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Ahead of the May 23 settlement hearing, on April 11, 2024, Plaintiffs filed a motion seeking the Maryland Court’s final approval of the settlement.
+Added: At the May 23 settlement hearing, the Maryland Court granted final approval of the settlement.
+Added: The Maryland Court closed the Sinnathurai Action on May 24, 2024.
After the Sinnathurai Action was filed, eight derivative lawsuits were filed:
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On October 6, 2023, the Board of Directors of the Company formed a Special Litigation Committee (“SLC”) with full and exclusive power and authority of the Board to, among other things, investigate, review, and analyze the facts and circumstances surrounding the claims asserted in the pending derivative actions, including the claims that remain following the court’s order on the motion to dismiss in the Second Consolidated Derivative Action.
−Removed: On November 7, 2023, the court entered an order granting the parties’ request to stay the Second Consolidated Derivative Action for up to six months from the date of entry of the order, and, on April 15, 2024, the court entered a further order extending the stay by an additional month, and, on April 15, 2024, the court entered a further order extending the stay by an additional month.
−Removed: This includes staying the deadline for the individual defendants to respond to the consolidated amended complaint.
+Added: On November 7, 2023, the court entered an order granting the parties’ request to stay the Second Consolidated Derivative Action for up to six months from the date of entry of the order, and, on April 15, 2024, the court entered a further order extending the stay until June 6, 2024.
+Added: On June 7, 2024, the court entered another order extending the stay until August 5, 2024.
+Added: On August 5, 2024, the parties agreed to a further 90-day extension to November 4, 2024, which remains subject to court approval.
+Added: The existing and proposed stays include the deadline for the individual defendants to respond to the consolidated amended complaint.
The Kirst Action was filed on December 28, 2021, and the defendants immediately removed the case to the Maryland Court.
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On May 3, 2024, the plaintiffs filed a consolidated complaint.
−Removed: The parties are discussing whether to extend defendants' deadline to respond to the consolidated complaint through early June.
−Removed: 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 prototype vaccine from the Company as required by the Gavi APA.
−Removed: As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses.
−Removed: 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.
−Removed: Gavi also contended that, based on its purported termination of the Gavi APA, it was 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.
−Removed: Since December 31, 2022, the remaining Gavi Advance Payment Amount, which was $696.4 million as of December 31, 2023, pending resolution of the dispute with Gavi related to a return of the remaining Advance Payment Amount, has been classified within Other current liabilities in the Company’s consolidated balance sheet.
−Removed: On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above.
−Removed: The Company filed its Answer and Counterclaims on March 2, 2023.
−Removed: On April 5, 2023, Gavi filed its Reply to the Company’s Counterclaims.
−Removed: On February 16, 2024, the Company and Gavi entered into a Termination and Settlement Agreement (the “Gavi Settlement Agreement”) terminating the Gavi APA, settling the arbitration proceedings and releasing both parties of all claims arising from, under or otherwise in connection with the Gavi APA.
−Removed: Pursuant to the Gavi Settlement Agreement, the Company is responsible for payment to Gavi of (i) an initial settlement payment of $75 million, which the Company paid in February 2024, and (ii) deferred payments, in equal annual amounts of $80 million payable each calendar year through a deferred payment term ending December 31, 2028.
−Removed: The deferred payments are due in variable quarterly installments beginning in the second quarter of 2024 and total $400 million during the deferred payment term.
−Removed: Such deferred payments may be reduced through Gavi’s use of an annual vaccine credit equivalent to the unpaid balance of such deferred payments each year, which may be applied to qualifying sales of any of the Company’s vaccines funded by Gavi for supply to certain low-income and lower-middle income countries.
−Removed: The Company has the right to price the vaccines offered to such low-income and lower-middle income countries at its discretion, and, when utilized by Gavi, the Company will credit the actual price per vaccine paid against the applicable credit.
−Removed: The Company intends to price vaccines offered via the tender process, consistent with its shared goal with Gavi to provide equitable access to those countries.
−Removed: Also, pursuant to the Gavi Settlement Agreement, we granted Gavi an additional credit of up to $225 million that may be applied against qualifying sales of any of the Company’s vaccines for supply to such low-income and lower-middle income countries that exceed the $80 million deferred payment amount in any calendar year during the deferred payment term.
−Removed: In total, the Gavi settlement agreement is comprised of $700 million of potential consideration, consisting of the $75 million initial settlement payment, deferred payments of up to $400 million that may be reduced through annual vaccine credits, and the additional credit of up to $225 million that may be applied for certain qualifying sales.
−Removed: In addition, we and Gavi entered into a security agreement pursuant to which Novavax granted Gavi a security interest in accounts receivable from SIIPL under the SIIPL R21 Agreement (see Note 4 to our consolidated financial statements), which will continue for the deferred payment term of the Gavi Settlement Agreement.
−Removed: On February 22, 2024, the claims and counterclaims were dismissed with prejudice.
−Removed: On September 30, 2022, the Company, FUJIFILM Diosynth Biotechnologies UK Limited (“FDBK”), FUJIFILM Diosynth Biotechnologies Texas, LLC (“FDBT”), and FUJIFILM Diosynth Biotechnologies USA, Inc.
−Removed: (“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 “CSA”) dated August 20, 2021 and Master Services Agreement dated June 30, 2020 and associated statements of work (the “MSA”) by and between the Company and Fujifilm.
−Removed: The MSA and CSA established the general terms and conditions applicable to Fujifilm’s manufacturing and supply activities related to the Company’s prototype vaccine under the associated statements of work.
−Removed: Pursuant to the Fujifilm Settlement Agreement, the Company agreed to pay up to $185.0 million (the “Settlement Payment”) to Fujifilm in connection with cancellation of manufacturing activity at FDBT.
−Removed: Under the Fujifilm Settlement Agreement, the final two quarterly installments due to Fujifilm were subject to Fujifilm’s obligation to use commercially reasonable efforts to mitigate losses associated with the vacant manufacturing capacity caused by the termination of manufacturing activities at FDBT under the CSA.
−Removed: Any replacement revenue achieved by Fujifilm’s mitigation efforts between July 1, 2023 and December 31, 2023 would offset the final two settlement payments owed by the Company.
−Removed: On October 2, 2023, the Company sent a notice of breach under the Fujifilm Settlement Agreement to Fujifilm setting forth the Company’s position that Fujifilm had not used commercially reasonable efforts to mitigate losses.
−Removed: The Company withheld the $34.3 million installment payment due to Fujifilm on September 30, 2023, pending resolution of the issues identified in the notice of breach.
−Removed: On October 30, 2023, FDBT filed a demand for arbitration with Judicial Arbitration and Mediation Services seeking payment of the third quarter installment of the Settlement Payment.
−Removed: On March 21, 2024, the Company and Fujifilm entered into a Confidential Settlement Agreement and Release (“Second Fujifilm Settlement Agreement”) to resolve the disputes in the pending arbitration.
−Removed: Pursuant to the Second Fujifilm Settlement Agreement, the Company paid $42.0 million to Fujifilm in March 2024 in exchange for a full release of claims and dismissal of the arbitration.
+Added: On May 14, 2024, the parties filed a stipulation staying the action until June 6, 2024.
+Added: On July 12, 2024, the court entered an order staying the action until August 5, 2024.
We are also involved in various other legal proceedings arising in the normal course of business.
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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.