What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-08 · 222 added, 230 removed, 530 unchanged (46% of the section changed)

4 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

7 unchanged sentences

Total expenses 218,530 312,618 711,702 1,075,306

Income (loss) from operations

Loss from operations

( 134,018 ) ( 125,632 ) ( 117,851 ) ( 382,943 )

1 unchanged sentence

Interest expense ( 4,236 ) ( 2,859 ) ( 12,490 ) ( 10,299 )

Other income, net

Other income (expense), net

15,922 ( 2,982 ) 27,307 26,912

Income (loss) before income tax expense (benefit)

Loss before income tax expense (benefit)

( 122,332 ) ( 131,473 ) ( 103,034 ) ( 366,330 )

Income tax expense (benefit) ( 1,032 ) ( 697 ) 3,435 343

Net income (loss) $ 162,381 $ 58,008 $ 14,831 $ ( 235,897 )

Net income (loss) per share:

Basic $ 1.09 $ 0.65 $ 0.10 $ ( 2.69 )

Diluted $ 0.99 $ 0.58 $ 0.10 $ ( 2.69 )

$ ( 121,300 ) $ ( 130,776 ) $ ( 106,469 ) $ ( 366,673 )

Net loss per share:

Basic and diluted $ ( 0.76 ) $ ( 1.26 ) $ ( 0.71 ) $ ( 3.94 )

Weighted average number of common shares outstanding:

Basic 148,379 89,362 144,147 87,769

Diluted 165,855 104,065 145,121 87,769

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Basic and diluted 160,049 103,429 149,486 93,046

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

Net income (loss) $ 162,381 $ 58,008 $ 14,831 $ ( 235,897 )

Other comprehensive income (loss):

Net unrealized loss on available-for-sale marketable securities

$ ( 121,300 ) $ ( 130,776 ) $ ( 106,469 ) $ ( 366,673 )

Other comprehensive income (loss):

Net unrealized gain on available-for-sale marketable securities

Foreign currency translation adjustment 13,713 ( 3,686 ) 633 ( 5,486 )

1 unchanged sentence

14,106 ( 3,686 ) 876 ( 5,486 )

Comprehensive income (loss) $ 162,698 $ 52,997 $ 1,601 $ ( 237,697 )

Comprehensive loss

$ ( 107,194 ) $ ( 134,462 ) $ ( 105,593 ) $ ( 372,159 )

The accompanying notes are an integral part of these financial statements.

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(in thousands, except share and per share information)

September 30,

2024 December 31,

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Commitments and contingencies (Note 14)

Preferred stock, $ 0.01 par value, 2,000,000 shares authorized at June 30, 2024 and December 31, 2023;

no shares issued and outstanding at June 30, 2024 and December 31, 2023

Preferred stock, $ 0.01 par value, 2,000,000 shares authorized at September 30, 2024 and December 31, 2023;

no shares issued and outstanding at September 30, 2024 and December 31, 2023

Stockholders' deficit:

Common stock, $ 0.01 par value, 600,000,000 shares authorized at June 30, 2024 and December 31, 2023;

161,267,120 shares issued and 159,891,014 shares outstanding at June 30, 2024 and 140,506,093 shares issued and 139,505,770 shares outstanding at December 31, 2023

Common stock, $ 0.01 par value, 600,000,000 shares authorized at September 30, 2024 and December 31, 2023;

161,558,247 shares issued and 160,148,088 shares outstanding at September 30, 2024 and 140,506,093 shares issued and 139,505,770 shares outstanding at December 31, 2023

Additional paid-in capital 4,490,630 4,192,164

Accumulated deficit ( 4,927,420 ) ( 4,820,951 )

Treasury stock, cost basis, 1,376,106 shares at June 30, 2024 and 1,000,323 shares at December 31, 2023

( 94,439 ) ( 92,267 )

Accumulated other comprehensive income (loss)

Treasury stock, cost basis, 1,410,159 shares at September 30, 2024 and 1,000,323 shares at December 31, 2023

( 94,860 ) ( 92,267 )

Accumulated other comprehensive income

Total stockholders’ deficit ( 526,436 ) ( 716,927 )

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

Three and Six Months Ended June 30, 2024 and 2023

Three and Nine Months Ended September 30, 2024 and 2023

(in thousands, except share information)

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Comprehensive

Loss Total Stockholders'

Income (Loss)

Total Stockholders'

Shares Amount

Balance at March 31, 2024 141,700,972 $ 1,417 $ 4,204,775 $ ( 4,968,501 ) $ ( 93,950 ) $ ( 10,825 ) $ ( 867,084 )

Balance at June 30, 2024 161,267,120 $ 1,613 $ 4,477,748 $ ( 4,806,120 ) $ ( 94,439 ) $ ( 10,508 ) $ ( 431,706 )

Stock-based compensation — — 12,049 — — — 12,049

Stock issued under incentive programs 291,127 3 833 — ( 421 ) — 415

Issuance of common stock, net of issuance cost s of $ 3,830

Unrealized gain on available-for-sale marketable securities

— — — — — 393 393

Unrealized loss on available-for-sale marketable securities — — — — — ( 150 ) ( 150 )

Foreign currency translation adjustment — — — — 13,713 13,713

Net income — — — 162,381 — — 162,381

— — — ( 121,300 ) — — ( 121,300 )

Balance at September 30, 2024 161,558,247 $ 1,616 $ 4,490,630 $ ( 4,927,420 ) $ ( 94,860 ) $ 3,598 $ ( 526,436 )

Balance at June 30, 2023 95,183,750 $ 952 $ 3,855,916 $ ( 4,511,786 ) $ ( 91,424 ) $ ( 8,177 ) $ ( 754,519 )

Balance at March 31, 2023 87,139,831 $ 871 $ 3,767,733 $ ( 4,569,794 ) $ ( 91,226 ) $ ( 3,166 ) $ ( 895,582 )

Stock-based compensation — — 21,254 — — — 21,254

3 unchanged sentences

Foreign currency translation adjustment — — — — — ( 3,686 ) ( 3,686 )

Net income — — — 58,008 — — 58,008

Balance at June 30, 2023 95,183,750 $ 952 $ 3,855,916 $ ( 4,511,786 ) $ ( 91,424 ) $ ( 8,177 ) $ ( 754,519 )

— — — ( 130,776 ) — — ( 130,776 )

Balance at September 30, 2023 119,641,667 $ 1,196 $ 4,066,585 $ ( 4,642,562 ) $ ( 91,706 ) $ ( 11,863 ) $ ( 678,350 )

Common Stock Additional

10 unchanged sentences

19,093,397 191 256,218 — — — 256,409

Unrealized loss on available-for-sale marketable securities — — — — — ( 150 ) ( 150 )

Unrealized gain on available-for-sale marketable securities

— — — — — 243 243

Foreign currency translation adjustment — — — — — 633 633

— — — ( 106,469 ) — — ( 106,469 )

Balance at June 30, 2024 161,267,120 $ 1,613 $ 4,477,748 $ ( 4,806,120 ) $ ( 94,439 ) $ ( 10,508 ) $ ( 431,706 )

Balance at September 30, 2024 161,558,247 $ 1,616 $ 4,490,630 $ ( 4,927,420 ) $ ( 94,860 ) $ 3,598 $ ( 526,436 )

Balance at December 31, 2022 86,806,554 $ 868 $ 3,737,979 $ ( 4,275,889 ) $ ( 90,659 ) $ ( 6,377 ) $ ( 634,078 )

5 unchanged sentences

Net loss — — — ( 366,673 ) — — ( 366,673 )

Balance at June 30, 2023 95,183,750 $ 952 $ 3,855,916 $ ( 4,511,786 ) $ ( 91,424 ) $ ( 8,177 ) $ ( 754,519 )

Balance at September 30, 2023 119,641,667 $ 1,196 $ 4,066,585 $ ( 4,642,562 ) $ ( 91,706 ) $ ( 11,863 ) $ ( 678,350 )

The accompanying notes are an integral part of these financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Six Months Ended June 30,

(in thousands)(unaudited)

Nine Months Ended September 30,

Operating Activities:

Net income (loss) $ 14,831 $ ( 235,897 )

$ ( 106,469 ) $ ( 366,673 )

Reconciliation of net loss to net cash used in operating activities:

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( 441,265 ) —

Proceeds from maturities of available-for-sale marketable securities

Internal-use software ( 1,262 ) ( 4,796 )

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Supplemental disclosure of non-cash activities:

Sale of common stock under the Sales Agreement not settled at quarter-end $ — $ 5,986

Right-of-use asset leases, net of tenant improvement allowance on facility leases

1 unchanged sentence

Capital expenditures included in accounts payable and accrued expenses $ 1,607 $ 2,394

Internal-use software included in accounts payable and accrued expenses

Supplemental disclosure of cash flow information:

1 unchanged sentence

Cash paid for income taxes, net of refunds

$ ( 649 ) $ 128

The accompanying notes are an integral part of these financial statements.

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024

September 30, 2024

Note 1 – Organization and Business

Novavax, Inc.

(“Novavax,” and together with its wholly owned subsidiaries, the “Company”) is a global company that is advancing protein-based vaccines with its Matrix-M TM adjuvant.

Novavax offers a differentiated vaccine platform that combines a recombinant protein approach, innovative nanoparticle technology, and patented Matrix-M™ adjuvant to enhance the immune response.

In May 2024, Novavax entered into a collaboration and licensing agreement (the “Collaboration and License Agreement” or “ Sanofi CLA”) with Sanofi Pasteur Inc.

(“Sanofi”) to co-commercialize Novavax’s current standalone COVID-19 vaccines (“COVID-19 Vaccine”), including Novavax’s Nuvaxovid TM , prototype COVID-19 vaccine (“NVX-CoV2373,” or “prototype vaccine”) and XBB COVID-19 vaccine (“NVX-CoV2601”), and the Company’s updated vaccine for the 2024-2025 vaccination season (“NVX-CoV2705,” or “updated vaccine” and, collectively with NVX-CoV2373 and NVX-CoV2601, the Company’s “COVID-19 Vaccine” or “COVID-19 Program”).

This agreement is discussed in greater detail in Note 6 of Novavax’s consolidated financial statements.

The partnership with Sanofi allows Novavax to broaden access to its vaccine and adjuvant and refocus on clinical-stage research and development and pipeline expansion beginning in 2025.

Through the end of the 2024-2025 vaccination season, Novavax will continue commercialization of its COVID-19 Vaccine.

Local regulatory authorities have also specified nomenclature for the labeling of NVX-CoV2373 and NVX-CoV2601 within their territories (e.g., “Novavax COVID-19 Vaccine, Adjuvanted”, “Novavax COVID-19, Adjuvanted (2023-2024 Formula),” respectively, for the U.S., and “Nuvaxovid™” for ex-US territories) collectively referred to as the Company’s “COVID-19 Program,” or “COVID-19 Vaccine”).

In 2024, the Company has submitted an amendment to the previously granted October 2023 Emergency Use Authorization (“EUA”) to the U.S.

Food and Drug Administration (“U.S.

FDA”), filed for a type II variation of the existing Marketing Authorization (“MA”) with the European Medicines Agency (“EMA”) and the United Kingdom's (“U.K.”) Medicines and Healthcare products Regulatory Agency (“MHRA”), and filed for authorization with Health Canada for the Company’s updated vaccine.

(“Novavax,” and together with its wholly owned subsidiaries, the “Company”) is a global company focused on driving value via its proven technology platform, which includes a combination of a recombinant protein approach, innovative nanoparticle technology, and patented Matrix-M™ adjuvant, through partnerships and research and development.

The Company continues to evolve its operating model to leverage four key drivers of value:

a partnership with Sanofi Pasteur Inc.

(“Sanofi”) announced in May 2024, a late-stage pipeline focuses on its COVID-19-Influenza Combination (“CIC”) and stand-alone influenza vaccine candidates, leveraging its proven technology platform to drive additional partnerships and deals, and its emerging early-stage pipeline.

In May 2024, Novavax entered into a collaboration and licensing agreement (the “Sanofi CLA”) with Sanofi.

The agreement includes a co-exclusive license to co-commercialize Novavax’s COVID-19 vaccine following the end of the 2024-2025 vaccination season, a sole license to Novavax’s COVID-19 vaccine for use in combination with Sanofi’s influenza vaccines, a non-exclusive license to develop and commercialize other vaccine products selected by Sanofi that include the Company's Matrix-M TM adjuvant in vaccine products (See Note 6).

Novavax’s program includes the Company’s prototype COVID-19 vaccine (“NVX-CoV2373,” or “prototype vaccine”), the Company’s XBB COVID-19 vaccine (“NVX-CoV2601”), and the Company’s updated vaccine for the 2024-2025 vaccination season (“NVX-CoV2705” or “updated vaccine” and, collectively with NVX-CoV2373 and NVX-CoV2601, the Company’s “COVID-19 Vaccine” or “COVID-19 Program”).

Currently, the Company significantly depends on its supply agreement with Serum Institute of India Pvt.

(“SII”) and its subsidiary, Serum Life Sciences Limited (“SLS” and together with SII, “Serum”), for co-formulation, filling, and finishing (other than in Europe) and on its service agreement with PCI Pharma Services for finishing in Europe.

Novavax is advancing development of other vaccine candidates, including its COVID-19-Influenza Combination (“CIC”) and stand-alone influenza vaccine candidates.

In addition, Novavax’s adjuvant is included in the University of Oxford and SII’s R21/Matrix-M TM malaria vaccine which has received authorizations in a number of countries with doses administered in 2024.

Novavax’s COVID-19 Vaccine and its other vaccine candidates incorporate the Company’s proprietary Matrix-M™ adjuvant to enhance the immune response and stimulate higher levels of functional antibodies and induce a cellular immune response.

(“SII”) and its subsidiary, Serum Life Sciences Limited (“SLS” and together with SII, “Serum”), for co-formulation, filling, and finishing.

Note 2 – Summary of Significant Accounting Policies

2 unchanged sentences

GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.

The consolidated financial statements are unaudited but include all adjustments (consisting of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position, operating results, comprehensive income (loss), changes in stockholders’ deficit, and cash flows for the periods presented.

The accompanying unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position, operating results, comprehensive loss, changes in stockholders’ deficit, and cash flows for the periods presented.

Although the Company believes that the disclosures in these unaudited consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in consolidated financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted as permitted under the rules and regulations of the United States Securities and Exchange Commission (“SEC”).

The unaudited consolidated financial statements include the accounts of Novavax, Inc.

The accompanying unaudited consolidated financial statements include the accounts of Novavax, Inc.

and its wholly owned subsidiaries.

All intercompany accounts and transactions have been eliminated in consolidation.

The aggregate foreign currency transaction gains and losses resulting from the conversion of the transaction currency to functional currency were a $ 1.6 million loss and a $ 6.7 million loss, and a $ 0.2 million loss and $ 16.1 million gain for the three and six months ended June 30, 2024 and 2023, respectively, which are reflected in Other income (expense).

The aggregate foreign currency transaction gains and losses resulting from the conversion of the transaction currency to functional currency were a $ 1.2 million loss and a $ 7.9 million loss, and a $ 12.2 million loss and $ 3.9 million gain for the three and nine months ended September 30, 2024 and 2023, respectively, which are reflected in Other income (expense), net.

The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

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Liquidity and Going Concern

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 and contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainty described below.

In May 2024, the Company entered into the Sanofi CLA and a securities subscription agreement (the “Subscription Agreement”) with Sanofi as a result of which, the Company received a total of $ 568.8 million during the second quarter of 2024 (See Note 6).

As of June 30, 2024, the Company had $ 680.2 million in cash and cash equivalents, $ 369.4 million in marketable securities, and working capital of $ 45.6 million.

During the six months ended June 30, 2024, the Company recognized net income of $ 14.8 million, and had net cash flows provided by operating activities of $ 230.7 million.

In accordance with Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements - Going Concern , the Company evaluated its ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.

Based on the Company’s current cash and cash equivalents and marketable securities balances and its current cash flow forecast for the one-year going concern look forward period, the Company has concluded that it will have sufficient capital available to fund its operations for the one-year period from the date that these financial statements are issued.

The accompanying unaudited 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 and contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.

The accompanying unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainty described below.

As of September 30, 2024, the Company had $ 573.6 million in cash and cash equivalents, $ 335.9 million in marketable securities, and negative working capital of $ 77.3 million.

During the nine months ended September 30, 2024, the Company recognized net loss of $ 106.5 million, and had net cash flows provided by operating activities of $ 85.9 million.

In accordance with Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements - Going Concern, the Company evaluated its ability to continue as a going concern within one year after the date that the accompanying unaudited consolidated financial statements are issued.

Based on the Company’s current cash, cash equivalents and marketable securities balances and the Company's current cash flow forecast for the one-year going concern look forward period, the Company has concluded that it expects to have sufficient capital available to fund its operations for the one-year period from the date that these financial statements are issued.

As of December 31, 2023, the Company had concluded that there was substantial doubt about its ability to continue as a going concern primarily due to significant uncertainty related to its ability to successfully develop, manufacture, distribute, and market its updated vaccine and execute on certain cost-reduction initiatives as described in Note 15.

The Sanofi CLA has alleviated the substantial doubt.

The Sanofi CLA combined with cost reductions and the settlement of certain liabilities, has alleviated the substantial doubt.

Revenue Recognition, Licensing and Transition Services

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Total consideration may include nonrefundable upfront license fees, transition service fees, other payments based upon the achievement of specified milestones, and royalty payments based on product sales from licensed products.

For multiple performance obligation arrangements, the Company allocates the transaction price to each distinct performance obligation based on its relative standalone selling price.

The standalone selling price is generally determined for each performance obligation based on the prices charged to customers, discounted cash flows, or using expected cost-plus margin.

For standalone selling prices determined using discounted cash flows, the Company considers discounted, probability-weighted cash flows related to the performance obligation transferred.

For multiple performance obligation arrangements, the Company allocates the transaction price to each distinct performance obligation based on its relative stand-alone selling price.

The stand-alone selling price is generally determined for each performance obligation based on the prices charged to customers, discounted cash flows, or using expected cost-plus margin.

For stand-alone selling prices determined using discounted cash flows, the Company considers discounted, probability-weighted cash flows related to the performance obligation transferred.

In developing such estimates, the Company applies judgment in determining the forecasted revenue, expected margins, and the discount rate.

8 unchanged sentences

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S.

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.

The preparation of the accompanying unaudited consolidated financial statements in conformity with U.S.

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 accompanying unaudited consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Actual results could differ materially from those estimates.

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In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements (“ASU 2023-06”), to clarify or improve disclosure and presentation requirements of a variety of topics and align the requirements in the FASB ASC with the SEC's regulations.

The ASU is effective for the Company’s annual period ended December 31, 2024 and interim periods thereafter.

The Company is currently evaluating ASU 2023-06 to determine its impact on the Company’s consolidated financial statements and disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”) which expands disclosures for reportable segments made by public entities and requires more detailed information about expenses within each reportable segment.

Entities with a single reportable segment are required to provide on both an interim and annual basis, all segment disclosures required in ASC 280, including the new disclosures for reportable segments under the amendments in ASU 2023-07.

The amendments do not change the existing guidance on how a public entity identifies and determines its reportable segments.

The ASU is effective for the Company’s annual period ended December 31, 2024 and interim periods thereafter.

The Company is currently evaluating ASU 2023-07 to determine its impact on the Company's disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”).

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Note 3 – Marketable Securities

Marketable securities were classified as available-for-sale as of June 30, 2024 and comprised of (in thousands):

June 30, 2024 December 31, 2023

Marketable securities were classified as available-for-sale as of September 30, 2024 and comprised of (in thousands):

September 30, 2024 December 31, 2023

Losses Fair Value Amortized

2 unchanged sentences

Total marketable securities $ 335,658 $ 243 $ — $ 335,901 $ — $ — $ — $ —

As of June 30, 2024, investments in marketable securities, comprising corporate debt securities, were due to mature within one year.

Based on the Company’s policy under the expected credit loss model, including an assessment of unrealized losses on the portfolio as of June 30, 2024, the Company concluded that the unrealized losses for its marketable securities were not attributable to credit and therefore an allowance for credit losses for these securities has not been recorded as of June 30, 2024.

Also, based on the scheduled maturities of the investments, the Company was more-likely-than-not to hold these investments for a period of time sufficient for a recovery of the Company’s cost basis.

As of June 30, 2024, the Company held no securities that were in an unrealized loss position for more than 12 months.

As of September 30, 2024, investments in marketable securities, comprised of corporate debt securities, were due to mature within one year.

Based on the Company’s policy under the expected credit loss model, including an assessment of the investment portfolio as of September 30, 2024, the Company concluded that its marketable securities were not attributable to credit and therefore an allowance for credit losses has not been recorded as of September 30, 2024.

As of September 30, 2024, the Company held no securities that were in an unrealized loss position for more than 12 months.

Note 4– Fair Value Measurements

The following table represents the Company’s fair value hierarchy for its financial assets and liabilities (in thousands):

Fair Value at June 30, 2024 Fair Value at December 31, 2023

Fair Value at September 30, 2024 Fair Value at December 31, 2023

Assets Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

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$ — $ 221,733 $ — $ — $ 100,909 $ —

(1) Classified as cash and cash equivalents as of June 30, 2024 and December 31, 2023, respectively, on the consolidated balance sheets.

(2) Includes $ 232.0 million classified as Cash and cash equivalents and $ 369.4 million classified as marketable securities as of June 30, 2024, on the consolidated balance sheets.

(1) Classified as cash and cash equivalents as of September 30, 2024 and December 31, 2023, respectively, on the consolidated balance sheets.

(2) Includes $ 124.2 million classified as Cash and cash equivalents and $ 335.9 million classified as marketable securities as of September 30, 2024, on the consolidated balance sheets.

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.

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 six months ended June 30, 2024 and 2023, the Company did not have any transfers between levels.

During the nine months ended September 30, 2024 and 2023, 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.

Note 5 – Revenue

The Company's accounts receivable included $ 29.8 million and $ 286.4 million related to amounts that were billed to customers and $ 2.3 million and $ 10.8 million related to amounts which had not yet been billed to customers as of June 30, 2024 and December 31, 2023, respectively.

During the six months ended June 30, 2024 and 2023, changes in the Company’s accounts receivables, allowance for credit losses, and deferred revenue balances were as follows (in thousands):

The Company's accounts receivable included $ 88.8 million and $ 286.4 million related to amounts that were billed to customers and $ 6.2 million and $ 10.8 million related to amounts which had not yet been billed to customers as of September 30, 2024 and December 31, 2023, respectively.

During the nine months ended September 30, 2024 and 2023, changes in the Company’s accounts receivables, allowance for credit losses, and deferred revenue balances were as follows (in thousands):

Balance, Beginning of Period Additions Deductions Balance, End of Period

Accounts receivable:

Six Months Ended June 30, 2024 $ 304,916 $ 672,326 $ ( 937,462 ) $ 39,780

Six Months Ended June 30, 2023 96,210 793,039 ( 486,684 ) 402,565

Nine Months Ended September 30, 2024 $ 304,916 $ 882,979 $ ( 1,085,258 ) $ 102,637

Nine Months Ended September 30, 2023 96,210 981,305 ( 946,182 ) 131,333

Allowance for credit losses (1) :

Six Months Ended June 30, 2024 $ ( 7,675 ) $ — $ — $ ( 7,675 )

Six Months Ended June 30, 2023 ( 13,835 ) — 6,160 ( 7,675 )

Nine Months Ended September 30, 2024 $ ( 7,675 ) $ — $ — $ ( 7,675 )

Nine Months Ended September 30, 2023 ( 13,835 ) — 6,160 ( 7,675 )

Deferred revenue:

Six Months Ended June 30, 2024 $ 863,520 $ 365,150 $ ( 28,849 ) $ 1,199,821

Six Months Ended June 30, 2023 549,551 414,816 ( 56,957 ) 907,410

(1) There was no allowance for credit losses recorded during the six months ended June 30, 2024 or 2023.

During the six months ended June 30, 2023, there was a $ 6.2 million reversal of a credit loss allowance due to the collection of a previously recognized allowance for credit losses.

Nine Months Ended September 30, 2024 $ 863,520 $ 363,758 $ ( 98,490 ) $ 1,128,788

Nine Months Ended September 30, 2023 549,551 422,766 ( 171,288 ) 801,029

(1) There was no allowance for credit losses recorded during the nine months ended September 30, 2024 or 2023.

During the nine months ended September 30, 2023, there was a $ 6.2 million reversal of a credit loss allowance due to the collection of a previously recognized allowance for credit losses.

To estimate the allowance for credit losses, the Company evaluates the credit risk related to its customers based on historical loss experience, economic conditions, the aging of receivables, and customer-specific risks.

(2) Deductions from Deferred revenue generally related to the recognition of revenue once performance obligations on a contract with a customer are met.

During the six months ended June 30, 2024, deductions included a $ 2.2 million reclassification of refundable upfront payments previously included in Deferred revenue to Other current liabilities.

During the six months ended June 30, 2024, additions included a $ 225.0 million reclassification of refundable upfront payment from Other current liabilities to Deferred revenue related to the settlement with Gavi as discussed below.

There were no such reclassifications during the six months ended June 30, 2023.

As of June 30, 2024, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties and constrained variable consideration, was approximately $ 2 billion, of which $ 1.2 billion was included in Deferred revenue.

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 and other payments or result in reduced future payments, which could adversely impact the Company’s ability to realize revenue from its unsatisfied performance obligations.

During the nine months ended September 30, 2024, deductions included a $ 33.5 million reclassification of refundable upfront payments previously included in Deferred revenue to Other current liabilities.

During the nine months ended September 30, 2024, additions included a $ 225.0 million reclassification of an upfront payment from Other current liabilities to Deferred revenue related to the settlement with Gavi as discussed below.

During the nine months ended September 30, 2023, deductions included a $ 112.5 million reclassification of refundable upfront payments previously included in Deferred revenue to Other current liabilities.

As of September 30, 2024, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties and constrained variable consideration, was $ 1.3 billion, of which $ 1.1 billion was included in Deferred revenue.

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 advance purchase agreements (“APAs”) may require the Company to refund portions of upfront and other payments or result in reduced future payments, which could adversely impact the Company’s ability to realize revenue from its unsatisfied performance obligations.

The timing to fulfill performance obligations related to APAs will depend on the 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 the Company’s updated vaccine under certain of the Company’s APAs.

The timing to fulfill performance obligations related to the Sanofi CLA will depend on the timing of delivery of Sanofi Transition Services and Sanofi Technology Transfer services and delivery of doses and other materials based on Sanofi demand.

Under an APA with Gavi, the Vaccine Alliance (“Gavi”), entered into in May 2021 (the “Gavi APA”), the Company received upfront payments of $ 700 million from Gavi (the “Advance Payment Amount”) to be applied against purchases of the Company’s prototype vaccine by certain countries participating in the COVAX Facility.

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In February 2024, the Company entered into a Termination and Settlement Agreement with Gavi (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.

On February 22, 2024, the claims and counterclaims were dismissed with prejudice.

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.

In February 2024, the claims and counterclaims were dismissed with prejudice.

deferred payment term ending December 31, 2028.

The deferred payments are due in variable quarterly installments and total $ 400 million during the deferred payment term.

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The Company has the right to price the vaccines offered to such low-income and lower-middle income countries in its discretion, and, when utilized by Gavi, the Company will credit the actual price per vaccine paid against the applicable credit.

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.

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.

Also, pursuant to the Gavi Settlement Agreement, the Company 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.

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.

The Company recorded the $ 3.6 million difference between the refund liability recorded as of December 31, 2023 of $ 696.4 million and the $ 700 million of total consideration under the arrangement as a reduction to revenue during the six months ended June 30, 2024.

As of June 30, 2024, the remaining amounts included on the Company’s consolidated balance sheet were $ 225 million in non-current Deferred revenue for the additional credit that may be applied against future qualifying sales, $ 90 million in Other current liabilities, and $ 305 million in Other non-current liabilities.

As of September 30, 2024, the remaining amounts included on the Company’s consolidated balance sheet were $ 225 million in non-current Deferred revenue for the additional credit that may be applied against future qualifying sales, $ 95.0 million in Other current liabilities, and $ 290.0 million in Other non-current liabilities.

In addition, the Company and Gavi entered into a security agreement pursuant to which Novavax granted Gavi a security interest in accounts receivable from SII under the SII R21 Agreement (see Note 6), which will continue for the deferred payment term of the Gavi Settlement Agreement.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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are recorded net of gross-to-net deductions.

During the six months ended June 30, 2024, product sales in North America includes $ 4.8 million of gross-to-net deductions in excess of the WAC, primarily due to wholesale distributor fees for shipments expected to be returned and adjustments made to estimated returns of prior period product sales, partially offset by updates to estimated product returns.

During the six months ended June 30, 2024, product sales for the rest of the world includes a $ 3.6 million reduction to revenue recognized pursuant to the Gavi Settlement Agreement as discussed above.

As of June 30, 2024, changes in the Company’s gross-to-net deductions balances were as follows (in thousands):

As of September 30, 2024, changes in the Company’s gross-to-net deductions balances were as follows (in thousands):

Wholesale Distributor Fees, Discounts, and Chargebacks

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( 56,583 ) ( 86,937 ) ( 143,520 )

Balance as of June 30, 2024

Balance as of September 30, 2024

$ 24,581 $ 78,272 $ 102,853

(1) Amounts charged against product sales include $ 4.0 million of adjustments made to prior period product sales due primarily to changes in the estimate of product returns.

As of June 30, 2024 no gross-to-net deductions were included in Accounts receivable.

As of December 31, 2023, $ 2.6 million of gross-to-net deductions were included in Accounts receivable.

As of June 30, 2024 and December 31, 2023, $ 55.5 million and $ 103.1 million of gross-to-net deductions were included in Accrued expenses, respectively.

The Company has an APA with the Commonwealth of Australia (“Australia”) for the purchase of doses of COVID-19

Vaccine (the “Australia APA”).

(1) Amounts charged against product sales include $ 4.2 million of net adjustments made to prior period product sales, due primarily to $ 8.1 million of previously estimated product returns, which are no longer eligible for customer credits and therefore were recognized in product revenue during the nine months ended September 30, 2024, offset by increases to other gross-to-net deductions.

As of September 30, 2024 and December 31, 2023, $ 3.4 million and $ 2.6 million of gross-to-net deductions were

included in Accounts receivable, respectively.

As of September 30, 2024 and December 31, 2023, $ 99.5 million and $ 103.1 million of gross-to-net deductions were included in Accrued expenses, respectively.

The Company has an APA with the Commonwealth of Australia (“Australia”) for the purchase of doses of COVID-19 Vaccine (the “Australia APA”).

In March 2024, the Company and Australia agreed to cancel the COVID-19 Vaccine doses previously scheduled for delivery in the fourth quarter of 2023.

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The Company plans to seek an amendment to the Australia APA which may not be achievable on acceptable terms or at all.

As of June 30, 2024, $ 119.1 million was classified as current Deferred revenue and $ 14.7 million was classified as non-current Deferred revenue with respect to the Australia APA in the Company’s consolidated balance sheet.

If the Company is unable to satisfy its obligations under the Australia APA, $ 92.5 million of deferred revenue may become refundable and approximately $ 225 million of remaining funds under the contract may no longer be available.

As of September 30, 2024, $ 119.1 million was classified as current Deferred revenue and $ 14.7 million was classified as non-current Deferred revenue with respect to the Australia APA in the Company’s consolidated balance sheet.

If the Company is unable to satisfy its obligations under the amended Australia APA, $ 92.5 million of deferred revenue may become refundable and approximately $ 225 million of remaining funds under the contract may no longer be available.

The Company has an APA with His Majesty the King in Right of Canada as represented by the Minister of Public Works and Government Services, as successor in interest to Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works and Government Services (the “Canadian government”), for the purchase of doses of COVID-19 Vaccine (the “Canada APA”).

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on or before December 31, 2024 .

The Company does not anticipate achieving regulatory approval of its COVID-19 Vaccine using bulk antigen produced at BMC on or before December 31, 2024 .

The Company does not expect to receive regulatory approval of its COVID-19 Vaccine using bulk antigen produced at BMC on or before December 31, 2024 .

Therefore, the Company plans to seek an amendment to the Canada APA to address possible alternatives, which may not be achievable on acceptable terms or at all.

As of June 30, 2024, $ 452.1 million was classified as current Deferred revenue and $ 136.1 million was classified as non-current Deferred revenue with respect to the Canadian APA in the Company’s consolidated balance sheet.

As of September 30, 2024, $ 452.1 million was classified as current Deferred revenue and $ 136.1 million was classified as non-current Deferred revenue with respect to the Canadian APA in the Company’s consolidated balance sheet.

If the Canadian government terminates the Canada APA, $ 28.0 million of the deferred revenue would become refundable and approximately $ 224 million of the contract value related to future deliverables would no longer be available.

In July 2024, the Pharmaceutical Management Agency (“Pharmac”), a New Zealand Crown entity, provided notice of its termination of its APA (the “New Zealand APA”).

As of June 30, 2024, $ 31.3 million was classified as current Deferred revenue with respect to such agreement in the Company’s consolidated balance sheet.

New Zealand has requested a refund of certain advanced payments and the Company is in discussion with Pharmac on both, whether its termination of the New Zealand APA was appropriate under the New Zealand APA, and whether a refund of the advanced payments is appropriate under the New Zealand APA.

Ap proximately $ 125 million of the contract value related to future deliverables may no longer be available if the APA is terminated.

Pharmac has requested a refund of certain advanced payments, and the Company is in discussion with Pharmac regarding whether a refund of the advanced payments is appropriate under the New Zealand APA.

As of September 30, 2024, $ 31.3 million was reclassified from current Deferred revenue to Other current liabilities in the Company’s consolidated balance sheet.

Approximately $ 125 million of the contract value related to future deliverables may no longer be available if the New Zealand APA is terminated.

The Company responded to Pharmac in September 2024 indicating it does not believe Pharmac has the right to unilaterally terminate the contract or receive a refund of any part of the remaining upfront payment.

Licensing, Royalties, and Other

Licensing, royalties, and other includes Licensing payments, Transition Services revenue, and Technology Transfer revenue from the Company’s Collaboration and License Agreement with Sanofi (“Sanofi CLA”);

Licensing, royalties, and other includes licensing payments, transition services revenue, and technology transfer revenue from the Sanofi CLA;

royalty milestone payments;

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and Matrix-M™ adjuvant sales.

During the three and six months ended June 30, 2024, respectively, the Company recognized $ 386.3 million and $ 390.3 million in revenue related to license fees and $ 2.7 million and $ 10.2 million in revenue related to Matrix-M™ adjuvant sales, respectively.

During the three and six months ended June 30, 2024, the Company recognized $ 6.6 million of Transition Services revenue.

During the three and six months ended June 30, 2023, the Company recognized $ 2.2 million and $ 3.2 million in revenue related to Matrix-M™ adjuvant sales.

During the three and six months ended June 30, 2023, the Company did not recognize revenue related to license fees or milestone payments.

During the three and nine months ended September 30, 2024, respectively, the Company recognized $ 9.9 million and $ 400.1 million in revenue related to license fees and sales-based royalties and $ 2.3 million and $ 11.9 million in revenue related to Matrix-M™ adjuvant sales, respectively.

During the three and nine months ended September 30, 2024, the Company recognized $ 32.7 million and $ 39.4 million of transition services revenue and technology transfer revenue, respectively.

During the three and nine months ended September 30, 2023, the Company recognized $ 13.8 million and $ 17.0 million in revenue related to Matrix-M™ adjuvant sales.

During the three and nine months ended September 30, 2023, the Company recognized $ 6.0 million in revenue related related to sales-based royalties.

The Company’s U.S.

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Note 6 – Collaboration, License, and Supply Agreements

As of June 30, 2024, the Company’s material collaborations, license and supply agreements were as follows:

As of September 30, 2024, the Company’s material collaborations, license and supply agreements were as follows:

The Company previously granted SII exclusive and non-exclusive licenses for the development, co-formulation, filling and finishing, registration, and commercialization of its prototype vaccine, NVX-CoV2601, its updated vaccine, and its CIC vaccine candidate.

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The Company and SII equally split the revenue from SII’s sale of COVID-19 Vaccine in its licensed territory, net of agreed costs.

In May 2024, the Company and SLS entered into a supply agreement (the “SLS Supply Agreement”) under which SLS will supply the Company with antigen drug substance and finished COVID-19 Vaccine doses.

In May 2024, the Company and SLS entered into a supply agreement (the “SLS Supply Agreement”) under which SLS agreed to supply the Company with antigen drug substance and finished COVID-19 Vaccine doses.

The SLS Supply Agreement includes the general terms and conditions of supply orders between the Company and SLS.

The Company and SLS intend to execute statements of work and firm purchase orders to included specific quantities to be delivered under the SLS Supply Agreement.

The Company will supply SLS with all Matrix-M™ adjuvant needed to manufacture finished COVID-19 Vaccine doses.

The Company and SLS execute firm purchase orders, which include specific quantities to be delivered under the SLS Supply Agreement.

The Company agreed to supply SLS with all Matrix-M™ adjuvant needed to manufacture finished COVID-19 Vaccine doses.

In March 2020, the Company entered into an agreement with SII that granted SII a non-exclusive license for the use of Matrix-M™ adjuvant supplied by the Company to develop, manufacture, and commercialize R21/Matrix-M™ adjuvant (“SII R21 Agreement”), a malaria vaccine created by the Jenner Institute, University of Oxford (“R21/Matrix-M™”).

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Pursuant to the Sanofi CLA, the Company received a non-refundable upfront payment of $ 500 million in the second quarter of 2024.

In addition, the Company will also be eligible to receive development, technology transfer, launch, and sales milestone payments totaling up to $ 700 million in the aggregate with respect to the COVID-19 Vaccine Products and royalty payments on Sanofi’s sales of such licensed products.

Milestone payments are comprised of a payment of $ 175 million upon the approval of the marketing authorization for a COVID-19 Vaccine Product in a pre-filled syringe from the FDA, $ 25 million upon the transfer of such approval to Sanofi, $ 25 million upon the transfer of EMA approval of a COVID-19 Vaccine Product in a pre-filled syringe to Sanofi, $ 50 million upon database lock of an existing Phase 2/3 clinical trial (identifier 2019nCoV-503), $ 75 million upon the completion of the technology transfer of the Company’s manufacturing process for the COVID-19 Vaccine Products to Sanofi, and up to $ 350 million in CIC Product-related development and launch milestones.

In addition, the Company is eligible to receive development, technology transfer, launch, and sales milestone payments totaling up to $ 700 million in the aggregate with respect to the COVID-19 Vaccine Products and royalty payments on Sanofi’s sales of such licensed products.

Milestone payments are comprised of a payment of $ 175 million upon the approval of the marketing authorization for a COVID-19 Vaccine Product in a pre-filled syringe from the U.S.

Food and Drug Administration (“U.S.

FDA”), $ 25 million upon the transfer of such approval to Sanofi, $ 25 million upon the transfer of EMA approval of a COVID-19 Vaccine Product in a pre-filled syringe to Sanofi, $ 50 million upon database lock of an existing Phase 2/3 clinical trial (identifier 2019nCoV-503), $ 75 million upon the completion of the technology transfer of the Company’s manufacturing process for the COVID-19 Vaccine Products to Sanofi, and up to $ 350 million in CIC Product-related development and launch milestones.

The Company is also eligible to receive development, launch, and sales milestone payments of up to $ 200 million for each of the first four Adjuvant Products and $ 210 million for each Adjuvant Product thereafter, and royalty payments on Sanofi’s sales of all such licensed products.

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The Company will re-evaluate the transaction price in each reporting period as uncertain events are resolved or other changes in circumstances occur.

The Company allocated the fixed consideration (i.e., the $ 500 million nonrefundable upfront fee) to the performance obligations in the Sanofi CLA based on each performance obligation’s relative standalone selling price, or SSP, as follows:

• $ 389.6 million for the upfront transfer of the licenses;

• $ 110.2 million for Transition Services;

• $ 3.5 million for Technology Transfer.

• $ 106.9 million for Sanofi Transition Services;

• $ 3.5 million for Sanofi Technology Transfer.

The SSP for the licenses were determined using an approach that considered discounted, probability-weighted cash flows related to the license transferred.

In developing such estimates, the Company applied judgment in determining the forecasted revenues expected margins, and the discount rate.

The SSP for the ongoing Transition Services and Technology Transfer were based on estimates of the associated effort and cost of these services, adjusted for a reasonable gross profit margin that would be expected to be realized under similar contracts.

The SSP for the ongoing Sanofi Transition Services and Sanofi Technology Transfer were based on estimates of the associated effort and cost of these services, adjusted for a reasonable gross profit margin that would be expected to be realized under similar contracts.

The Company recognized revenue related to the licenses at a point in time upon transfer of the rights and control of the license to Sanofi during the second quarter 2024.

The Sanofi Transition Services and Technology Transfer are recognized in revenue over time using an input method to measure progress by utilizing costs incurred to-date relative to total expected costs.

Revenue recognized related to Sanofi Transition Services and Technology Transfer for the three and six month period ended June 30, 2024 was $ 6.6 million.

The Company’s consolidated balance sheet as of June 30, 2024 includes a deferred revenue balance of $ 109.2 million ($ 50.9 million included in Deferred revenue, current portion and $ 58.3 million included in Deferred revenue, non-current portion) related to Transition Services and Technology Transfer.

The Sanofi Transition Services and Sanofi Technology Transfer are recognized in revenue over time using an input method to measure progress by utilizing costs incurred to-date relative to total expected costs.

Revenue recognized related to Sanofi Transition Services and Sanofi Technology Transfer for the three and nine month period ended September 30, 2024 was $ 32.7 million and $ 39.4 million, respectively.

The Company’s consolidated balance sheet as of September 30, 2024 includes a deferred revenue balance of $ 70.0 million ($ 29.8 million included in Deferred revenue, current portion and $ 40.2 million included in Deferred revenue, non-current portion) related to Sanofi Transition Services and Sanofi Technology Transfer.

The Company recognized an asset for $ 35.0 million of direct costs incurred to obtain the Sanofi CLA.

These costs are amortized to expense over the expected period of the benefit in a manner that is consistent with the transfer of the related goods and services in the Sanofi CLA.

The Company recognized $ 27.1 million of amortization expense related to the asset in Selling, general, and administrative expense in the second quarter of 2024.

In May 2024, the Company also entered into the Subscription Agreement, pursuant to which the Company sold and issued to Sanofi, in a private placement, 6,880,481 shares of the Company’s common stock, par value $ 0.01 per share at a price of $ 10.00 per share for aggregate gross proceeds to the Company of $ 68.8 million.

The Company recognized $ 0.9 million and $ 28.0 million of amortization expense related to the asset in Selling, general, and administrative expense for the three and nine months ended September 30, 2024, respectively.

In May 2024, the Company also entered into the Subscription Agreement, pursuant to which the Company sold and issued to Sanofi, in a private placement, 6.9 million shares of the Company’s common stock, at a price of $ 10.00 per share for aggregate gross proceeds to the Company of $ 68.8 million.

The opening price of the Company’s common stock on the date of the sale approximated $ 10.00 per share and therefore all gross proceeds were allocated to stockholders’ deficit.

Bill & Melinda Gates Medical Research Institute

In May 2023, the Company entered into a three-year agreement with the Bill & Melinda Gates Medical Research

Institute to provide the Company’s Matrix-M™ adjuvant for use in preclinical vaccine research.

In May 2023, the Company entered into a three-year agreement with the Bill & Melinda Gates Medical Research Institute to provide the Company’s Matrix-M™ adjuvant for use in preclinical vaccine research.

Other Supply Agreements

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Pursuant to the Settlement Agreement, in March 2024, the Company paid $ 42.0 million to Fujifilm, the parties agreed to a mutual release of claims arising from, under or otherwise in connection with the CSAR, and Fujifilm agreed to dismiss the Fujifilm Arbitration.

This payment is less than amounts previously accrued for and reflected in Research and development expense, and accordingly, the Company recorded a benefit of $ 26.6 million as Research and development expense during the six months ended June 30, 2024 upon the execution of the Settlement Agreement.

This payment is less than amounts previously accrued for and reflected in Research and development expense, and accordingly, the Company recorded a benefit of $ 26.6 million as Research and development expense during the nine months ended September 30, 2024 upon the execution of the Settlement Agreement.

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, its COVID-19 Program, and in doing so, recognizes that significant costs may be incurred.

Note 7 – Earnings (Loss) per Share

Basic and diluted net income (loss) per share were calculated as follows (in thousands, except per share data):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net income (loss), basic $ 162,381 $ 58,008 $ 14,831 $ ( 235,897 )

Interest on convertible notes 2,608 2,582 — —

Net income (loss), dilutive 164,989 60,590 14,831 ( 235,897 )

Weighted average number of common shares outstanding, basic 148,379 89,362 144,147 87,769

Effect of dilutive securities 17,476 14,703 974 —

Weighted average number of common shares outstanding, dilutive 165,855 104,065 145,121 87,769

Net income (loss) per share:

Basic $ 1.09 $ 0.65 $ 0.10 $ ( 2.69 )

Diluted $ 0.99 $ 0.58 $ 0.10 $ ( 2.69 )

Anti-dilutive securities excluded from calculations of diluted net income (loss) per share 4,544 6,791 21,654 23,447

Note 7 – Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets that sums to the total of such amounts shown in the consolidated statements of cash flows (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Cash and cash equivalents $ 573,630 $ 568,505

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Cash, cash equivalents, and restricted cash $ 588,587 $ 583,810

(1) Classified as Other non-current assets as of June 30, 2024 and December 31, 2023, on the consolidated balance sheets.

(1) Classified as Other non-current assets as of September 30, 2024 and December 31, 2023, on the consolidated balance sheets.

Note 8 – Inventory

Inventory consisted of the following (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Raw materials $ 1,603 $ 6,614

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Inventory write-downs as a result of excess, obsolescence, expiry, or other reasons, and losses on firm purchase commitments, offset by recoveries of such commitments, are recorded as a component of cost of sales in the Company’s consolidated statements of operations.

For the three and six months ended June 30, 2024, inventory write-downs were $ 9.7 million and $ 18.5 million, respectively, and losses on firm purchase commitments were $ 1.7 million.

For the three and six months ended June 30, 2023, inventory write-downs were $ 19.1 million and $ 31.5 million, respectively, and losses on firm purchase commitments were $ 0.7 million and $ 8.5 million.

In addition, for the three and six months ended June 30, 2023 the Company recorded recoveries on firm purchase commitments of $ 17.9 million and $ 18.8 million, respectively, related primarily to negotiated reductions to previously recognized firm purchase commitments .

For the three and nine months ended September 30, 2024, inventory write-downs were $ 1.4 million and $ 19.9 million, respectively, and losses on firm purchase commitments were $ 4.8 million and $ 6.5 million, respectively.

For the three and nine months ended September 30, 2024, the Company recorded recoveries on firm purchase commitments of $ 0.7 million related primarily to negotiated reductions to previously recognized firm purchase commitments.

Also, for the three and nine months ended September 30, 2024, the Company recorded an impairment charge of $ 3.8 million in Cost of sales related to an embedded lease agreement with a CMO for production capacity in excess of production needs.

For the three and nine months ended September 30, 2023, inventory write-downs were $ 18.1 million and $ 49.6 million, respectively, and losses on firm purchase commitments were $ 63.5 million and $ 71.9 million.

In addition, for the three and nine months ended September 30, 2023, the Company recorded recoveries on firm purchase commitments of $ 21.5 million and $ 40.3 million, respectively, related primarily to negotiated reductions to previously recognized firm purchase commitments .

Note 9 – Goodwill

The Company has one reporting unit, which has a negative carrying amount as of June 30, 2024 and December 31, 2023.

The change in the carrying amounts of goodwill for the six months ended June 30, 2024 was as follows (in thousands):

The Company has one reporting unit, which has a negative carrying amount as of September 30, 2024 and December 31, 2023.

The change in the carrying amounts of goodwill for the nine months ended September 30, 2024 was as follows (in thousands):

Balance at December 31, 2023 $ 127,454

Currency translation adjustments ( 688 )

Balance at June 30, 2024 $ 123,377

Balance at September 30, 2024 $ 126,766

Note 10 – Long-Term Debt

Total convertible notes payable consisted of the following (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

5.00 % Convertible notes due 2027

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The effective interest rate of the 2027 Convertible notes is 6.2 %.

During the six months ended June 30, 2023, the Company repaid the outstanding principal amount of $ 325.0 million on its 3.75 % Convertible notes due in 2023, together with accrued

but unpaid interest on the maturity date.

During the nine months ended September 30, 2023, the Company repaid the outstanding principal amount of $ 325.0 million on its 3.75 % Convertible notes due in 2023, together with accrued but unpaid interest on the maturity date.

The interest expense incurred in connection with the convertible notes payable consisted of the following (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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In August 2023, the Company entered into an At Market Issuance Sales Agreement (the “August 2023 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 entered in June 2021 (the “June 2021 Sales Agreement”).

During the three and six months ended June 30, 2024, the Company sold $ 12 million shares of its common stock resulting in net proceeds of approximately $ 188 million, under the August 2023 Sales Agreement.

As of June 30, 2024, the remaining balance available under the August 2023 Sales Agreement was approximately $ 51 million.

During the three and six months ended June 30, 2023, the Company sold 7.9 million shares of its common stock under its June 2021 Sales Agreement resulting in net proceeds of approximately $ 68 million, of which $ 6 million was included in prepaid expenses and other current assets as of June 30, 2023 and received in cash in July 2023.

During the nine months ended September 30, 2024, the Company sold 12.2 million shares of its common stock under its August 2023 Sales Agreement resulting in net proceeds of approximately $ 188 million.

There were no sales recorded under the August 2023 Sales Agreement during the three months ended September 30, 2024.

As of September 30, 2024, the remaining balance available under the August 2023 Sales Agreement was approximately $ 51 million.

During the nine months ended September 30, 2023, the Company sold 25.7 million shares of its common stock under its June 2021 and August 2023 Sales Agreement, resulting in net proceeds of approximately $ 211 million.

During the three months ended September 30, 2023, the Company sold 17.8 million shares of its common stock under its August 2023 Sales Agreement, resulting in net proceeds of approximately $ 143 million .

In May 2024, the Company also entered into the Subscription Agreement, pursuant to which the Company sold and issued to Sanofi, in a private placement, 6.9 million shares of the Company’s common stock, par value $ 0.01 per share at a price of $ 10.00 per share, for aggregate gross proceeds to the Company of $ 68.8 million.

In August 2023, the Company entered into a Securities Subscription Agreement with SK bioscience Co., Ltd.

(“SK”), pursuant to which the Company agreed to sell and issue to SK 6.5 million shares of the Company’s common stock at a price of $ 13.00 per share (the “SK Shares”) in a private placement (the “Private Placement”) for aggregate gross proceeds to the Company of approximately $ 84.5 million .

The Company recognized the SK Shares at the settlement date fair value of $ 46.5 million .

The closing of the Private Placement occurred on August 10, 2023.

Note 12 – Stock-Based Compensation

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The Company reserved 1.0 million shares of common stock for grants under the 2023 Inducement Plan.

As of June 30, 2024, there were 0.2 million shares available for issuance under the 2023 Inducement Plan.

As of September 30, 2024, there were 0.2 million shares available for issuance under the 2023 Inducement Plan.

The 2015 Stock Incentive Plan, as amended (“2015 Plan”), was approved at the Company’s annual meeting of stockholders in June 2015.

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The 2015 Plan will expire on April 18, 2034.

As of June 30, 2024, there were 9.4 million shares available for issuance under the 2015 Plan.

As of September 30, 2024, there were 10.7 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.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Total stock-based compensation expense $ 12,049 $ 20,760 $ 37,704 $ 69,699

During the three and six months ended June 30, 2024 and 2023, there was no stock-based compensation expense capitalized into inventory.

As of June 30, 2024, there was approximately $ 73 million of total unrecognized compensation expense related to unvested stock options, SARs, RSUs, and the ESPP.

During the three and nine months ended September 30, 2024 ther e was no stock-based compensation expense capitalized into inventory.

During the three and nine months ended September 30, 2023, total stock-based compensation capitalized in inventory was $ 0.5 million.

As of September 30, 2024, there was approximately $ 55 million of total unrecognized compensation expense related to unvested stock options, SARs, RSUs, and the Company’s Employee Stock Purchase Plan (“ESPP”).

This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of approximately one year and will be allocated between cost of sales, research and development, and general and administrative expenses accordingly.

This estimate does not include the impact of other possible stock-based awards that may be made during future periods.

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 SAR holders exercised their stock options and SARs on June 30, 2024.

This amount is subject to change based on changes to the closing price of the Company's common stock.

The aggregate intrinsic value of stock options and SARs exercises and vesting of RSUs for the six months ended June 30, 2024 and 2023 was approximately $ 8 million and $ 2 million, respectively.

The aggregate intrinsic value of stock options and SARs exercises and vesting of RSUs for the nine months ended September 30, 2024 and 2023 was approximately $ 10 million and $ 3 million, respectively.

Stock Options and Stock Appreciation Rights

The following is a summary of stock options and SARs activity under the 2023 Inducement Plan, 2015 Plan, and 2005 Plan for the six months ended June 30, 2024:

The following is a summary of stock options and SARs activity under the 2023 Inducement Plan, 2015 Plan, and 2005 Plan for the nine months ended September 30, 2024:

2023 Inducement Plan 2015 Plan 2005 Plan

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Canceled — — ( 1,388,350 ) 45.07 ( 57,981 ) 119.80

Outstanding at June 30, 2024 422,800 $ 10.67 4,642,946 $ 34.61 444 $ 108.67

Shares exercisable at June 30, 2024 124,174 $ 11.06 3,076,820 $ 43.67 444 $ 108.67

Outstanding at September 30, 2024 422,800 $ 10.67 3,723,387 $ 32.70 294 $ 118.40

Shares exercisable at September 30, 2024 162,636 $ 10.84 2,304,516 $ 43.54 294 $ 118.40

The fair value of stock options granted under the 2023 Inducement Plan and the 2015 Plan was estimated at the date of

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Weighted average Black-Scholes fair value of stock options granted $ — $ 7.84 $ 5.86

$ 6.79 $ 5.86

Risk-free interest rate — % 4.3 %- 4.4 %

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120.4 %- 140.3 %

Expected term (in years) — 3.9 - 5.1

The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs outstanding under the 2023 Inducement Plan, 2015 Plan and 2005 Plan as of June 30, 2024 was $ 12.3 million and 7.0 years, respectively.

The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs exercisable under the 2023 Inducement Plan, 2015 Plan and 2005 Plan as of June 30, 2024 was $ 3.7 million and 6.0 years, respectively.

The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs outstanding under the 2023 Inducement Plan, 2015 Plan and 2005 Plan as of September 30, 2024 was $ 11.6 million and 7.1 years, respectively.

The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs exercisable under the 2023 Inducement Plan, 2015 Plan and 2005 Plan as of September 30, 2024 was $ 3.7 million and 6.0 years, respectively.

Restricted Stock Units

The following is a summary of RSU activity for the six months ended June 30, 2024:

The following is a summary of RSU activity for the nine months ended September 30, 2024:

2023 Inducement Plan 2015 Plan

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Forfeited — — ( 1,146,527 ) 13.95

Outstanding and unvested at June 30, 2024 261,193 $ 10.55 6,629,493 $ 9.49

Outstanding and unvested at September 30, 2024 242,659 $ 10.66 6,085,709 $ 8.92

Employee Stock Purchase Plan

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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).

As of June 30, 2024, there were 1.2 million shares available for issuance under the ESPP.

As of September 30, 2024, there were 1.0 million shares available for issuance under the ESPP.

Note 13 – Income Taxes

The Company evaluates the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets.

Significant pieces of objective evidence evaluated by the Company were the cumulative loss incurred over the three-year period ended June 30, 2024 and that the Company has historically generated pretax losses.

Significant pieces of objective evidence evaluated by the Company were the cumulative loss incurred over the three-year period ended September 30, 2024 and that the Company has historically generated pretax losses.

Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth.

On the basis of this evaluation, as of June 30, 2024, the Company continued to maintain a full valuation allowance against its deferred tax assets, except to the extent Net Operating Losses (“NOLs”) have been used to reduce taxable income.

As of June 30, 2024, the Company has $ 2.3 billion of U.S.

Federal NOLs carryforward, and all are subject to limitation in accordance with the 2017 Tax Cuts and Jobs Act (“TCJA”), which limits allowable NOL deductions to 80% of federal taxable income.

For the three months ended June 30, 2024 and 2023, the Company recognized $ 2.2 million and $( 0.1 ) million of federal, state, and foreign income tax expense (benefit), respectively.

During the six months ended June 30, 2024 and 2023, the Company recognized $ 4.5 million and $ 1.0 million of federal, state, and foreign income tax expense, respectively.

On the basis of this evaluation, as of September 30, 2024, the Company continued to maintain a full valuation allowance against its deferred tax assets, except to the extent Net Operating Losses (“NOLs”) have been used to reduce taxable income.

During the three months ended September 30, 2024 and 2023, the Company recognized $ 1.3 million and $ 0.7 million of federal, state, and foreign income tax benefit, respectively.

During the nine months ended September 30, 2024 and 2023, the Company recognized $ 3.1 million and $ 0.3 million of federal, state, and foreign income tax expense, respectively.

During the three and nine months ended September 30, 2024, the company recognized $ 0.3 million of foreign withholding tax expense.

During the three and nine months ended September 30, 2023, the company did no t recognize any foreign withholding tax expense.

Note 14 – Commitments and Contingencies

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8:21-cv-02910-TDC (the “Sinnathurai Action”).

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.

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 prototype vaccine on a commercial scale and to secure the prototype vaccine’s regulatory approval.

The amended complaint defines the purported class as those stockholders who purchased the Company’s securities between February 24, 2021 and October 19, 2021.

On April 25, 2022, the defendants filed a motion to dismiss the consolidated amended complaint.

On December 12, 2022, the Maryland Court issued a ruling granting in part and denying in part defendants’ motion to dismiss.

The Maryland Court dismissed all claims against two individual defendants and claims based on certain public statements challenged in the consolidated amended complaint.

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 .

On December 27, 2022, the Company filed its answer and affirmative defenses.

On March 16, 2023, the plaintiffs filed a motion for class certification and to appoint class representatives and counsel.

The Company filed its opposition to the plaintiffs’ motion on September 22, 2023.

On December 4, 2023, the parties agreed to a binding settlement in principle (the “Proposed Settlement”) to fully resolve the surviving claims in the Sinnathurai Action.

Under the Proposed Settlement’s terms, the Company agreed to pay $ 47 million into a settlement fund, which will be funded by the Company’s directors and officers’ liability insurance and paid to members of a putative settlement class.

On January 12, 2024, after the parties negotiated and executed a written agreement governing the Proposed Settlement, plaintiffs filed an unopposed motion for the Proposed Settlement’s preliminary approval.

On January 23, 2024, the Maryland Court granted the motion for preliminary approval and, as requested by the parties, preliminarily certified, for the purposes of settlement only, the settlement class.

The court also scheduled a settlement hearing to consider final approval of the settlement for May 23, 2024.

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.

At the May 23 settlement hearing, the Maryland Court granted final approval of the settlement.

The parties ultimately negotiated a settlement, which the Maryland Court approved on May 23, 2024.

The Maryland Court closed the Sinnathurai Action on May 24, 2024.

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On June 7, 2024, the court entered another order extending the stay until August 5, 2024.

This includes staying the deadline for the individual defendants to respond to the consolidated amended complaint.

On August 5, 2024, the parties agreed to a further 90-day extension to November 4, 2024, which remains subject to court approval.

On August 19, 2024, the court entered another order extending the stay until November 4, 2024, to allow the SLC and the parties to continue then-ongoing mediation efforts.

On November 1, 2024, the parties notified the court that a settlement in principle had been reached and requested the stay to be extended until the definitive settlement agreement is filed.

On November 4, 2024, the Maryland Court ordered the parties to file the settlement agreement or a joint status report by November 18, 2024.

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 December 14, 2023, the parties filed a stipulation (i) extending the plaintiffs’ deadline to file a consolidated complaint until January 29, 2024, and (ii) otherwise staying all other proceedings in the case (including the defendants’ deadline to respond to the consolidated complaint) until February 12, 2024.

The stipulation entered by the court instructs the parties to discuss whether the stay should be further extended in light of the then-current status of the SLC’s investigation.

On May 3, 2024, the plaintiffs filed a consolidated complaint.

1 unchanged sentence

On July 12, 2024, the court entered an order staying the action until August 5, 2024.

On September 24, 2024, the court entered another order staying the action until November 4, 2024.

On November 4, 2024, the parties filed a stipulation requesting a status conference with the court and further requesting that the action remain stayed until such status conference takes place.

The financial impact of the above derivative claims is not reasonably estimable.

3 unchanged sentences

In May 2023, the Company announced a global restructuring and cost reduction plan (the “2023 Restructuring Plan”), which includes a more focused investment in its COVID-19 Vaccine, reduction to its pipeline spending, the continued rationalization of its manufacturing network, a reduction to the Company’s global workforce, as well as the consolidation of facilities and infrastructure.

In January 2024, the Company announced further reductions to its global workforce which supplemented the 2023 Restructuring Plan and both are jointly referred to as the “Restructuring Plan.”

In January 2024, the Company announced further reductions to its global workforce, which supplemented the 2023 Restructuring Plan, jointly referred to as the “Restructuring Plan.”

The Company recorded the following restructuring charge related to the Restructuring Plan in the consolidated statements of operations (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

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$ 4,245 $ — $ 11,434 $ 14,584

(1) Restructuring charges of $ 0.5 million, $ 0.3 million and $ 0.3 million are included in Cost of sales, Research and development and Selling, general, and administrative expenses, respectively, in the Consolidated Statements of Operations for the three months ended June 30, 2024.

Restructuring charges of $ 0.5 million, $ 1.9 million and $ 4.8 million are included in Cost of sales, Research and development and Selling, general, and administrative expenses, respectively, in the Consolidated Statements of Operations for the six months ended June 30, 2024.

Restructuring charges of $ 0.5 million, $ 2.7 million and $ 11.5 million are included in Cost of sales, Research and development and Selling, general, and administrative expenses, respectively, in the Consolidated Statements of Operations for the three and six months ended June 30, 2023 .

(1) Restructuring charges of $ 0.4 million and $ 3.8 million are included in Research and development and Selling, general, and administrative expenses, respectively, in the Consolidated Statements of Operations for the three months ended September 30, 2024.

Restructuring charges of $ 0.5 million, $ 2.3 million and $ 8.6 million are included in Cost of sales, Research and development and Selling, general, and administrative expenses, respectively, in the Consolidated Statements of Operations for the nine months ended September 30, 2024.

Restructuring charges of $ 0.5 million, $ 2.3 million and $ 11.5 million are included in Cost of sales, Research and development and Selling, general, and administrative expenses, respectively, in the Consolidated Statements of Operations for the nine months ended September 30, 2023 .

Severance and employee benefit costs

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The Company recorded a severance and termination benefit cost in full for employees who were notified of their termination during the reporting period and had no requirements for future service.

The Company paid a total of $ 5.5 million for the severance and employee benefit costs during the six months ended June 30, 2024 and had no remaining liability as of June 30, 2024 or December 31, 2023.

The Company paid a total of $ 8.2 million and $ 4.3 million for the severance and employee benefit costs during the nine months ended September 30, 2024 and September 30, 2023, respectively, and had a remaining liability of $ 1.6 million as of September 30, 2024.

The Company had no remaining liability as of December 31, 2023.

Impairment of assets

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The Company performed an impairment evaluation for the applicable long-lived assets, which is subject to judgment and actual results may vary from the estimates, resulting in potential future adjustments to amounts recorded.

During the six months ended June 30, 2024, the Company recorded an impairment charge of $ 1.7 million related to the impairment of capitalized internal-use software.

During the three and six months ended June 30, 2023 , the Company recorded an impairment charge of $ 10.1 million related to the impairment of

During the nine months ended September 30, 2024, the Company recorded an impairment charge of $ 1.7 million related to the impairment of capitalized internal-use software.

During the nine months ended September 30, 2023 , the Company recorded an impairment charge of $ 10.1 million related to the impairment of

long-lived assets, including $ 5.9 million related to ROU assets for facility leases.

The Company did not recognize any impairment of assets related restructuring charges during the three months ended June 30, 2024.

The Company did not recognize any impairment of assets related restructuring charges during the three months ended September 30, 2024 and 2023.

Note 16 – Subsequent Events

In July 2024, Pharmac provided notice of its termination of the New Zealand APA (see Note 5).

On October 16, 2024, Novavax disclosed that the U.S.

FDA had placed a clinical hold on Novavax’s Investigational New Drug Application for its COVID-19-Influenza Combination and stand-alone influenza vaccine candidates.

On November 11, 2024, Novavax announced that the U.S.

FDA has lifted the previously disclosed clinical hold for Novavax’s COVID-19-Influenza Combination and stand-alone influenza vaccine candidates.

In November 2024, the Company and The Secretary of State for Health and Social Care, acting as part of the Crown, through the UK Health Security Agency (the “Authority”), entered into a Termination and Settlement Agreement (the “Settlement Agreement”) and a Letter of Amendment to the Settlement Agreement (the “Settlement Agreement Amendment”), relating to the Amended and Restated SARS-COV-2 Vaccine Supply Agreement effective July 1, 2022 (the “Amended and Restated Supply Agreement”) by and between the Company and the UK Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the Crown, settling the disputes regarding the Amended and Restated Supply Agreement and releasing both parties of all claims arising out of or connected with the Amended and Restated Supply Agreement.

Under the terms of the Settlement Agreement, the Authority and the Company agreed to terminate the Amended and Restated Supply Agreement and to fully settle the outstanding amount under dispute related to upfront payment of $ 112.5 million, which is reflected in Other current liabilities on the consolidated balance sheet, previously received by the Company from the Authority under the Amended and Restated Supply Agreement.

Pursuant to the Settlement Agreement, the Company agreed to pay a refund of $ 123.8 million (the “Settlement Payment”) to the Authority in equal quarterly installments of $ 10.3 million over a three year period, ending in June 2027.

The Settlement Payment amount includes a $ 11.3 million provision for interest over the period and may be avoided if the Company chooses to accelerate payments.

Under the terms of the Settlement Agreement Amendment, the Authority and the Company agreed to the date of payment for the first quarterly installment to be November 30, 2024.

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.

What changed 10-Q

Item 1. Financial Statements