What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-08 · 231 added, 225 removed, 324 unchanged (58% of the section changed)

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Such forward-looking statements include, without limitation, statements about our capabilities, goals, expectations regarding future revenue and expense levels, and capital raising activities;

our operating plans and prospects, including our ability to continue as a going concern through one year from the date of our unaudited financial statements for the period ended June 30, 2024 are issued;

our global restructuring and cost reduction plan (“Restructuring Plan”), which includes a more focused investment in our COVID-19 program (which currently includes our prototype COVID-19 vaccine ("NVX-CoV2373” or “prototype vaccine”) and XBB COVID-19 vaccine (“NVX-CoV2601”) and our updated vaccine for the 2024-2025 vaccination season (“NVX-CoV2705,” or “updated vaccine” and, collectively with NVX-CoV2373 and NVX-CoV2601, our “COVID-19 Vaccine” or “COVID-19 Program”), 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 our (“COVID-19 Program,” or “COVID-19 Vaccine”));

our operating plans and prospects, including our ability to continue as a going concern through one year from the date of our unaudited financial statements for the period ended September 30, 2024 are issued;

our global restructuring and cost reduction plan (“Restructuring Plan”), which includes a more focused investment in our COVID-19 program (which currently includes our prototype COVID-19 vaccine ("NVX-CoV2373” or “prototype vaccine”), our XBB COVID-19 vaccine (“NVX-CoV2601”) and our updated vaccine for the 2024-2025 vaccination season (“NVX-CoV2705,” or “updated vaccine” and, collectively with NVX-CoV2373 and NVX-CoV2601, our “COVID-19 Vaccine” or “COVID-19 Program”), 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));

our cash flow forecast and projected revenue, including potential royalties and milestones pursuant to our collaboration and license agreement (the “Sanofi CLA”) with Sanofi Pasteur Inc.

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our expectation of manufacturing capacity, timing, production, distribution, and delivery for our COVID-19 Vaccine by us and our partners;

our expectations with respect to the anticipated ongoing development and commercialization or licensure of the COVID-19 Vaccine, ongoing development of COVID-19 variant strain-containing monovalent or bivalent formulations, including the Phase 2b/3 Hummingbird™ trial, and our COVID-19 Influenza Combination (“CIC”) vaccine candidate and our stand-alone influenza vaccine candidate;

our expectations with respect to the anticipated ongoing development and commercialization or licensure of the COVID-19 Vaccine;

our expectations with respect to the anticipated ongoing development of COVID-19 variant strain-containing monovalent or bivalent formulations, including the Phase 2b/3 Hummingbird™ trial, and our CIC vaccine candidate and our stand-alone influenza vaccine candidate including partnership efforts for our CIC vaccine candidate and stand-alone influenza vaccine candidate to advance towards a Biologics License Application ("BLA") filing and commercialization;

efforts to expand the COVID-19 Vaccine label worldwide as a booster, and to various age groups and geographic locations;

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Forward-looking statements involve estimates, assumptions, risks, and uncertainties that could cause actual results or outcomes to differ materially from those expressed or implied in any forward-looking statements, and, therefore, you should not place considerable reliance on any such forward-looking statements.

Such risks and uncertainties include, without limitation, our ability to successfully and timely manufacture, distribute, or market our COVID-19 Vaccine including as a single dose vial or pre-filled syringe product presentation for the 2024-2025 vaccination season and our ability to receive a Biologics License Application (“BLA”) from the U.S.

Such risks and uncertainties include, without limitation, our ability to successfully and timely manufacture, market, distribute, or deliver our COVID-19 Vaccine and the impact of our not having received a BLA from the U.S.

Food and Drug Administration (“U.S.

FDA”) for the 2024-2025 vaccination season;

challenges related to the transition to our new partnership with Sanofi;

challenges related to our partnership with Sanofi and in pursuing additional partnership opportunities;

challenges satisfying, alone or together with partners, various safety, efficacy, and product characterization requirements, including those related to process qualification, assay validation, and stability testing, necessary to satisfy applicable regulatory authorities;

challenges or delays in conducting clinical trials;

challenges or delays in obtaining regulatory authorization for our product candidates, including our updated vaccine in time for the 2024-2025 vaccination season or for future COVID-19 variant strain changes, our CIC vaccine candidate and our stand-alone influenza vaccine candidate;

challenges or delays in conducting clinical trials or studies for our product candidates;

challenges or delays in obtaining regulatory authorization for our product candidates, including for future COVID-19 variant strain changes, our COVID-19-Influenza (“CIC”) vaccine candidate, our stand-alone influenza vaccine candidate or other product candidates;

manufacturing, distribution or export delays or challenges;

our substantial dependence on Serum Institute of India Pvt.

(“SII”) and Serum Life Sciences Limited (“SLS” and together with SII, “Serum”) for co-formulation and filling, and PCI Pharma Services for finishing our COVID-19 Vaccine and the impact of any delays or disruptions in their operations on the delivery of customer orders;

(“SII”) and Serum Life Sciences Limited (“SLS” and together with SII, “Serum”) for co-formulation and filling our COVID-19 Vaccine and the impact of any delays or disruptions in their operations;

difficulty obtaining scarce raw materials and supplies, including for our proprietary adjuvant;

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our ability to timely deliver doses;

challenges in obtaining commercial adoption and market acceptance of our COVID-19 Vaccine or any COVID-19 variant strain containing formulation;

challenges meeting contractual requirements under agreements with multiple commercial, governmental, and other entities including requirements

to deliver doses that may require us to refund portions of upfront and other payments previously received or result in reduced future payments pursuant to such agreements;

challenges in obtaining commercial adoption and market acceptance of our COVID-19 Vaccine or any COVID-19 variant strain containing formulation, or our CIC vaccine candidates, stand-alone influenza vaccine candidates or other candidates;

challenges meeting contractual requirements under

agreements with multiple commercial, governmental, and other entities including requirements to deliver doses that may require us to refund portions of upfront and other payments previously received or result in reduced future payments pursuant to such agreements;

challenges related to the seasonality of vaccinations against COVID-19;

challenges related to the demand for vaccinations against COVID-19;

and other risks and uncertainties identified in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, Part II, Item 1A.

“Risk Factors” of our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 and this Quarterly Report on Form 10-Q, which may be detailed and modified or updated in other documents filed with the SEC from time to time, and are available at www.sec.gov and at www.novavax.com.

challenges related to the demand for vaccinations against COVID-19 or influenza;

challenges in identifying and successfully pursuing innovation expansion opportunities;

our expectation as to expenses and cash needs may prove not to be correct for reasons such as changes in plans or actual events being different than our assumptions and other risks and uncertainties identified in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, Part II, Item 1A “Risk Factors” of our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, Part II, Item 1A “Risk Factors” of our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024 and this Quarterly Report on Form 10-Q, which may be detailed and modified or updated in other documents filed with the SEC from time to time, and are available at www.sec.gov and at www.novavax.com.

You are encouraged to read these filings as they are made.

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Any non-GAAP financial measures presented are not, and should not be viewed as, substitutes for financial measures required by GAAP, have no standardized meaning prescribed by GAAP, and may not be comparable to the calculation of similar measures of other companies.

We are a global company advancing protein-based vaccines with our Matrix-M TM adjuvant.

We are a global company focused on driving value via our 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.

We continue to evolve our operating model to leverage four key drivers of value:

a partnership with Sanofi announced in May 2024, a late-stage pipeline focuses on our CIC and standalone influenza vaccine candidates, leveraging our Matrix-M technology, and a new early-stage pipeline.

Our proprietary recombinant technology platform harnesses the power and speed of genetic engineering to efficiently produce highly immunogenic nanoparticle vaccines designed to address global health needs.

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Our vaccine candidates also incorporate our proprietary saponin-based Matrix-M™ adjuvant to enhance the immune response, stimulate higher levels of functional antibodies, and induce a cellular immune response.

We have developed an updated vaccine for individuals aged 12 and older for the upcoming 2024-2025 vaccination season and are seeking authorization of our updated vaccine globally.

We submitted an amendment to our previously granted October 2023 Emergency Use Authorization (“EUA”) to the U.S.

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

These submissions follow the guidance from the U.S.

FDA, EMA, the World Health Organization (“WHO”), and the National Advisory Committee on Immunization on the use of the JN.1 lineage strain for the updated formulation.

We intend to ship our updated vaccine upon authorization in these markets.

We have developed and manufactured our updated vaccine for the 2024-2025 vaccination season for use in individuals aged 12 and older.

Our updated vaccine received Emergency Use Authorization (“EUA”) from the U.S.

FDA in August 2024, Marketing Authorization in the European Union (“EU”) in September 2024 and approval from the Taiwan Food and Drug Administration in October 2024.

In the U.S., we were notified by the U.S.

FDA that our BLA for our prototype vaccine and for NVX-CoV2601 was accepted for review with an action date of April 2025.

FDA that our BLA for our prototype vaccine and for NVX-CoV2601 was accepted for review with a Prescription Drug User Fee Act (“PDUFA”) date of April 2025.

In May 2024, we entered into the Sanofi CLA with Sanofi, to co-commercialize our COVID-19 Vaccine, including future updated versions that address seasonal COVID-19 variants.

We will continue commercialization of our updated vaccine.

We will continue commercialization of our updated vaccine for the 2024-2025 vaccination season.

Beginning in 2025 and continuing during the term of the Sanofi CLA, we and Sanofi will commercialize the COVID-19 Vaccine worldwide in accordance with a commercialization plan agreed by us and Sanofi, under which we will continue to supply its existing APA customers and strategic partners, including Takeda and SII.

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This partnership provides the opportunity for us to focus more on research and development and pipeline expansion.

We discuss this agreement in further detail in Note 6 to our consolidated financial statements.

Additionally, our near-term focus is on developing a CIC vaccine candidate, as well as a stand-alone seasonal influenza vaccine candidate, and we are on track to initiate a Phase 3 trial in the fourth quarter of 2024 for both vaccine candidates.

We discuss this agreement in further detail in Note 6 to our accompanying unaudited consolidated financial statements.

Additionally, our near-term focus is on developing a CIC vaccine candidate, as well as a stand-alone influenza vaccine candidate.

We intend to begin enrolling our Phase 3 immunogenicity trial as soon as possible.

We intend to explore opportunities to engage in strategic partnerships to advance the candidates to a BLA filing and commercialization.

Furthermore, we provide our Matrix-M™ adjuvant for collaborations, including in R21/Matrix-M™ adjuvant malaria vaccine, which is authorized in several countries, as well as other preclinical vaccine research with our Matrix-M™ adjuvant, including through a partnership with the Bill & Melinda Gates Medical Research Institute.

We intend to focus our organization to align our investments and activities with our top priorities of prioritizing the successful transition to our new partnership with Sanofi, executing our Phase 3 programs for the CIC and stand-alone seasonal influenza vaccine candidates, and delivering our updated vaccine.

We intend to focus our organization to align our investments and activities with our top priorities of prioritizing the successful transition to our new partnership with Sanofi, executing our Phase 3 programs for the CIC and stand-alone influenza vaccine candidates, and delivering our updated vaccine.

To maximize our opportunities and mitigate the significant risks and uncertainties of the COVID-19 market, we have progressed our cost restructuring measures to reduce spend, extend our cash runway, and operate efficiently to seek the best position for us to deliver longer-term growth.

We discuss these cost restructuring strategies in greater detail in Note 2 to our consolidated financial statements.

We discuss these cost restructuring strategies in greater detail in Note 15 to our accompanying unaudited consolidated financial statements.

Technology Overview

We believe our recombinant nanoparticle vaccine technology and our proprietary Matrix-M™ adjuvant are well suited for the development and commercialization of vaccine candidates targeting a broad scope of respiratory and other endemic and emerging infectious diseases.

We believe our recombinant nanoparticle vaccine technology and our proprietary Matrix-M™ adjuvant are well suited for the development and commercialization of vaccine candidates targeting areas both within and beyond the infectious disease space.

Recombinant Nanoparticle Vaccine Technology

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Matrix-M™ adjuvant is being evaluated in combination with several partner-led malaria vaccine candidates, including for R21/Matrix-M™ adjuvant, a malaria vaccine candidate created by the Jenner Institute, University of Oxford.

The R21/Matrix-M™ adjuvant vaccine has been licensed to SII for commercialization, and in December 2023, received prequalification by the WHO.

The R21/Matrix-M™ adjuvant vaccine has been licensed to SII for commercialization, and in December

2023, received prequalification by the World Health Organization (“WHO”).

In July 2024, first commercial doses of the R21/Matrix-M™ adjuvant malaria vaccine were administered to children in Cote d’Ivoire and South Sudan.

Additionally, in May 2023, we entered into a three-

year agreement with the Bill & Melinda Gates Medical Research Institute to provide our Matrix-M™ adjuvant for use in preclinical vaccine research.

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

In June 2023, we signed a material transfer agreement with SK bioscience Co., Ltd.

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COVID-19 Vaccine Regulatory and Licensure

For our updated vaccine for the 2024-2025 vaccination season, we submitted an amendment to our previously granted October 2023 EUA to the U.S.

FDA, filed for a type II variation of our existing MA with the EMA, and the UK’s MHRA, and filed for authorization with Health Canada.

FDA grants an amended EUA for our updated vaccine, we expect that initial stocking orders of our updated vaccine will be available for shipment in pre-filled syringes to customers.

In the European Union, we intend to have our updated vaccine available for distribution in unit-dose vials for immediate release post-approval.

Additionally, in the U.K., we intend to have our updated vaccine available on the private market and in Canada, in five-dose vials for immediate release post-authorization should Canadian public health programs choose to provide the option for five-dose vials.

For our updated vaccine for the 2024-2025 vaccination season, in August 2024, we received EUA from the U.S.

FDA for active immunization to prevent COVID-19 in individuals aged 12 and older.

Our updated vaccine is included in the recommendations issued by the U.S.

Centers for Disease Control and Prevention in June 2024.

In October 2024, we were granted Marketing Authorization by the European Commission for our updated vaccine for use in individuals aged 12 and older for the prevention of COVID-19 in the EU.

This decision followed the positive opinion from the Committee for Medicinal Products for Human Use of the European Medicines Agency (“EMA”).

Additionally, in October 2024, we received approval by the Taiwan Food and Drug Administration for our updated vaccine for use in individuals aged 12 and older.

We are working to continue to expand our label for primary and re-vaccination in younger children, and to achieve supportive policy recommendations enabling broad market access.

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Our COVID-19 vaccine, partnered with Sanofi, is our most advanced product.

We are seeking authorization of our 2024-2025 formulated JN.1 COVID vaccine globally.

We will continue to commercialize our JN.1 COVID vaccine through the end of the 2024-2025 vaccination season.

Beyond our COVID-19 vaccine, our clinical pipeline includes a CIC vaccine candidate and a stand-alone seasonal influenza vaccine candidate in addition to our Matrix-M™ adjuvant being used for collaboration in R21/Matrix-M™ adjuvant malaria vaccine.

Novavax continues to optimize preclinical candidates, including an RSV vaccine and a new approach to H5N1 pandemic bird flu vaccination.

In addition, we are seeking to expand our core technology to new targets and novel applications including mucosal vaccination and high-density nanoparticles.

We continue to evaluate the potential of Matrix-M™ to augment immune responses to new and existing vaccines, including marketed products.

We are conducting a prioritization review of our preclinical candidates to inform future early-stage clinical study investments to advance Novavax’s product pipeline.

Beyond our COVID-19 vaccine, our clinical pipeline includes a CIC vaccine candidate and a stand-alone influenza vaccine candidate.

Additionally, we intend to develop an early-stage pipeline based on our proven technology platform, moving forward with pandemic influenza and respiratory syncytial virus (“RSV”) combinations.

Beyond our own pipeline, our Matrix-M™ adjuvant is being used for collaboration in R21/Matrix-M™ adjuvant malaria vaccine as well as, licensing rights to Sanofi for development of vaccines using our Matrix-M™ adjuvant or in combination with our existing COVID-19 product.

(1) Authorized in select geographies under trade names Novavax COVID-19 Vaccine, Adjuvanted;

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Coronavirus Vaccine Clinical Development

We continue to work on our efforts to expand our COVID-19 vaccine label within the adolescent and pediatric indications.

We continue efforts to expand our COVID-19 vaccine label within the adolescent and pediatric indications.

Additionally, we continue to evaluate vaccine safety, immunogenicity, and effectiveness through ongoing clinical trials and collaborative evidence-generating real-world studies.

Phase 3 Strain-Change and Re-vaccination Studies

In November 2023, we fully enrolled 338 adults aged 18 and older in Part 2 of the study which will evaluate the immunogenicity of a single dose of NVX-CoV2601 in previously unvaccinated individuals.

In October 2024, we initiated and fully enrolled Study 315 to evaluate safety and immunogenicity of a single dose of the JN.1 subvariant vaccine NVX-CoV2705 in previously vaccinated adults.

Topline data is expected in the first quarter of 2025 and is expected to support regulatory submissions in the U.S.

and other territories for this and future variant strain formulations.

In July 2024, we locked the database for 338 participants aged 18 and older in Part 2 of the Study 313, which will evaluate the immunogenicity of a single dose of the XBB.1.5 subvariant vaccine NVX-CoV2601 in previously unvaccinated individuals.

Data from Study 313 are intended to support BLA supplements and similar regulatory submissions in other territories for future variant strain formulations.

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The trial completed enrollment in September 2023 and includes three age de-escalation cohorts of 1,200 children each.

In consultation with the U.S.

FDA, the filing strategy includes filing a supplemental BLA for these cohorts once the initial BLA is approved.

In previous consultations with the U.S.

FDA, the filing strategy included filing a supplemental BLA for children in these age cohorts once the initial BLA is approved.

We are in discussion with the U.S.

FDA regarding additional analyses in light of the progressive increase in the number of children with baseline COVID-19 natural immunity during the enrollment period, which began in August 2022.

Therefore, we do not anticipate authorization for these age groups for the 2024-2025 vaccination season.

FDA regarding additional immunogenicity studies in light of the progressive increase in the number of children with baseline COVID-19 natural immunity during the enrollment period, which began in August 2022.

COVID-Influenza Combination and Stand-alone Influenza Program

For our CIC vaccine candidate, we continue to interact with the U.S.

FDA as part of the pre-investigational new drug application (“IND”) process and incorporate their recommendations into the Phase 3 design, study endpoints, comparators, and size of licensure enabling safety database.

We previously disclosed our plan to modify the study to include a stand-alone influenza vaccine comparative component.

We remain on track to initiate the study in the fourth quarter of 2024.

While our focus remains on the combination product, our development plans will maintain optionality to advance our stand-alone seasonal influenza vaccine, as described above, creating a pathway to potentially seek licensure.

For our stand-alone seasonal influenza vaccine, we have generated positive data through our previous Phase 2 and Phase 3 trials.

We expect to confirm and expand on these findings in the newly planned Phase 3 trial.

We continue to believe this asset may also be attractive from a pandemic preparedness perspective and that similar performance in terms of comparative immunogenicity may be expected for A/H5N1 pandemic strains.

In October 2024, the U.S.

FDA placed a clinical hold on the Investigational New Drug (“IND”) for our CIC and stand-alone influenza vaccine candidates.

FDA’s clinical hold resulted from a spontaneous report of a serious adverse event in a participant who received the CIC vaccine in a Phase 2 trial that completed in 2023.

FDA had requested additional information on this event, initially reported as motor neuropathy.

The additional information included a change in the event term to amyotrophic lateral sclerosis, a condition that is not known to be immune-mediated or associated with vaccination, which in this event was assessed as not related to vaccination.

In November 2024, the U.S.

FDA removed the clinical hold on the IND for our CIC and stand-alone influenza vaccine candidates following the determination that we satisfactorily addressed all clinical hold issues.

The information provided to the FDA supported our assessment that the serious adverse event was not related to our vaccine.

We intend to begin enrolling our Phase 3 immunogenicity trial as soon as possible.

We continue to invest in development of our pipeline that uses our recombinant nanoparticle technology platform and Matrix-M adjuvant.

We continue to believe these assets are key value drivers and intend to partner these assets towards a BLA filing.

In addition, they may also be attractive from a pandemic preparedness perspective, and similar performance in terms of comparative immunogenicity may be expected for influenza pandemic strains.

High-dose COVID-19 Vaccine Study

In October 2023, we completed enrollment in a Phase 2 trial to evaluate our high-dose COVID-19 vaccine for annual vaccination in 994 adults ages 50 years and older.

In August 2024, we locked the database for a Phase 2 trial to evaluate our high-dose COVID-19 vaccine for annual vaccination in 994 adults ages 50 years and older.

The trial measured immunogenicity levels of 5 micrograms of NVX-CoV2373 and of 5 micrograms, 35 micrograms, and 50 micrograms of NVX-CoV2601 matched with different levels of Matrix-M TM adjuvant.

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Business Highlights

We have taken steps to enable a successful operationalization of the collaboration and license agreement (the Sanofi Agreement) with Sanofi.

• Effective January 1, 2025, Sanofi will assume primary commercial responsibility for our updated 2024-2025 formula COVID-19 vaccine (NVX-CoV2705) in the U.S., Europe and select major markets not currently subject to our APAs or existing partnership agreements.

• Received $500 million upfront payment and an approximately $70 million equity investment from Sanofi

• We are eligible to receive up to $700 million in development, regulatory and launch milestones for activities related to commercializing Nuvaxovid™ and advancing Sanofi’s flu-COVID-19 combination vaccine candidate plus royalties.

In addition, we are eligible to receive royalties associated with any other Nuvaxovid™ combination vaccine Sanofi chooses to develop.

• For each additional Sanofi vaccine product developed under the non-exclusive license with our Matrix-M™ adjuvant technology, we are eligible to receive additional launch and sales milestones of up to $210 million per product plus ongoing product royalties.

We continued to leverage our technology platform to drive value creation.

• On track to initiate the Phase 3 immunogenicity trial for both CIC and stand-alone influenza vaccine candidates in the fourth quarter of 2024, with data expected by mid-2025.

• Conducting pipeline prioritization activities to determine our lead portfolio programs.

We continued to progress our cost reduction program to create a more lean and agile organization and accelerate its focus on Research and Development (“R&D”).

• On track with global restructuring and cost reduction plan with an approximately 34% reduction in combined R&D and Selling, General and Administrative (“SG&A”) expenses in the second quarter of 2024 compared to the same period for 2023.

• Prepared to initiate an additional cost reduction program to reduce R&D plus SG&A expenses, with a portion of expenses to be reimbursed by Sanofi under the Sanofi Agreement.

We plan to continue assessing existing capabilities to further refine the shape, size and scope of its organization this year and into 2025.

We expect to deliver our updated 2024-2025 formula COVID-19 vaccine to the market by the start of the season.

• Submitted an EUA amendment to the U.S.

• Advanced manufacturing of pre-filled syringe presentation of updated 2024-2025 formula COVID-19 vaccine following FDA strain selection guidance.

Expect doses will be ready to ship upon receipt of EUA.

FDA accepted the BLA for our COVID-19 vaccine with a Prescription Drug User Fee Act date of April 2025.

• Advanced retail pharmacy contract negotiations to enhance access for the 2024-2025 vaccination season.

Successful Execution of Sanofi Partnership

• Advanced preparation for Sanofi to assume lead commercial responsibility of Nuvaxovid™ COVID-19 vaccine for 2025-2026 vaccination season in the U.S., Europe and select major markets not currently subject to our APAs or existing partnership agreements.

• On track for our pediatric clinical trial database lock for the first cohort in the fourth quarter of 2024, achievement triggers a $50 million milestone payment.

Drive Incremental Value from our Proven Technology Platform

• In November 2024, the U.S.

FDA removed the clinical hold on our IND application for our CIC and stand-alone influenza vaccine candidates.

We are working to initiate the Phase 3 immunogenicity clinical trial for CIC and stand-alone influenza candidates as soon as possible.

• Signed a Matrix-M™ adjuvant related agreement with a leading pharmaceutical company to enable exploration of our technology for the potential advancement of their pipeline candidates.

• Outlined guiding principles of new Research & Development (“R&D”) strategy based on its proven technology platform and announced the appointment of Ruxandra Draghia-Akli, MD, PhD as Executive Vice President and Head

• Continued to advance pandemic influenza and RSV pre-clinical programs towards IND readiness, with a focus on RSV-combination options.

Continue Evolution of our Company and Reduce Operating Expenses

• On track with cost structure improvements, including an approximate 26% reduction in combined R&D and Selling, General and Administrative expenses in the third quarter of 2024 compared to the same period for 2023.

Deliver an Updated COVID-19 Vaccine for the 2024-2025 Vaccination Season

• Received EUA from the U.S.

FDA in individuals aged 12 and older.

• Entered the market with an improved product presentation and broader access - Nuvaxovid™ available in pre-filled syringe presentation in over 30,000 locations across major pharmacy retailers and regional grocers in the U.S.

• Our COVID-19 vaccine BLA PDUFA with an action date of April 2025 and updated to include both JN.1 variant and pre-filled syringe presentation.

Achievement of BLA approval triggers a $175 million milestone payment from Sanofi.

Global Markets:

• For 2024, made decision to conduct lean and targeted commercial launch in Europe in select key countries including Germany, Italy and Poland.

• Submitted marketing authorization amendments to the EMA and expect doses will be ready to ship upon receipt of market authorization.

• Received global authorizations including in the European Union, Canada, and Taiwan.

Sales of Common Stock

In August 2023, we entered into an At Market Issuance Sales Agreement (the “August 2023 Sales Agreement”), which allows us to issue and sell up to $500 million in gross proceeds of shares of its common stock, and terminated our 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, we sold 12.2 million shares of our 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, we sold 7.9 million shares of our common stock under our June 2021 Sales Agreement resulting in net proceeds of approximately $68 million, of which $6.0 million was included in prepaid expenses and other current assets as of June 30, 2023 and received in cash in July 2023.

In May 2024, we also entered into a securities subscription agreement (the “Subscription Agreement”) with Sanofi, pursuant to which we sold and issued to Sanofi, in a private placement, 6,880,481 shares of our common stock, par value $0.01 per share at a price of $10.00 per share for aggregate gross proceeds to us of $68.8 million.

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

In August 2023, we entered into an At Market Issuance Sales Agreement (the “August 2023 Sales Agreement”), which allows us to issue and sell up to $500 million in gross proceeds of shares of our common stock, and terminated our then-existing At Market Issuance Sales agreement entered into in June 2021 (the “June 2021 Sales Agreement”).

During the nine months ended September 30, 2024, we sold 12.2 million shares of our common stock under the 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, we sold 25.7 million shares of our common stock under our June 2021 Sales Agreement and August 2023 Sales Agreement resulting in net proceeds of approximately $211 million.

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

In May 2024, we also entered into a securities subscription agreement (the “Subscription Agreement”) with Sanofi, pursuant to which we sold and issued to Sanofi, in a private placement, 6.9 million shares of our common stock at a price of $10.00 per share for aggregate gross proceeds to us of $68.8 million.

In August 2023, we entered into a Securities Subscription Agreement with SK, pursuant to which the we agreed to sell and issue to SK 6.5 million shares of our common stock at a price of $13.00 per share (the “SK Shares”) in a private placement (the “Private Placement”) for aggregate gross proceeds of approximately $84.5 million .

We 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.

Critical Accounting Policies and Use of Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements (unaudited) and the accompanying notes, which have been prepared in accordance with generally accepted accounting principles in the United States.

The discussion and analysis of our financial condition and results of operations are based upon our accompanying unaudited financial statements and the unaudited accompanying notes, which have been prepared in accordance with generally accepted accounting principles in the United States.

The preparation of our consolidated financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, and equity and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Our critical accounting policies and estimates are included under Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC and are updated below to incorporate revenue recognition from licensing and transition services included in Licensing, royalties and other in our consolidated financial statements.

included in Licensing, royalties and other in our accompanying unaudited consolidated financial statements.

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 distinct performance obligation arrangements, we allocate 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, we consider discounted, probability-weighted cash flows related to the performance obligation transferred.

For multiple distinct performance obligation arrangements, we allocate 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, we consider discounted, probability-weighted cash flows related to the performance obligation transferred.

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

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Changes in estimates related to the process are recognized in the period when such changes are made on a cumulative catch-up basis.

We have not experienced any material difference as a result of change in estimate arising from this process.

We have not experienced any material adjustments as a result of changes in estimates arising from this process.

Recent Accounting Pronouncements Not Yet Adopted

See “Note 2―Summary of Significant Accounting Policies” included in our Notes to Consolidated Financial Statements (under the caption “ Recent Accounting Pronouncements ”).

See “Note 2―Summary of Significant Accounting Policies” included in our Notes to Consolidated Financial Statements (Unaudited) (under the caption “ Recent Accounting Pronouncements ”).

Results of Operations

The following is a discussion of the historical financial condition and results of our operations that should be read in conjunction with the unaudited consolidated financial statements and notes set forth in this Quarterly Report.

Three Months Ended June 30, 2024 and 2023

Three Months Ended June 30,

Three Months Ended September 30, 2024 and 2023

Three Months Ended September 30,

2024 2023 Change

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Total revenue $ 84,512 $ 186,986 $ (102,474)

Revenue for the three months ended June 30, 2024 was $415.5 million as compared to $424.4 million for the same period in 2023, an decrease of $8.9 million.

Revenue for the three months ended June 30, 2024 was primarily comprised of revenue from licensing and revenue from product sales of COVID-19 Vaccine.

Revenue for the three months ended June 30, 2023 was primarily comprised of product sales of COVID-19 Vaccine and services performed under our U.S.

government agreement with Advanced Technology International (“USG Agreement”), the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with the partnership formerly known as Operation Warp Speed.

The decrease in revenue is due to a decrease in the quantity of dose sales of COVID-19 Vaccine and a decrease in revenue under the USG Agreement during the three months ended June 30, 2024 because we recognized the full funding in revenue by the end of 2023, partially offset by additional licensing revenue from the Sanofi Collaboration and Licensing Agreement (“Sanofi CLA”).

Revenue for the three months ended September 30, 2024 was $84.5 million as compared to $187.0 million for the same period in 2023, a decrease of $102.5 million.

Revenue for the three months ended September 30, 2024 was primarily comprised of revenue from product sales of COVID-19 Vaccine and revenue from transition services and technology transfer under the Sanofi Collaboration and Licensing Agreement (“Sanofi CLA”).

Revenue for the three months ended September 30, 2023 was primarily comprised of services performed under our U.S.

government agreement with Advanced Technology

International (“USG Agreement”), the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with the partnership formerly known as Operation Warp Speed.

The decrease in revenue is primarily due to a decrease in revenue under the USG Agreement during the three months ended September 30, 2024 because we recognized the full contract funding in revenue by the end of 2023, partially offset by an increase in the quantity of dose sales of COVID-19 Vaccine and licensing, royalties, and other revenue from the Sanofi CLA.

Product sales

Product sales for the three months ended June 30, 2024 were $19.9 million as compared to $285.2 million during the three months ended June 30, 2023.

Product sales for the three months ended September 30, 2024 were $38.2 million as compared to $2.2 million during the three months ended September 30, 2023.

Our product sales related to revenue from commercial sales of COVID-19 Vaccine, which commenced in 2022.

The geographic distribution of product sales was as follows:

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

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Licensing, royalties, and other

Licensing, royalties, and other includes licensing payments, Transition Services revenue, and Technology Transfer revenue from the Sanofi CLA;

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

royalty milestone payments;

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and Matrix-M™ adjuvant sales.

Licensing, royalties, and other revenue during the three months ended June 30, 2024 was $395.6 million as compared to $2.2 million during the same period in 2023, an increase of $393.4 million.

The increase was primarily due to $386.3 million of licensing revenue from the Sanofi CLA, which represents the amount of the $500 million upfront payment recognized at a point-in-time.

The remaining amount of the upfront payment will be recognized in revenue as Transition Services and Technology Transfer are performed over time.

During the three months ended June 30, 2024, we recognized $6.6 million based on progress completed of Transition Services.

We did not have any Grant revenue during the three months ended June 30, 2024, as compared to $137.1 million during the same period in 2023, a decrease of $137.1 million.

Grant revenue comprised revenue for services performed under our USG Agreement.

Licensing, royalties, and other revenue during the three months ended September 30, 2024 was $46.3 million as compared to $19.8 million during the same period in 2023, an increase of $26.5 million.

The increase was primarily due to $32.7 million of revenue from transition services and technology transfer under the Sanofi CLA, partially offset by a decrease of Matrix-M™ adjuvant sales and sales-based royalties.

We did not have any Grant revenue during the three months ended September 30, 2024, as compared to $164.9 million during the same period in 2023, a decrease of $164.9 million.

Grant revenue for the three months ended September 30, 2023 was comprised of revenue for services performed under our USG Agreement.

As of December 31, 2023, we had recognized the full contract funding under the USG Agreement in revenue.

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

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Cost of Sales

Cost of sales was $46.2 million for the three months ended June 30, 2024, including expenses of $11.4 million related to excess, obsolete, or expired inventory and losses on certain firm purchase commitments, and $12.9 million related to unutilized manufacturing capacity.

Cost of sales was $55.8 million for the three months ended June 30, 2023, including expense of $19.8 million related to excess, obsolete, or expired inventory and losses on firm purchase commitments, partially offset by $17.9 million of negotiated reductions to certain previously recognized firm purchase commitments, and $11.4 million related to unutilized manufacturing capacity.

Cost of sales was $60.6 million for the three months ended September 30, 2024, including expenses of $6.2 million related to excess, obsolete, or expired inventory and losses on certain firm purchase commitments, $3.8 million ROU asset impairment charges for Contract Manufacturing Organization ("CMO") manufacturing capacity of excess quantities, $18.2 million related to unutilized manufacturing capacity, and a credit of $0.7 million related to certain negotiated reductions to previously recognized firm purchase commitments.

Cost of sales was $98.9 million for the three months ended September 30, 2023, including expense of $81.6 million related to excess, obsolete, or expired inventory and losses on firm purchase

commitments and $14.3 million related to unutilized manufacturing capacity, partially offset by $21.5 million of negotiated reductions to certain previously recognized firm purchase commitments.

Prior to receiving regulatory approval, we expensed manufacturing costs as research and development expenses.

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While we tracked the quantities of our manufactured vaccine product and components, we did not track pre-approval manufacturing costs and therefore the manufacturing cost of our pre-launch inventory produced prior to approval is not reasonably determinable.

During the three months ended June 30, 2024, we did not sell any pre-launch inventory.

If inventory sold for the three months ended June 30, 2023 was valued at expected standard cost, adjusted cost of sales for the period would have been approximately $71.7 million, an adjustment of $15.9 million.

If inventory sold for the three months ended September 30, 2024 was valued at expected standard cost, including expenses related to excess and obsolete inventory, adjusted cost of sales for the period would have been approximately $60.9 million, an adjustment of $0.3 million as compared to cost of sales recognized.

If inventory sold for the three months ended September 30, 2023 was valued at expected standard cost, adjusted cost of sales for the period would have been approximately $103.2 million, an adjustment of $4.3 million.

The cost of sales as a percentage of product sales may fluctuate in the future as a result of changes to our customer pricing mix or standard costs.

Research and Development Expenses

Research and development expenses were $106.9 million for the three months ended June 30, 2024 as compared to $219.5 million for the three months ended June 30, 2023, a decrease of $112.5 million.

Research and development expenses were $87.2 million for the three months ended September 30, 2024 as compared to $106.2 million for the three months ended September 30, 2023, a decrease of $19.1 million.

The decrease was primarily due to a reduction in overall expenditures relating to development activities on coronavirus vaccines, including our COVID-19 Program, and CIC, as summarized in the table below (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Coronavirus vaccines $ 21,798 $ 41,263

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Total research and development expenses $ 87,164 $ 106,229

Research and development expenses for coronavirus vaccines for the three months ended June 30, 2024 and 2023 decreased from $139.6 million to $40.8 million primarily as a result of a reduction in manufacturing and support costs due, in part, to a reduction in our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated

demand for, COVID-19 Vaccine, including embedded lease costs, under manufacturing supply agreements with Contract Manufacturing Organizations (“CMOs”) and contract manufacturing and development organizations (“CDMOs”).

Research and development expenses for coronavirus vaccines for the three months ended September 30, 2024 and 2023 decreased from $41.3 million to $21.8 million primarily as a result of a reduction in manufacturing and support costs due, in part, to a reduction in our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated demand for, COVID-19 Vaccine, including embedded lease costs, under manufacturing supply agreements with CMOs and contract manufacturing and development organizations (“CDMOs”).

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses were $101.3 million for the three months ended June 30, 2024 as compared to $93.7 million for the same period in 2023, an increase of $7.6 million.

Excluding the Sanofi transaction related costs of $29.5 million, the decrease in selling, general, and administrative expenses is primarily due to certain cost containment measures to reduce our operating spend.

For the remainder of 2024, we expect a reduction in our annual combined research and development, and selling, general, and administrative spend as a result of our Restructuring Plan as discussed in Note 16 to our consolidated financial statements.

Selling, general, and administrative expenses were $70.7 million for the three months ended September 30, 2024 as compared to $107.5 million for the same period in 2023, a decrease of $36.7 million.

The decrease in selling, general, and administrative expenses is primarily due to certain cost containment measures to reduce our operating spend.

Other Income (Expense)

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

Other income, net (in thousands):

Other income (expense), net (in thousands):

Interest expense $ (4,236) $ (2,859) $ (1,377)

Other income (expense)

15,922 (2,982) 18,904

Total other income, net

Total other income (expense), net

$ 11,686 $ (5,841) $ 17,527

Total other income, net was $3.6 million for the three months ended June 30, 2024 as compared to a total other income, net of $2.4 million for the same period in 2023.

The increase in other income, net is primarily due to additional interest income from higher Cash and cash equivalents and Marketable securities balances.

Income Tax Expense

During the three months ended June 30, 2024, we recognized an income tax expense of $2.2 million related to federal, state, and foreign income taxes.

During the three months ended June 30, 2023, we recognized an income tax benefit of $0.1 million related to federal, state, and foreign income taxes.

Three Months Ended June 30,

Total other income (expense), net was $11.7 million of income for the three months ended September 30, 2024 as compared to a total other income (expense), net of $5.8 million of expense for the same period in 2023.

The increase in other income (expense), net is primarily due to the favorable impact in 2024 as compared to 2023 of exchange rates on foreign currency denominated balances, including an intercompany loan with Novavax CZ, additional interest income from higher Cash and cash equivalents and Marketable securities balances, and a gain on insurance recoveries.

Income Tax Expense (Benefit)

During the three months ended September 30, 2024, we recognized an income tax benefit of $1.3 million related to federal, state, and foreign income taxes, partially offset by foreign withholding tax expense of $0.3 million.

During the three months ended September 30, 2023, we recognized an income tax benefit of $0.7 million related to federal, state, and foreign income taxes.

Three Months Ended September 30,

2024 2023 Change

Net Income (in thousands, except per share information):

Net Loss (in thousands, except per share information):

$ (121,300) $ (130,776) $ 9,476

Net income per share, basic

Net loss per share, basic and dilutive

$ (0.76) (1.26) $ 0.50

Net income per share, dilutive

Weighted average shares outstanding, basic and dilutive

160,049 103,429 56,620

Weighted average shares outstanding, basic 148,379 89,362 59,017

Weighted average shares outstanding, dilutive 165,855 104,065 61,790

Net income for the three months ended June 30, 2024 was $162.4 million, or $1.09 per share, basic, as compared to net income of $58.0 million, or $0.65 per share, basic, for the same period in 2023.

The increase in net income during the three months ended June 30, 2024, was primarily due to a decrease in research and development expenses.

The increase in weighted average shares outstanding for the three months ended June 30, 2024 was primarily a result of sales of our common stock.

Six Months Ended June 30, 2024 and 2023

Six Months Ended June 30,

Net loss for the three months ended September 30, 2024 was $121.3 million, or $0.76 per share, basic and dilutive, as compared to net loss of $130.8 million, or $1.26 per share, basic and dilutive, for the same period in 2023.

The increase in net loss during the three months ended September 30, 2024, was primarily due to a decrease in total revenue, partially offset by a decrease in total expenses.

The increase in weighted average shares outstanding for the three months ended September 30, 2024 was primarily a result of sales of our common stock.

Nine Months Ended September 30, 2024 and 2023

Nine Months Ended September 30,

2024 2023 Change

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Total revenue $ 593,851 $ 692,363 $ (98,512)

Revenue for the six months ended June 30, 2024 was $509.3 million as compared to $505.4 million for the same period in 2023, an increase of $4.0 million.

Revenue for the six months ended June 30, 2024 was primarily comprised of revenue from licensing and product sales of COVID-19 Vaccine.

Revenue for the six months ended June 30, 2023 was primarily comprised of revenue from product sales of COVID-19 Vaccine and services performed under our USG Agreement.

The increase in revenue is due to $392.9 million of licensing and other revenue from the Sanofi CLA, partially offset by a decrease in revenue under the USG Agreement and in the quantity of dose sales of COVID-19 Vaccine.

Revenue for the nine months ended September 30, 2024 was $593.9 million as compared to $692.4 million for the same period in 2023, a decrease of $98.5 million.

Revenue for the nine months ended September 30, 2024 was primarily comprised of revenue from licensing and product sales of COVID-19 Vaccine.

Revenue for the nine months ended September 30, 2023 was primarily comprised of revenue from product sales of COVID-19 Vaccine and services performed under our USG Agreement.

The decrease in revenue is due to a decrease in revenue under the USG Agreement and in the quantity of dose sales of COVID-19 Vaccine, partially offset by licensing, royalties, and other revenue from the Sanofi CLA.

Product sales

Product sales for the six months ended June 30, 2024 were $102.2 million as compared to $277.7 million during the six months ended June 30, 2023.

Product sales for the nine months ended September 30, 2024 were $140.4 million as compared to $279.9 million during the nine months ended September 30, 2023.

Our product sales related to revenue from commercial sales of COVID-19 Vaccine, which commenced in 2022.

Our product sales primarily related to sales of COVID-19 Vaccine under our APA agreements.

Our product sales primarily related to sales of COVID-19 Vaccine under our APA

The geographic distribution of product sales was as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

North America

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$ 140,438 $ 279,937 $ (139,499)

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 wholesaler acquisition costs (“WAC”), primarily due to wholesale distributor fees for shipments expected to be returned and adjustments made to estimated returns of prior period product sales.

Licensing, royalties, and other

Licensing, royalties, and other includes licensing payments, Transition Services revenue, and Technology Transfer revenue from the Sanofi CLA;

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

royalty milestone payments;

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and Matrix-M™ adjuvant sales.

Licensing, royalties, and other revenue during the six months ended June 30, 2024 was $407.1 million as compared to $3.2 million during the same period in 2023, an increase of $403.9 million.

Licensing, royalties, and other revenue during the nine months ended September 30, 2024 was $453.4 million as compared to $23.0 million during the same period in 2023, an increase of $430.4 million.

The increase was primarily due to $389.6 million of licensing revenue from the Sanofi CLA, which represents the amount of the $500 million upfront payment recognized at a point-in-time.

The remaining amount of the upfront payment will be recognized in revenue as transition services and technology transfer are performed over time.

During the six months ended June 30, 2024, we recognized $6.6 million based on progress completed of Transition Services.

We did not have any Grant revenue during the six months ended June 30, 2024 as compared to $224.5 million during the same period in 2023, a decrease of $224.5 million.

Grant revenue comprised revenue for services performed under our USG Agreement.

During the nine months ended September 30, 2024, we recognized $39.4 million of transition services and technology transfer revenue based on progress completed.

We did not have any Grant revenue during the nine months ended September 30, 2024 as compared to $389.4 million during the same period in 2023, a decrease of $389.4 million.

Grant revenue for the nine months ended September 30, 2023, was comprised of revenue for services performed under our USG Agreement.

As of December 31, 2023, we had recognized the full contract funding under the USG Agreement in revenue.

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

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Cost of Sales

Cost of sales was $105.5 million for the six months ended June 30, 2024, including expenses of $20.2 million related to excess, obsolete, or expired inventory and losses on certain firm purchase commitments, and $18.8 million related to unutilized manufacturing capacity.

Cost of sales was $89.9 million for the six months ended June 30, 2023, including expense of $40.0 million related to excess, obsolete, or expired inventory and losses on firm purchase commitments, and a credit of $18.8 million related to negotiated reductions to certain previously recognized firm purchase commitments, and $15.9 million related to unutilized manufacturing capacity.

Cost of sales was $166.1 million for the nine months ended September 30, 2024, including expenses of $26.4 million related to excess, obsolete, or expired inventory and losses on certain firm purchase commitments, $3.8 million ROU asset impairment charges for CMO manufacturing capacity of excess quantities, $37.1 million related to unutilized manufacturing capacity, and a credit of $0.7 million related to certain negotiated reductions to previously recognized firm purchase commitments.

Cost of sales was $188.8 million for the nine months ended September 30, 2023, including expense of $121.6 million related to excess, obsolete, or expired inventory and losses on firm purchase commitments, $30.1 million related to unutilized manufacturing capacity, and a credit of $40.3 million related to negotiated reductions to certain previously recognized firm purchase commitments.

Prior to receiving regulatory approval, we expensed manufacturing costs as research and development expenses.

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If inventory sold for the six months ended June 30, 2024 was valued at expected standard cost, including expenses related to excess and obsolete inventory, adjusted cost of sales for the period would have been approximately $107.1 million, an adjustment of $1.6 million as compared to cost of sales recognized.

If inventory sold for the six months ended June 30, 2023 was valued at expected standard cost, adjusted cost of sales for the period would have been approximately $120.8 million, an adjustment of $30.9 million.

If inventory sold for the nine months ended September 30, 2024 was valued at expected standard cost, including expenses related to excess and obsolete inventory, adjusted cost of sales for the period would have been approximately $167.9 million, an adjustment of $1.8 million as compared to cost of sales recognized.

If inventory sold for the nine months ended September 30, 2023 was valued at expected standard cost, adjusted cost of sales for the period would have been approximately $224 million, an adjustment of $35.2 million.

The cost of sales as a percentage of product sales may fluctuate in the future as a result of changes to our customer pricing mix or standard costs.

Research and Development Expenses

Research and development expenses decreased to $199.6 million for the six months ended June 30, 2024 from $466.6 million for the same period in 2023, a decrease of $267.0 million.

Research and development expenses decreased to $286.8 million for the nine months ended September 30, 2024 from $572.8 million for the same period in 2023, a decrease of $286.0 million.

Six Months Ended June 30,

Nine Months Ended September 30,

Coronavirus vaccines $ 87,759 $ 321,132

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Total research and development expenses $ 286,789 $ 572,805

Research and development expenses for coronavirus vaccines for the six months ended June 30, 2024 and 2023 decreased from $279.9 million to $66.0 million primarily as a result of a reduction in manufacturing and support costs due, in part, to a reduction in our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated demand for, COVID-19 Vaccine, including embedded lease costs, under manufacturing supply agreements with CMOs and CDMOs.

The decrease was also due to a benefit of $26.6 million for the six months ended June 30, 2024 resulting from the Confidential Settlement Agreement and Release agreement entered into with Fujifilm resulting in a reduction to previously recorded expense (see Note 6 to our consolidated financial statements).

Research and development expenses for coronavirus vaccines for the nine months ended September 30, 2024 and 2023 decreased from $321.1 million to $87.8 million primarily as a result of a reduction in manufacturing and support costs due, in part, to a reduction in our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated demand for, COVID-19 Vaccine, including embedded lease costs, under manufacturing supply agreements with CMOs and CDMOs.

The decrease was also due to a benefit of $26.6 million for the nine months ended September 30, 2024 resulting from the Confidential Settlement Agreement and Release agreement entered into with Fujifilm resulting in a reduction to previously recorded expense (see Note 6 to our accompanying unaudited consolidated financial statements).

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses decreased to $188.1 million for the six months ended June 30, 2024 from $206.2 million for the same period in 2023, a decrease of $18.2 million.

Selling, general, and administrative expenses decreased to $258.8 million for the nine months ended September 30, 2024 from $313.7 million for the same period in 2023, a decrease of $54.9 million.

Excluding the Sanofi transaction related costs of $31.7 million, the decrease in selling, general, and administrative expenses is primarily due to certain cost containment measures to reduce our operating spend.

Six Months Ended June 30,

Other income, net (in thousands):

consolidated financial statements.

Other Income (Expense)

Nine Months Ended September 30,

Other income (expense), net (in thousands):

Interest expense $ (12,490) $ (10,299) $ (2,191)

27,307 26,912 395

Total other income, net

Total other income (expense), net

$ 14,817 $ 16,613 $ (1,796)

Total other income, net for the six months ended June 30, 2024 was $3.1 million as compared to $22.5 million for the same period in 2023.

This is primarily due to a decrease in Other income as a result of the unfavorable impact in 2024 as compared to 2023 of exchange rates on foreign currency denominated balances, including an intercompany loan with Novavax CZ.

Total other income (expense), net for the nine months ended September 30, 2024 was $14.8 million of income as compared to $16.6 million of income for the same period in 2023, a decrease of $1.8 million.

Income Tax Expense

During the six months ended June 30, 2024, we recognized an income tax expense of $4.5 million related to federal, state, and foreign income taxes.

During the six months ended June 30, 2023, we recognized an income tax expense of $1.0 million related to federal, state, and foreign income taxes.

Net Income (Loss)

Six Months Ended June 30,

During the nine months ended September 30, 2024, we recognized an income tax expense of $3.4 million related to federal, state, and foreign income taxes and foreign withholding taxes.

During the nine months ended September 30, 2023, we recognized an income tax expense of $0.3 million related to federal, state, and foreign income taxes.

Nine Months Ended September 30,

2024 2023 Change

Net Income (Loss) (in thousands, except per share information):

Net Income (Loss)

Net Loss (in thousands, except per share information):

$ (106,469) $ (366,673) $ 260,204

Net Income (Loss) per share, basic

Net Loss per share, basic and dilutive

$ (0.71) $ (3.94) $ 3.23

Net Income (Loss) per share, dilutive

Weighted average shares outstanding, basic and dilutive

149,486 93,046 56,440

Weighted average shares outstanding, basic 144,147 87,769 56,378

Weighted average shares outstanding, dilutive 145,121 87,769 57,352

Net income for the six months ended June 30, 2024 was $14.8 million, or $0.10 per share, basic, as compared to Net loss of $235.9 million, or $2.69 per share, basic, for the same period in 2023.

The increase in net income during the six months ended June 30, 2024, was primarily due to a decrease in research and development expenses.

The increase in weighted average shares outstanding for the six months ended June 30, 2024 is primarily a result of sales of our common stock.

Net loss for the nine months ended September 30, 2024 was $106.5 million, or $0.71 per share, basic and dilutive, as compared to net loss of $366.7 million, or $3.94 per share, basic and dilutive, for the same period in 2023.

The decrease in net loss during the nine months ended September 30, 2024, was primarily due to a decrease in research and development expenses.

The increase in weighted average shares outstanding for the nine months ended September 30, 2024 is primarily a result of sales of our common stock.

Liquidity Matters and Capital Resources

Our future capital requirements depend on numerous factors including, but not limited to, revenue from our product sales, milestone payments, royalties and reimbursements under licensing arrangements with our strategic partners;

our projected activities related to the development and commercial support of our COVID-19 Vaccine and our CIC vaccine candidate, including significant commitments under various clinical research organizations, CMO, and CDMO agreements;

our projected activities related to the development and commercial support of our COVID-19 Vaccine and our CIC and stand-alone influenza vaccine candidates, including significant commitments under various clinical research organizations, CMO, and CDMO agreements;

the progress of preclinical studies and clinical trials;

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and other manufacturing, sales, and distribution costs.

We plan to continue developing other vaccines and product candidates, such as our potential combination vaccines candidates, which are in various stages of development.

Our ability to generate revenue from product sales is subject

to uncertainty specifically as it relates to our ability to successfully develop, manufacture, distribute, and market our updated vaccine and to successfully execute on our APAs, as discussed below.

Additionally, our plans include our ongoing restructuring and cost reduction measures (see Note 16 to the consolidated financial statements), and may also include raising additional capital through a combination of additional equity and debt financing, collaborations, strategic alliances, asset sales, and marketing, distribution, or licensing arrangements.

We plan to continue developing other vaccines and product candidates, such as our potential combination vaccine candidates, which are in various stages of development.

Our ability to generate revenue from product sales is subject to uncertainty specifically as it relates to our ability to successfully develop, manufacture, distribute, and market our updated vaccine and to successfully execute on our APAs, as discussed below.

Additionally, our plans include our ongoing restructuring and cost reduction measures (see Note 15 to our accompanying unaudited consolidated financial statements), and may also include raising additional capital through a combination of additional equity and debt financing, collaborations, strategic alliances, asset sales, and marketing, distribution, or licensing arrangements.

New financings may not be available to us on commercially acceptable terms, or at all.

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Upon completion of the existing APAs, we and Sanofi will jointly agree on commercialization activities of each party in each jurisdiction.

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

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

We have also entered into supply agreements, sometimes referred to as APAs, with the EC and various countries globally.

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 under the licensing agreements, was approximately $2 billion, of which $1.2 billion is included in Deferred revenue on our consolidated balance sheet.

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

We have also entered into supply agreements, sometimes referred to as APAs, with various countries globally.

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 under the licensing agreements, was approximately $1.3 billion, of which $1.1 billion is included in Deferred revenue on our consolidated balance sheet.

Failure to timely meet regulatory milestones, obtain timely supportive recommendations from governmental advisory committees, or achieve product volume or delivery timing obligations under our APAs may require us to refund portions of upfront or other payments or result in reduced future payments, which could adversely impact our ability to realize revenue from our unsatisfied performance obligations.

The timing to fulfill performance obligations related to supply agreements will depend on timing of product manufacturing, receipt of marketing authorizations for additional indications, delivery of doses based on customer

demand, and the ability of the customer to request variant vaccine under certain of our APAs.

The supply agreements typically contain terms that include upfront payments intended to assist us in funding investments related to building out and operating our manufacturing and distribution network, among other expenses, in support of our global supply commitment, and are applied to billings upon delivery of COVID-19 Vaccine.

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Doses became available within the U.S.

at many major pharmacy retailers, following the Center for Biologics Evaluation and Research release of vaccine batches.

at many major pharmacy retailers, following the

Center for Biologics Evaluation and Research release of vaccine batches.

We have established reserves for gross-to-net deductions for amounts that we expect to return to our customers.

As of June 30, 2024, gross-to-net reserve balances were $54.6 million related to product returns and $0.9 million related to wholesale distributor fees, discounts, and chargebacks and was included in Accrued expenses on our consolidated balance sheet.

Pursuant to the Settlement Agreement with Fujifilm (see Note 6 to our consolidated financial statements), in March 2024, we paid $42.0 million to Fujifilm, the parties agreed to a mutual release of claims arising from, under or otherwise in connection with the prior confidential settlement agreement and release effective September 30, 2022, and Fujifilm agreed to dismiss its demand for arbitration with the Judicial Arbitration and Mediation Services (“JAMS”).

This payment is less than amounts previously recognized as embedded lease expense and reflected in Research and development expenses from Fujifilm manufacturing activity and accordingly, during the six months ended June 30, 2024, we recorded a benefit of $26.6 million as Research and development expenses.

As of September 30, 2024, gross-to-net reserve balances were $78.3 million related to product returns and $24.6 million related to wholesale distributor fees, discounts, and chargebacks and was included in Accrued expenses on our consolidated balance sheet.

Pursuant to the Settlement Agreement with Fujifilm (see Note 6 to our accompanying unaudited consolidated financial statements), in March 2024, we paid $42.0 million to Fujifilm, the parties agreed to a mutual release of claims arising from, under or otherwise in connection with the prior confidential settlement agreement and release effective September 30, 2022, and Fujifilm agreed to dismiss its demand for arbitration with the Judicial Arbitration and Mediation Services (“JAMS”).

This payment is less than amounts previously recognized as embedded lease expense and reflected in Research and development expenses from Fujifilm manufacturing activity and accordingly, during the nine months ended September 30, 2024, we recorded a benefit of $26.6 million as Research and development expenses.

We have an APA with the Commonwealth of Australia (“Australia”) for the purchase of doses of COVID-19 Vaccine (the “Australia APA”).

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As a result of the cancellation, the total contract value was reduced by $54.0 million, including $6.0 million of deferred revenue related to the cancelled doses that will be applied as a credit towards future deliveries of doses.

Australia is not required to purchase updated vaccine doses until we receive authorization from the Therapeutic Goods Administration (“TGA”).

Australia is not required to purchase updated vaccine doses until we receive authorization from Therapeutic Goods Administration (“TGA”).

We do not expect approval in time for product delivery in 2024 which could result in a loss or deferral of approximately $240 million of contract value.

We plan 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 our consolidated balance sheet.

If we are unable to satisfy our 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 our consolidated balance sheet.

If we are unable to satisfy our 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.

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 the APA in our consolidated balance sheet.

New Zealand has requested a refund of certain advanced payments and we are 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 .

Approximately $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 we are 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 our 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.

We responded to Pharmac in September 2024 indicating we do not believe Pharmac has the right to unilaterally terminate the contract or receive a refund of any part of the remaining upfront payment.

We have 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.

We do not anticipate achieving regulatory approval of our COVID-19 Vaccine using bulk antigen produced at BMC on or before December 31, 2024.

We do not expect to receive regulatory approval of our COVID-19 Vaccine using bulk antigen produced at BMC on or before December 31, 2024 .

Therefore, we plan 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 our 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 our 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.

assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020, between the parties (the “Original UK Supply Agreement”).

In September 2022, we entered into an Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (the “Amended and Restated UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020, between the parties (the “Original UK Supply Agreement”).

Under the terms of the Amended and Restated UK Supply Agreement, the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses (the “Conditional Doses”) of our prototype vaccine, with the number of Conditional Doses contingent on, and subject to reduction based on, our timely achievement of supportive recommendations from the Joint Committee on Vaccination and Immunisation (“JCVI”) that is approved by the UK Secretary of State for Health.

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As of November 30, 2023, the JCVI had not made a supportive recommendation with respect to the prototype vaccine, thereby triggering a reduction in the number of Conditional Doses from 7.5 million doses to zero.

As of August 2024, we are in discussions with the Authority regarding the treatment of the remaining upfront amount previously received of $112.5 million, which is reflected in Other current liabilities on our consolidated balance sheet.

In November 2024, we and 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 Supply Agreement by and between us and the Authority, 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, we and the Authority agreed to terminate the Amended and Restated Supply Agreement and to fully settle the outstanding amount under dispute related to upfront payments of $112.5 million, which is reflected in Other current liabilities on the consolidated balance sheet, previously received by us from the Authority under the Amended and Restated Supply Agreement.

Pursuant to the Settlement Agreement, we 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 we choose to accelerate payments.

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

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

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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.

We 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 revenue adjustment during the six months ended June 30, 2024.

As of June 30, 2024, the remaining amounts included on our consolidated balance sheet are classified as $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.

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

As of September 30, 2024, the remaining amounts included on our consolidated balance sheet are classified as $225.0 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, we and Gavi entered into a security agreement pursuant to which we granted Gavi a security interest in accounts receivable from SII under the SII R21 Agreement (see Note 6 to our accompanying unaudited consolidated financial statements), which will continue for the deferred payment term of the Gavi Settlement Agreement.

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

Our funding agreements currently include funding from the Coalition for Epidemic Preparedness Innovations (“CEPI”) in the form of one or more forgivable no interest term loans (“CEPI Forgivable Loan Funding”).

Payments received under the CEPI Forgivable Loan Funding are only repayable if project vaccine, as defined under the CEPI funding agreement, manufactured by the CMO network funded by CEPI is sold to one or more third parties (which could include sales credited

under the Gavi Settlement Agreement), and such sales cover our costs of manufacturing such vaccine, not including manufacturing costs funded by CEPI.

Payments received

under the CEPI Forgivable Loan Funding are only repayable if project vaccine, as defined under the CEPI funding agreement, manufactured by the CMO network funded by CEPI is sold to one or more third parties (which could include sales credited under the Gavi Settlement Agreement), and such sales cover our costs of manufacturing such vaccine, not including manufacturing costs funded by CEPI.

The timing and amount of any loan repayments is currently uncertain.

We continue to assess our manufacturing needs and modify our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated demand for, COVID-19 Vaccine, and in doing so recognize that significant costs may be incurred.

For the 2023-2024 vaccination season, we have depended exclusively on Serum for co-formulation and filling (other than in Europe), and PCI Pharma Services for finishing COVID-19 Vaccine in Europe.

For the 2024-2025 vaccination season, we are seeking to expand our supply chain network and introduce new single-dose vial or pre-filled syringe product presentations in certain markets.

For the 2023-2024 vaccination season, we depended exclusively on Serum for co-formulation and filling, and finishing.

For the 2024-2025 vaccination season, we expanded our supply chain network and introduced new single-dose vial and pre-filled syringe product presentations in certain markets.

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

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

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

We and SLS execute firm purchase orders to include specific quantities to be delivered under the SLS Supply Agreement.

Pursuant to the SLS Supply Agreement, SLS or its authorized manufacturer is responsible for obtaining and maintaining all necessary permits or other regulatory approvals to manufacture drug substance and drug product.

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Any delays or disruptions in these suppliers’ operations could prevent or delay the delivery of customer orders.

As of June 30, 2024, we had $1.1 billion in cash and cash equivalents, restricted cash and marketable securities as compared to $583.8 million as of December 31, 2023.

We funded our operations for the six months ended June 30, 2024 primarily with cash and cash equivalents, non-refundable upfront payment under the Sanofi CLA and Subscription Agreement, proceeds from the sale of securities under our August 2023 Sales Agreement, upfront payments under APAs, and revenue from product sales.

As of September 30, 2024, we had $924.5 million in cash and cash equivalents, restricted cash and marketable securities as compared to $583.8 million as of December 31, 2023.

We funded our operations for the nine months ended September 30, 2024 primarily with cash and cash equivalents, non-refundable upfront payment under the Sanofi CLA and Subscription Agreement, proceeds from the sale of securities under our August 2023 Sales Agreement, upfront payments under APAs, and revenue from product sales.

In May 2023, we announced our plan to restructure our global footprint to reduce our planned expenditures and in January 2024, we announced further reductions in our global workforce.

We anticipate our future operations to be funded primarily by milestone payments, royalties and transition services under our Sanofi CLA, revenue from product sales, our cash and cash equivalents and investments in marketable securities, and other potential funding sources including equity financings, which may include at the market offerings, debt financings, collaborations, strategic alliances, asset sales, and marketing, distribution or licensing arrangements.

The following table summarizes cash flows for the six months ended June 30, 2024 and 2023 (in thousands):

Six Months Ended June 30,

We anticipate our future operations to be funded primarily by milestone payments, royalties, transition services and technology transfer under our Sanofi CLA, revenue from product sales, our cash and cash equivalents and investments in marketable securities, and other potential funding sources including equity financings, which may include at the market offerings, debt financings, collaborations, strategic alliances, asset sales, and marketing, distribution or licensing arrangements.

The following table summarizes cash flows for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,

2024 2023 Change

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Cash, cash equivalents, and restricted cash at end of period $ 588,587 $ 666,363 $ (77,776)

Net cash provided by operating activities was $230.7 million for the six months ended June 30, 2024, as compared to net cash used in operating activities of $497.5 million for the same period in 2023.

The increase in cash provided by operating activities is primarily due to the non-refundable upfront payment under the Sanofi CLA, an increase in amounts received under our APAs and an overall decrease in operating expenses period-over-period, partially offset by the timing of payments to vendors.

Net cash used in investing activities was $380.0 million for the six months ended June 30, 2024, as compared to $31.3 million for the same period in 2023.

Net cash provided by operating activities was $85.9 million for the nine months ended September 30, 2024, as compared to net cash used in operating activities of $537.2 million for the same period in 2023.

The increase in cash provided by operating activities is primarily due to the non-refundable upfront payment under the Sanofi CLA and an overall decrease in operating expenses period-over-period, partially offset by the timing of payments to vendors.

Net cash used in investing activities was $348.0 million for the nine months ended September 30, 2024, as compared to $49.7 million for the same period in 2023.

The increase in cash used in investing activities is primarily due to our investment in marketable securities, partially offset by lower expenditures on equipment and leasehold improvements.

Net cash provided by financing activities was $264.1 million for the six months ended June 30, 2024, as compared to net cash used in financing activities of $293.0 million for the same period in 2023.

Net cash provided by financing activities was $264.0 million for the nine months ended September 30, 2024, as compared to net cash used in financing activities of $95.9 million for the same period in 2023.

The increase in cash provided by financing activities is primarily as a result of proceeds from the sale of shares under our August 2023 Sales Agreement of approximately $188 million and Subscription Agreement of $68.8 million in 2024 as compared with the $325 million repayment of our 3.75% Convertible notes and finance lease payments during 2023, partially offset by $257.0 million of proceeds from the sale of shares under our June 2021 Sales Agreement and August 2023 Sales Agreement and the sale of SK Shares.

Going Concern

As described in Note 2 to our consolidated financial statements, we evaluated our ability to continue as a going concern and concluded that we will have sufficient capital available to fund our operations for at least one-year from the date that the financial statements were issued.

As described in Note 2 to our accompanying unaudited consolidated financial statements, we evaluated our ability to continue as a going concern and concluded that we will have sufficient capital available to fund our operations for at least one-year from the date that the financial statements were issued.

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 2. Management’s Discussion and Analysis