, which was filed with the SEC on May 9, 2023.
+Added: There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K, for the fiscal year ended December 31, 2022 and the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023 other than as described below.
Risks Related to Employee Matters, Managing Growth and Information Technology
2 unchanged sentences
Our management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued.
−Removed: At March 31, 2023, we had $636.9 million in cash and cash equivalents and restricted cash.
−Removed: During the three months ended March 31, 2023, we incurred a net loss of $293.9 million and had net cash flows used in operating activities of $325.6 million.
+Added: At June 30, 2023, we had $517.9 million in cash and cash equivalents and restricted cash.
+Added: During the six months ended June 30, 2023, we incurred a net loss of $235.9 million and had net cash flows used in operating activities of $497.5 million.
While our current cash flow forecast for the one-year going concern look forward period estimates that we have sufficient capital available to fund operations, this forecast is subject to significant uncertainty, including as it relates to the following:
−Removed: Our near-term revenue depends on our 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 approvals and commercial adoption.
−Removed: We experienced delays in early 2023 in manufacturing our BA.5 clinical trial materials, which has the potential to delay regulatory approval from the FDA for our vaccine candidate for the Fall 2023 COVID vaccine season.
−Removed: In addition, in January 2023, the U.S.
−Removed: Vaccines and Related Biologics Products Advisory Committee announced its intent to provide the industry with its strain protocol guidance in the second quarter of 2023 for the Fall 2023 COVID vaccine season.
−Removed: To meet potential demand for Fall 2023, we have begun manufacturing an updated COVID-19 variant strain-containing formulation prior to the availability of strain protocol guidance.
−Removed: If such formulation is not consistent with the strain protocol guidance, we will not be able to deliver the appropriate vaccine to our customers in sufficient quantities for the Fall 2023 COVID vaccine season and we will have incurred significant costs for a formulation that we will be unable to sell.
+Added: The Company’s revenue projections depend on its ability to successfully develop, manufacture, distribute and market an updated monovalent 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 authorization, ability to timely deliver doses and commercial adoption and market acceptance.
+Added: Further, failure to meet regulatory milestones, timely obtain supportive recommendations from governmental advisory committees, or achieve product volume or delivery timing obligations under the Company’s advance purchase agreements may require the Company to refund portions of upfront and other payments or result in reduced future payments.
• Funding from the U.S.
4 unchanged sentences
government indicated to us that the award may not be extended past its current period of performance.
−Removed: If the USG Agreement is not amended, as we had previously expected, then we may not receive all of the remaining $ 336.4 million in funding we had previously anticipated pursuant to the USG Agreement.
+Added: If the USG Agreement is not amended, as we had previously expected, then we may not receive all of the remaining $250.6 million in funding as of June 30, 2023 we had previously anticipated pursuant to the USG Agreement.
• Pending Arbitration:
3 unchanged sentences
Management believes that, given the significance of these uncertainties, substantial doubt exists regarding our ability to continue as a going concern through one year from the date that these financial statements are issued.
−Removed: Our ability to fund Company operations is dependent upon revenue related to vaccine sales for our products and product candidates, if such product candidates receive marketing approval and are successfully commercialized;
+Added: Our ability to fund Company operations is dependent upon revenue related to vaccine sales for our products and product candidates, if such product candidates receive marketing authorization and are successfully commercialized;
the resolution of certain matters, including whether, when, and how the dispute with Gavi is resolved;
−Removed: and management’s plans, which include resolving the dispute with Gavi and cost reductions associated with the restructuring of our global footprint.
+Added: and management’s plans, which include cost reductions associated with the restructuring of our global footprint.
Management’s plans may also include raising additional capital through a combination of equity and debt financing, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements.
In May 2023, we announced a global restructuring and cost reduction plan.
−Removed: This plan includes a more focused investment in our NVX-CoV2373 program, reduction to our pipeline spending, the continued rationalization of our manufacturing network, a reduction to our global workforce, as well as the consolidation of facilities and infrastructure.
+Added: This plan includes a more focused investment in our COVID-19 vaccine program, reduction to our pipeline spending, the continued rationalization of our manufacturing network, a reduction to our global workforce, as well as the consolidation of facilities and infrastructure.
New financings may not be available to us on commercially acceptable terms, or at all.
Also, any collaborations, strategic alliances, and marketing, distribution, or licensing arrangements may require us to give up some or all of our rights to a product or technology, which in some cases may be at less than the full potential value of such rights.
−Removed: In addition, the regulatory and commercial success of NVX-CoV2373 and our 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: In addition, the regulatory and commercial success of our COVID-19 vaccine and our other vaccine candidates, including an influenza vaccine candidate, CIC vaccine candidate, or a COVID-19 variant strain-containing monovalent formulation, remains uncertain.
If we are unable to obtain additional capital, we will assess our capital resources and may be required to delay, reduce the scope of, or eliminate some or all of our operations, or downsize our organization, any of which may have a material adverse effect on our business, financial condition, results of operations, and ability to operate as a going concern.
−Removed: Our announced global restructuring and cost reduction plan may not result in anticipated reductions in combined research and development and selling, general, and administrative expenses and may disrupt our business.
−Removed: In May 2023, we announced a global restructuring and cost reduction plan.
−Removed: This plan includes a more focused investment in our NVX-CoV2373 program, reduction to our pipeline spending, the continued rationalization of our manufacturing network, a reduction to our global workforce, as well as the consolidation of facilities and infrastructure.
−Removed: The planned workforce reduction includes an approximately 25% reduction in our global workforce, comprised of an approximately 20% reduction in full-time Novavax employees and the remainder comprised of contractors and consultants.
−Removed: We expect the full annual impact of the cost savings to be realized in 2024 and approximately half of the annual impact to be realized in 2023 due to timing of implementing the measures, and the applicable laws, regulations, and other factors in the jurisdictions in which we operate.
−Removed: We expect to record a charge of approximately $10 million to $15 million related to one-time employee severance and benefit costs, the majority of which is expected to be incurred in the second quarter of 2023 and are evaluating the anticipated costs related to the consolidation of facilities and infrastructure.
−Removed: We may not realize, in full or in part, the anticipated benefits, savings and improvements in our cost structure from these efforts due to unforeseen difficulties, delays or unexpected costs.
−Removed: If we are unable to realize the potential development progress and cost savings from the global restructuring and cost reduction plan, including the reduction to our global workforce, our business strategy, operating results and financial condition would be adversely affected.
−Removed: Our workforce reductions could yield unanticipated consequences, such as attrition beyond planned workforce reductions or disruptions in our day-to-day operations.
−Removed: Our global restructuring and cost reduction plan, including the reduction to our global workforce, could also harm our ability to attract and retain qualified management and development personnel who are critical to our business.
−Removed: If we are unable to realize the expected benefits from the restructuring and cost reduction plan, we may decide to undertake additional workforce reductions.
−Removed: If we are unable to attract or retain key management or other personnel, our business, operating results and financial condition could be materially adversely affected.
−Removed: We depend on our senior executive officers, as well as key scientific and other personnel.
−Removed: The loss of these individuals or our failure to implement an appropriate succession plan could harm our business and significantly delay or prevent the achievement of research, development or business objectives.
−Removed: Turnover in key executive positions resulting in lack of management continuity and long-term history with our Company could result in operational and administrative inefficiencies and added costs.
−Removed: These risks have increased since our global restructuring and cost reduction plan and related workforce reduction implemented in May 2023, which increased the risk that we will lose technical know-how or other trade secrets as experienced personnel depart.
−Removed: We may not be able to attract qualified individuals for key positions on terms acceptable to us.
−Removed: Competition for qualified employees is intense among pharmaceutical and biotechnology companies, and the loss of qualified employees, or an inability to attract, retain and motivate additional highly skilled employees could hinder our ability to complete clinical trials successfully and otherwise develop marketable products.
−Removed: We also rely from time to time on outside advisors who assist us in formulating our research and development and clinical strategy.
−Removed: We may not be able to attract and retain these individuals on acceptable terms, which could delay our development efforts.
−Removed: 3.1 Second Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 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: 3.2 Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 9, 2019 (File No.
−Removed: 3.3 Amended and Restated By-Laws of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 4, 2023 (File No.
−Removed: 3.4 Certificate of Designation of Series A Convertible Preferred Stock of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed June 19, 2020 (File No.
−Removed: 10.1*± Modification No.
−Removed: 17 to Undefinitized Project Agreement No.
−Removed: 1, dated February 6, 2023, between the Company and Advanced Technology International
−Removed: 10.2 Employment Agreement between the Company and John C.
−Removed: Jacobs, dated as of January 5, 2023 (Incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 28, 2023 (File No.
−Removed: 10.3 Consulting and Advisory Agreement between the Company and Stanley C.
−Removed: Erck, dated as of January 5, 2023 (Incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 28, 2023 (File No.
−Removed: 10.4* Consulting and Advisory Agreement between the Company and Dr.
−Removed: Glenn, dated as of March 20, 2023
−Removed: 10.5 Novavax, Inc.
−Removed: 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.
−Removed: 10.6 Form of Non-Statutory Stock Option Agreement under the Novavax, Inc.
−Removed: 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.
−Removed: 10.7 Form of Restricted Stock Unit Award Agreement under the Novavax, Inc.
−Removed: 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.
−Removed: 31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act
−Removed: 31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act
−Removed: 32.1* Certification of Chief Executive Officer pursuant to 18 U.S.C.
−Removed: Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
−Removed: 32.2* Certification of Chief Financial Officer pursuant to 18 U.S.C.
−Removed: Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
−Removed: 101 The following financial information from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in Inline Extensible Business Reporting Language (Inline XBRL):
−Removed: (i) the Consolidated Statements of Operations for the three-month periods ended March 31, 2023 and 2022, (ii) the Consolidated Statements of Comprehensive Income (Loss) for the three-month periods ended March 31, 2023 and 2022, (iii) the Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022, (iv) the Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three-month periods ended March 31, 2023 and 2022, (v) the Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2023 and 2022, and (vi) the Notes to Consolidated Financial Statements.
−Removed: 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
−Removed: ___________________________________
−Removed: * Filed or furnished herewith.
−Removed: ± Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
−Removed: Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
−Removed: NOVAVAX, INC.
−Removed: May 9, 2023 By:
−Removed: President and Chief Executive Officer
−Removed: (Principal Executive Officer)
−Removed: May 9, 2023 By:
−Removed: Executive Vice President, Chief Financial Officer and Treasurer
−Removed: (Principal Financial and Accounting Officer)
+Added: Risks Related to Regulatory and Compliance Matters
+Added: If we are unable to effectively pursue the manufacture, clinical testing, regulatory authorization, and export of our XBB COVID vaccine, or COVID vaccines against future strain changes, we may encounter delays or challenges in commercially distributing these vaccines as well as gaining market acceptance for them.
+Added: Regulatory authorities globally, including the U.S.
+Added: FDA, have recommended that manufacturers update their COVID vaccines with a monovalent XBB.1.5 strain for the fall 2023 COVID vaccine season and subsequent vaccination.
+Added: We continue to pursue the manufacture, clinical testing, regulatory authorization, and distribution of our XBB COVID vaccine, with a goal of making it commercially available for the fall 2023 COVID vaccine season.
+Added: We intend to submit applications for authorization of the XBB COVID vaccine to several regulatory authorities.
+Added: We expect that regulatory authorities will continue to monitor and assess SARS-CoV-2 evolution and recommend that manufacturers make corresponding updates to the composition of their COVID vaccines at least annually.
+Added: Inherent to this evolving approach to manufacturing new strains of COVID vaccines, including our development of our XBB COVID vaccine, we may encounter regulatory authorization, manufacturing, and distribution challenges, including export challenges.
+Added: In doing so, we expect to seek alignment and acceptance by regulatory authorities that would allow us to use manufacturing and analytical testing methods employed in earlier COVID vaccine production and commercialization efforts, that support an accurate characterization profile (including purity, potency, stability and like standards) of the relevant XBB COVID vaccine.
+Added: For the imminent fall 2023 COVID vaccine campaign, as well as subsequent campaigns in the future, our inability to overcome product development challenges and gaining regulatory authority alignment may adversely affect our ability to obtain licensure of our XBB COVID vaccine or future COVID vaccines at all, or in a timely manner.
+Added: Regarding future COVID vaccine development, including with our XBB COVID vaccine, we may fail to receive authorization by regulatory authorities if we are unable to generate sufficient batch analysis data to demonstrate batch-to-batch consistency at commercial scale, if the data generated from our incremental research and development program do not support continued effectiveness of the vaccine to protect individuals against the then-relevant variant of SARS-CoV-2 because the vaccine does not induce an adequate level of neutralization titers against such variant, or if the product otherwise exhibits an unacceptable safety profile, rendering the benefit/risk balance unfavorable.
+Added: Moreover, the new vaccine lots may not be accepted for distribution if required batch-release testing undertaken by officially designated laboratories does not show that such vaccine is of acceptable quality.
+Added: We were unable to accomplish the timely validation of the single-dose vial presentation we had intended to use with the XBB COVID vaccine in the U.S.
+Added: As a result, if we obtain EUA from the FDA for this vaccine, we expect to offer the product only in a five dose vial presentation for the fall 2023 vaccination season, which may adversely impact market acceptance, rate of product returns, or require higher price concessions in the U.S.
+Added: Because the finished product is manufactured by SIIPL in India, timely authorization is needed from the Drugs Controller General of India (“DCGI”), the drug licensing body in India, to export the XBB COVID vaccine to the respective markets where regulatory review of the product application is pending.If we are unable to receive this timely DCGI authorization, we may be unable to commercially distribute our XBB COVID vaccine in a timely manner for the fall 2023 season.
+Added: If we are unable to effectively manufacture our COVID vaccines in sufficient quantities, at sufficient yields, or are unable to obtain regulatory approvals for a manufacturing facility for our COVID vaccines, we may experience delays or an adverse impact on product development, clinical trials, regulatory approvals, and commercial distribution.
+Added: We are continuing to pursue the manufacture, distribution and clinical testing of our COVID vaccine (both our Protoype COVID vaccine and our XBB COVID vaccine) for commercialization.
+Added: Completion of our clinical trials and commercialization of our COVID vaccine and our other vaccine candidates requires access to, or development of, facilities to effectively manufacture our COVID vaccine and our other vaccine candidates at sufficient yields and at commercial scale.
+Added: We have limited experience manufacturing any of our vaccine candidates in the volumes necessary to support commercial sales.
+Added: While we have increased our global manufacturing capacity for our COVID vaccine, our efforts to establish and maintain manufacturing capabilities may not meet expectations as to timing, scale-up, reproducibility, yields, purity, cost, potency or quality.
+Added: We are highly dependent on third-party organizations to conduct a significant amount of our vaccine manufacturing activities.
+Added: We do not have sufficient internal manufacturing infrastructure to support global commercialization of our COVID vaccine and we have entered into third-party agreements for the components, as well as for commercial fill-finish manufacturing, for our COVID vaccine.
+Added: For the fall 2023 manufacturing campaign, the antigen component of our COVID vaccine is being manufactured at SIIPL in India, and the Matrix-M™ adjuvant component of our COVID vaccine is currently being manufactured at Novavax AB and AGC Biologics in Europe.
+Added: Challenges in manufacturing either the antigen component or the adjuvant, or issues in later manufacturing stages, could compromise production of our COVID vaccine.
+Added: Additionally, we currently depend exclusively on SIIPL and SLS for co-formulation, filling and finishing (other than in Europe) and PCI for finishing our COVID vaccine in Europe, and any delays or disruptions in these suppliers’ operations could prevent or delay the delivery of customer orders.
+Added: Additionally, to ensure adequate inventory supply and manage our operations, we forecast anticipated manufacturing requirements and customer demand to predict inventory needs and place orders with our third-party manufacturers based on such predictions.
+Added: Our ability to accurately forecast demand for our COVID vaccine could be negatively affected by many factors, including challenges in managing our commercial strategy, unanticipated changes in general market conditions or regulatory matters, and market demand for variant-specific COVID vaccines, among others.
+Added: If we underestimate our third-party manufacturing requirements, we may not be able to timely meet obligations under our customer supply agreements.
+Added: Conversely, if we overestimate our third-party manufacturing requirements, we may end up with inventory levels in excess of customer demand that result in a portion of our inventory becoming obsolete or expiring, as well as inventory write-downs or write-offs, or we may need to cancel previously forecasted batches of product from our third-party manufacturers, which may result in material cancellation fees.
+Added: In September 2022, for example, we entered into a Confidential Settlement Agreement and Release with FUJIFILM under which we are responsible for up to $185 million to FUJIFILM in connection with the termination of manufacturing activity.
+Added: In December 2022, we agreed to approximately $95 million in fees owed to AGC Biologics in connection with the cancellation of batches in 2022.
+Added: If we are unable to accurately forecast demand for our COVID vaccine and the required services from third-party manufacturers, our results of operations could be materially harmed.
+Added: Manufacturing our COVID vaccine involves a complicated process with which we have limited experience.
+Added: If we and our third-party manufacturers are unable to manufacture our COVID vaccine in clinical quantities or in commercial quantities and at sufficient yields and at required specifications, then clinical trials and commercialization will be delayed, and we will need to identify and reach supply arrangements with additional third parties.
+Added: Third-party manufacturers also must receive FDA or equivalent foreign regulatory body approval before they can produce clinical material or commercial product which could cause delays and alter our production schedule.
+Added: Our COVID vaccines are in competition with other products for access to these third-party facilities and may be subject to delays in manufacture if third parties prioritize other products.
+Added: We may not be able to enter into any necessary additional third-party manufacturing arrangements on acceptable terms, or on a timely basis.
+Added: In addition, we have to enter into technical transfer agreements and share our know-how with the third-party manufacturers, which can be time-consuming and may result in delays.
+Added: Because of contractual restraints and the limited number of third-party manufacturers with the expertise, required regulatory approvals and facilities to manufacture bulk vaccines at commercial-scale, replacement of a manufacturer may be expensive and time-consuming and may cause interruptions in the production of our vaccine and negatively impact our ability to timely meet obligations under our customer supply agreements.
+Added: We and our third-party manufacturers may also encounter production challenges related to:
+Added: • costs, scale up, and yields;
+Added: • shortages of raw materials and supplies;
+Added: • shipment delays or other supply chain disruptions
+Added: • quality control and assurance;
+Added: • contamination, lot consistency, potency, and purity;
+Added: • shortages of qualified personnel and other capacity constraints;
+Added: • compliance with strictly enforced and evolving federal, state and foreign regulations that vary in each country where products might be sold including nationalization or other territory restrictions placed on our owned and third-party manufacturing sites;
+Added: • and capital funding.
+Added: Delays or interruptions could have a material adverse effect on our business, financial condition, results of operations and cash flows.
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.