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Item 1A. Risk Factors

2024-11-12 compared with 2024-08-08 · 16 added, 29 removed, 24 unchanged (65% of the section changed)

Information regarding risk and uncertainties related to our business appears in Part I, Item 1A.

“Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 28, 2024 and Part II, Item 1A.

“Risk Factors” of our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, which was filed with the SEC on May 10, 2024.

There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K, for the fiscal year ended December 31, 2023 and the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, other than as described below.

Risks Related to Product Development and Commercialization

We must identify vaccines for development with our technologies and establish successful third-party relationships.

The near and long-term viability of our vaccine candidates depend in part on our ability to successfully establish new strategic collaborations with pharmaceutical and biotechnology companies, non-profit organizations and government agencies.

Establishing strategic collaborations and obtaining government funding is difficult and time-consuming.

Potential collaborators may reject collaborations based upon their assessment of our financial, regulatory or intellectual property position or based on their existing pipelines;

government agencies may reject contract or grant applications based on their assessment of public need, the public interest, our products’ ability to address these areas, or other reasons beyond our expectations or control.

Collaborators also may seek to modify or terminate relationships, which may be difficult and time-consuming, and ultimately may not be successful and lead to the collaborator rejecting the collaboration.

Past success in establishing strategic collaborations with pharmaceutical and biotechnology companies, non-profit organizations and government agencies is no guarantee of future success in entering into new relationships or in performing under existing relationships.

Our existing collaborations, including with Sanofi under the Sanofi CLA for the co-commercialization of Nuvaxovid and other vaccines that include Nuvaxovid together with influenza and other antigens, may limit interest in partnering opportunities with respect to our CIC and other products.

If we fail to establish a sufficient number of collaborations or government relationships on acceptable terms, or fail to perform under collaborations or relationships to the satisfaction of counter-parties, then we may not be able to commercialize our vaccine candidates or generate sufficient revenue to fund further research and development efforts.

The collaborations we have established, including the Sanofi CLA, or may establish, may not result in the successful development or commercialization of any vaccine candidates for several reasons, including the fact that:

▪ we may not have the ability to control the activities of our partners and cannot provide assurance that they will fulfill their obligations to us, including with respect to the license, development and commercialization of vaccine candidates, in a timely manner or at all;

▪ such partners may not devote sufficient resources to our vaccine candidates or properly prosecute, maintain or defend our intellectual property rights;

▪ our partners could independently develop, or develop with third parties, products that compete directly or indirectly with our vaccine candidates if such partners believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

▪ any failure on the part of our partners to perform or satisfy their obligations to us could lead to delays in the development or commercialization of our vaccine candidates and affect our ability to realize product revenue, including with respect to Sanofi under the Sanofi CLA, revenue for our only commercial-stage product against COVID-19;

▪ disagreements, including disputes over the ownership of technology developed with such collaborators, could result in litigation, which would be time consuming and expensive, and may delay or terminate research and development efforts, regulatory approvals and commercialization activities.

If we or our collaborators fail to maintain our existing agreements or in the event we fail to establish agreements as necessary, then we could be required to undertake research, development, manufacturing and commercialization activities solely at our own expense.

These activities would significantly increase our capital requirements and, given our lack of sales, marketing and distribution capabilities, significantly delay the commercialization of our vaccine candidates.

“Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 28, 2024, Part II, Item 1A.

“Risk Factors” of our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, which was filed with the SEC on May 10, 2024, and Part II, Item 1A.

“Risk Factors” of our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, which was filed with the SEC on August 8, 2024.

There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K, for the fiscal year ended December 31, 2023, the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, and the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, other than as described below.

Risks Related to Our Financial Condition and Capital Requirements

6 unchanged sentences

We may not achieve such milestones, which could have a material and adverse effect on our financial condition.

For example, in September 2022, following a delay in obtaining regulatory approval in the United Kingdom, we entered into the Amended and Restated UK Supply Agreement, which amended and restated in its entirety the Original UK Supply Agreement, which reduced the volume of vaccine doses that the Authority committed to purchase.

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 JCVI that is approved by the UK Secretary of State for Health.

4 unchanged sentences

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.

In November 2024, we entered into a Termination and Settlement Agreement (the “Settlement Agreement”) and a Letter of Amendment to the Settlement Agreement (the “Settlement Agreement Amendment”), with the Authority, settling the disputes regarding the Amended and Restated UK Supply Agreement and releasing both parties of all claims arising out of or connected with the Amended and Restated UK Supply Agreement.

Under the terms of the Settlement Agreement, the Authority and us agreed to terminate the Amended and Restated UK 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 UK 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 chooses to accelerate payments.

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

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

1 unchanged sentence

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.

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”).

1 unchanged sentence

on or before December 31, 2024.

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

Therefore, in parallel, we plan to work with the Canadian government on an amendment that addresses possible alternatives, which may not be achievable on acceptable terms or at all.

As of June 3 0, 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.

We do not expect to receive regulatory approval of its 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 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.

We are working with the Canadian Government on an amendment to the APA that addresses regulatory approval and future delivery schedules, which may not be achievable on acceptable terms or at all.

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 1A. Risk Factors