What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-12 · 276 added, 401 removed, 154 unchanged (81% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Any statements in the discussion below and elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”) about expectations, beliefs, plans, objectives, assumptions, or future events or performance of Novavax, Inc.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Any statements in the discussion below and elsewhere in this Quarterly Report about expectations, beliefs, plans, objectives, assumptions, or future events or performance of Novavax, Inc.

(“Novavax,” together with its wholly owned subsidiaries, the “Company,” “we,” or “us”) are not historical facts and are forward-looking statements.

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 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 corporate growth strategy, including our early-stage pipeline and research and development (“R&D”) investment strategy and key value drivers;

our technology platform;

our COVID-19 program (our “COVID-19 Program”) (which currently includes our Nuvaxovid™ prototype COVID-19 vaccine ("NVX-CoV2373” or “prototype COVID-19 vaccine”), our Nuvaxovid™ COVID-19 vaccine for the 2023-2024 vaccination season (“XBB COVID-19 Vaccine”) and our Nuvaxovid™ updated COVID-19 vaccine for the 2024-2025 vaccination season (“NVX-CoV2705” or “updated COVID-19 vaccine”) collectively, referred to as our (“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 March 31, 2025 are issued;

the implementation and anticipated impact of our global restructuring and cost reduction plan (“Restructuring Plan”), which includes a more focused investment in our COVID-19 Program;

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.

(“Sanofi”) and our other license agreements;

potential market sizes and demand for our products and product candidates;

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the conduct, timing, and potential results from clinical trials and other preclinical studies;

plans for and potential timing of regulatory filings;

plans for and potential timing of future and pending regulatory filings and actions, including the U.S.

Food and Drug Administration (“U.S.

FDA”) approval of the BLA for our COVID-19 Vaccine and alignment with the U.S.

FDA on the post marketing commitment;

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;

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;

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 COVID-19-Influenza (“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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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 our partnership with Sanofi and in pursuing additional partnership opportunities;

our ability to obtain adequate additional funding to maintain our current level of operations and fund the further development of our vaccine candidates 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 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;

challenges or delays in obtaining regulatory authorization for our product candidates, including for future COVID-19 variant strain changes, our 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 our COVID-19 Vaccine and the impact of any delays or disruptions in their operations;

the impact of potential legislative, regulatory, or policy changes under the current presidential administration;

the impact of any new or changes in interpretations of existing trade measures, including tariffs, embargoes, sanctions, import restrictions, and export licensing requirements;

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

resource constraints, including human capital and manufacturing capacity, constraints on our ability to pursue planned regulatory pathways, alone or with partners, in multiple jurisdictions simultaneously, leading to staggering of regulatory filings, and potential regulatory actions;

challenges in implementing the Restructuring Plan;

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, 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 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;

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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.

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, 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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In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Information in this Quarterly Report includes a financial measure that was not prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”), which we refer to as adjusted cost of sales.

We are presenting this non-GAAP financial measure to assist an understanding of our business and its performance.

Adjusted cost of sales includes an estimate of standard manufacturing costs that were previously expensed to research and development prior to regulatory approvals for our COVID-19 Vaccine that would otherwise have been capitalized to inventory.

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 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.

Our vaccine candidates are nanostructures of conformationally correct recombinant proteins that mimic those found on pathogens.

This technology enables the immune system to recognize target proteins and develop protective immune responses.

We believe that our vaccine technology may lead to the induction of a differentiated immune response that may be more efficacious than naturally occurring immunity or some other vaccine approaches.

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 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 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 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.

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

Additionally, Sanofi has the right to develop novel influenza-COVID-19 combination vaccines utilizing our COVID-19 Vaccine and Sanofi’s seasonal influenza vaccine, combination products containing our COVID-19 Vaccine and one or more non-influenza vaccines, and multiple new vaccines utilizing our Matrix-M TM adjuvant.

We are eligible to receive royalties and milestones associated with the ongoing sales of our COVID-19 Vaccine and Sanofi’s influenza-COVID-19 combination vaccine and any other combination vaccines Sanofi may develop, as well as ongoing product royalties for vaccines developed with our Matrix-M TM adjuvant.

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 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 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 15 to our accompanying unaudited consolidated financial statements.

We are a company tackling global health challenges through scientific innovation that seeks to maximize our deep scientific expertise in vaccines and our cutting-edge technology platform.

The differentiated platform features our recombinant protein-based nanoparticle technology and unique Matrix-M ® adjuvant.

Our three strategic priorities are:

focusing on our partnership with Sanofi announced in May 2024, leveraging our technology platform and pipeline to forge additional partnerships, and advancing our proven technology platform and early-stage pipeline.

Our corporate growth strategy is supported by a lean and focused operating model.

Our technology platform combined with our deep vaccine expertise, is the fuel for innovation and partnerships and we believe it has the potential to create significant value.

Our proprietary Matrix-M ® adjuvant when added to vaccines, has been shown to help induce a stronger and longer-lasting immune response.

Our recombinant protein-based nanoparticle technology has been shown to be highly immunogenetic.

Together, we believe that our technology platform can induce potent, durable and broad immune responses, with the potential to be antigen-sparing.

Our Matrix-M ® adjuvant can increase both antibody and cell-mediated immune responses to the vaccine and it has demonstrated a favorable tolerability profile in clinical trials.

Our technology platform is used in our authorized COVID-19 vaccine and the R21/Matrix-M ® adjuvant malaria vaccine.

In May 2024, we entered into a Collaboration and License Agreement with Sanofi, to co-commercialize our COVID-19 vaccine, including future updated versions that address seasonal COVID-19 variants.

Sanofi has the right to develop novel influenza-COVID-19 combination vaccines utilizing our COVID-19 vaccine and Sanofi’s seasonal influenza vaccine, combination products containing our COVID-19 vaccine and one or more non-influenza vaccines, and multiple new vaccines utilizing our Matrix-M ® adjuvant.

In December 2024, Sanofi announced that the U.S.

FDA granted Fast Track designation to two Sanofi combination vaccine candidates:

the first combination consists of Fluzone High-Dose TM combined with our COVID-19 vaccine, and the second combination consists of Flublok TM with our COVID-19 vaccine.

Sanofi is evaluating the safety and immunogenicity of both combination vaccine candidates in two separate Phase 1/2 trials.

We are eligible to receive royalties and milestones associated with the ongoing sales of our COVID-19 vaccine and Sanofi’s influenza-COVID-19 combination vaccines and any other combination vaccines Sanofi may develop, as well as ongoing product royalties for

vaccines developed with our Matrix-M ® adjuvant.

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

Additionally, we are advancing our pipeline of both late- and early-stage programs with a focus on potentially high-value assets in areas with unmet medical need, compelling scientific rationale and strong commercial opportunity.

Our late-stage programs include a CIC vaccine candidate, as well as a stand-alone influenza vaccine candidate.

In December 2024, we initiated the initial cohort of a Phase 3 trial comparing our CIC vaccine and stand-alone influenza vaccine to our updated COVID-19 vaccine and a licensed seasonal influenza vaccine comparator in adults aged 65 and older.

We intend to partner these vaccine candidates in order to advance to BLA filing and commercialization.

Furthermore, we provide our Matrix-M ® adjuvant for use in collaborations.

These include the R21/Matrix-M ® adjuvant malaria vaccine, a malaria vaccine developed by our partner, the Jenner Institute, University of Oxford (“R21/Matrix-M ® adjuvant malaria vaccine”) and manufactured by SII.

R21/Matrix-M ® adjuvant malaria vaccine is authorized in several countries.

Additionally, we provide Matrix-M ® adjuvant for use in various programs in preclinical and clinical stage, as well as preclinical investigations.

Examples include, an agreement with the Gates Foundation, and in a related master transfer agreement with a leading pharmaceutical company for exploration of Matrix-M ® adjuvant used as a potential advancement in their pipeline.

We continue to advance our strategic assessment of our emerging, early-stage pipeline.

We intend to develop our early-stage pipeline using a disciplined and capital-efficient approach.

Our R&D investment strategy seeks to place smart, lower-cost investments on the programs with the highest potential value, both within infectious disease and beyond, with the intent of partnering these programs at proof of concept.

We would consider advancing a program ourselves where data and commercial landscape indicate a unique high-value opportunity.

We are pursuing early-stage research in diseases such as, respiratory syncytial virus (“RSV”) combinations, varicella-zoster virus (shingles) and Clostridioides difficile (C.

Diff.) colitis.

We are actively working to evaluate several RSV combination candidates to progress forward toward an Investigational New Drug (“IND”).

We are actively developing an H5N1 avian pandemic influenza vaccine candidate and the toxicology study is underway.

We are actively monitoring the emerging public health situation and are pursuing funding opportunities to join preparedness options.

Additionally, we are evaluating potential expansion beyond infectious diseases, where we believe our technology could augment and improve upon current therapies.

Technology Overview

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The Sf-/BV system produces protein-based antigens that are properly folded and modified, which can be critical for functional, protective immunity.

Protein antigens are purified and organized around a polysorbate-based nanoparticle core in a configuration that resembles their native presentation.

This results in a highly immunogenic nanoparticle that is ready to be formulated with Matrix-M™ adjuvant.

Our testing shows this results in a highly immunogenic nanoparticle that is ready to be formulated with Matrix-M ® adjuvant.

Matrix-M ® Adjuvant

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We continue to evaluate commercial opportunities for the use of our Matrix-M ® adjuvant alongside vaccine antigens produced by other manufacturers.

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 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.

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

(“SK”) for use of our Matrix-M™ adjuvant in preclinical vaccine experiments for shingles, influenza, and pan-COVID-19.

Our adjuvant technology is also being used by commercial partners as a key component in veterinary vaccines against equine influenza and Strangles, as well as the manufacture of black-widow anti-venom.

Matrix-M ® adjuvant is being evaluated in combination with several partner-led malaria vaccine candidates, including for R21/Matrix-M ® adjuvant malaria vaccine.

The R21/Matrix-M ® adjuvant malaria vaccine has been licensed to SII for commercialization.

In May 2024, pursuant to the Sanofi CLA, Sanofi received a non-exclusive license to develop and commercialize other vaccine products that include our Matrix-M ® adjuvant.

In September 2024, we 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.

COVID-19 Vaccine Regulatory and Licensure

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.

We continue to work closely with governments, regulatory authorities, and non-governmental organizations in our commitment to facilitate global access to our COVID-19 vaccine.

Our COVID-19 BLA is currently under review with the U.S.

FDA and had originally been assigned a Prescription Drug User Fee Act (“PDUFA”) date of April 1, 2025.

During April 2025, we received formal communication from the U.S.

FDA in the form of an information request for a post marketing commitment (“PMC”) to generate additional clinical data.

We have responded to the U.S.

FDA’s information request with a proposed study design and continue to engage with the U.S.

FDA to address the PMC request and move to approval as soon as possible..

Product Pipeline

Our clinical pipeline encompasses vaccine candidates for infectious diseases.

We are advancing our pipeline of late- and early-stage programs with a focus on potentially high-value assets in areas with unmet medical need, compelling scientific rationale and strong commercial opportunity.

Development and advancement of our in-house pipeline leverages our core expertise and our experience in respiratory and infectious diseases and vaccines, and we intend to explore new opportunities with the potential to expand beyond infectious diseases.

Our partnered pipeline includes our COVID-19 vaccine and our Matrix-M ® adjuvant used in collaboration for development of new and existing vaccines.

Pipeline Overview

Our pipeline encompasses vaccine candidates for infectious diseases.

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

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 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;

and Nuvaxovid™, and authorized in the U.S.

under trade name, Novavax COVID-19 Vaccine, Adjuvanted (2024-2025 Formula);

Ongoing post-authorization Phase 3 strain change trial.

(2) Commercialized by SII;

Granted prequalification by the WHO and distributed by UNICEF to endemic countries in Africa.

We will continue to commercialize our updated COVID-19 vaccine through the end of the 2024-2025 vaccination season, and beginning in 2025 and continuing during the term of the Sanofi CLA, we and Sanofi will commercialize our COVID-19 vaccine worldwide in accordance with a commercialization plan agreed by us and Sanofi.

Our COVID-19 vaccine has received authorizations from the U.S.

FDA, the European Commission (“EC”), the WHO and several other countries for both adult and adolescent populations.

We advanced our COVID-19 vaccine to a post-authorization Phase 3 safety and immunogenicity trial.

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

Additionally, we intend to develop our early-stage pipeline using a disciplined and capital-efficient approach.

We would consider advancing a program ourselves where data and commercial landscape indicate a unique high-value opportunity.

We are actively developing an H5N1 avian pandemic influenza vaccine candidate and monitoring the emerging public health situation while pursuing funding opportunities to join preparedness options.

We are conducting early-stage research in diseases such as, RSV combinations, varicella-zoster virus (shingles) and Clostridium difficile (C.

Diff.) colitis.

Lastly, we are evaluating potential expansion beyond infectious diseases, where we believe our technology has the potential to augment and improve upon current therapies.

In addition to our own pipeline, we have several partnership opportunities.

For example, our Matrix-M ® adjuvant is being used for collaboration in R21/Matrix-M ® adjuvant malaria vaccine.

We believe our partner-led R21/Matrix™ adjuvant malaria vaccine presents significant potential.

Based on preliminary results from an ongoing Phase 3 trial in infants and toddlers in Africa, showing 72-79% efficacy, the R21/Matrix-M ® adjuvant malaria vaccine has been authorized in Ghana, Nigeria, and Burkina Faso, and in December 2023, was granted prequalification by the WHO.

Under our agreement, we have also provided a sole license to Sanofi for the independent development of a COVID-19 and influenza combination product using our COVID-19 vaccine in combination with two of Sanofi’s separately marketed influenza vaccines, Fluzone High-Dose TM and Flublok TM to evaluate immunogenicity and safety in Phase 1/2 combination vaccine trials.

These two combination vaccine candidates were granted Fast Track designation by the U.S.

FDA in December 2024 to prevent influenza and COVID-19 infections in individuals aged 50 and older.

Sanofi also has a non-exclusive license to develop and commercialize combination products containing both our COVID-19 vaccine and one or more non-influenza vaccines, and a non-exclusive license to develop and commercialize other vaccine products selected by Sanofi that include our Matrix-M ® adjuvant.

Coronavirus Vaccine Clinical Development

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.

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 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.

Topline data from this study was submitted to the U.S.

FDA in February 2025 and showed that our JN.1 vaccine induced robust cross-reactive neutralizing activity to the JN.1 variant and to a panel of JN.1 lineage strains representing virtually all of those that circulated in the U.S.

during the 2024-2025 respiratory virus season.

Serum samples from this study will continue to be tested against newly emerging strains as we prepare for the 2025-2026 season, and these results are expected to support regulatory submissions in the U.S.

and other jurisdictions for 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 evaluated 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 the BLA and regulatory submissions in other territories for future variant strain formulations.

Phase 2b/3 Pediatric Hummingbird™ Study

In December 2024, we achieved the $50 million milestone under our agreement with Sanofi, associated with the database lock for one of the three cohorts in this study.

In August 2023, we announced topline results from our Phase 2b/3 Hummingbird™ trial that met its primary endpoints in children aged 6 through 11 years demonstrating both tolerability and immunologic responses.

This ongoing trial is evaluating the safety, effectiveness (immunogenicity), and efficacy of two doses of our prototype vaccine (NVX-CoV2373), followed by a booster 6 months after the primary vaccination series.

This ongoing trial is evaluating the safety, effectiveness (immunogenicity), and efficacy of two doses of our prototype COVID-19 vaccine (NVX-CoV2373), followed by a booster 6 months after the primary vaccination series.

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

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 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.

FDA has informed us that, due to changes in pediatric sero-epidemiology that have occurred since this study was initiated, an additional immunogenicity study will be needed to support a supplemental BLA to expand the pediatric indication.

COVID-Influenza Combination and Stand-alone Influenza Program

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.

Phase 3 Clinical Trial of CIC and Stand-alone Influenza Vaccine Candidates

In December 2024, we initiated a Phase 3 immunogenicity and safety trial for our CIC and stand-alone influenza vaccine candidates to evaluate the immunogenicity and safety compared to our updated COVID-19 vaccine and a licensed seasonal influenza vaccine comparator in adults aged 65 and older.

Our Phase 3 immunogenicity and safety trial completed enrollment with an initial cohort of approximately 2,000 participants.

We anticipate topline data for this initial patient cohort by mid-2025.

After consultation with the U.S.

FDA, we determined that seeking an accelerated approval pathway for either of our CIC or stand-alone influenza candidates would not be feasible.

While not a pivotal study, the data from the Phase 3 immunogenicity and safety trial will be essential to inform the design of a subsequent pivotal trial in older adults for both programs.

We do not intend to advance these vaccine candidates without a partner and we therefore do not intend to make additional investments in these programs and are seeking to partner both vaccine candidates.

The Phase 3 immunogenicity and safety trial builds on Phase 2 data that was previously shared in May 2023, where the vaccine candidates showed preliminary robust immune responses, reassuring safety profiles, and reactogenicity that was comparable to the licensed influenza vaccine comparator arms.

The Phase 2 dose-confirming randomized, observer-blinded trial evaluated the safety and effectiveness (immunogenicity) of different formulations of the CIC and influenza vaccine candidates, and higher doses of Novavax's COVID-19 vaccine in 1,575 adults aged 50 through 80 years.

The CIC vaccine candidate achieved both anti-SARS-CoV-2 immunoglobulin G (IgG) and neutralizing levels comparable to our prototype COVID-19 vaccine.

In addition, several of the combination formulations achieved responses to both SARS-CoV-2 and to the four homologous influenza strains that were comparable to the reference comparators, supporting their prioritization for advanced development.

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 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.

Analysis of the complete dataset is ongoing to determine the utility of pursuing a high dose formulation.

R21/Matrix-M ® Adjuvant Malaria Vaccine

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We have an agreement with SII related to its manufacture of R21/Matrix-M ® adjuvant malaria vaccine under which SII purchases our Matrix-M ® adjuvant for use in development activities at cost and for commercial purposes at a tiered commercial supply price, and pays a royalty in the single- to low-double digit range based on vaccine sales for a period of 15 years after the first commercial sale of the vaccine in each country.

In December 2023, the WHO announced it prequalified the R21/Matrix-M TM adjuvant malaria vaccine to prevent malaria disease in children caused by the P.

falciparum parasite in endemic areas.

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

As part of the WHO malaria program, at their discretion, the vaccine is expected to be included in countries such as Central African Republic, Chad, Democratic Republic of Congo, Mozambique, Nigeria and Uganda.

In December 2023, the WHO announced it prequalified the R21/Matrix-M ® adjuvant malaria vaccine to prevent malaria disease in children caused by the P.

falciparum parasite in endemic areas.

Prequalification status enables United Nations agencies to procure the vaccine for eligible countries and enabled rollout of the vaccine in mid-2024.

The WHO recommended that the R21/Matrix-M ® adjuvant malaria vaccine be administered in a four-dose schedule beginning at five months of age.

Business Highlights

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.

First Quarter 2025 and Recent Highlights

Strategic Priority #1:

Sanofi Partnership

• COVID-19 BLA under review by the U.S.

In April 2025, we received an information request for a PMC for a clinical trial.

Discussions with the U.S.

FDA regarding our proposed study design are ongoing and we believe our BLA is approvable upon alignment on the details of the PMC.

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

Global Markets:

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

• Transfers of marketing authorization to Sanofi for U.S.

and European Union markets, assuming approvals in each jurisdiction, are expected in Q4 2025, and trigger an additional $50 million in combined milestones from Sanofi.

Strategic Priority #2:

Leverage our technology platform and pipeline to forge additional partnerships

• In April 2025, Novavax and Takeda Pharmaceutical Company Limited (“Takeda”) announced significantly improved terms for their partnership to support ongoing commercialization of Nuvaxovid ® in Japan.

As part of this agreement, we will receive a $20 million upfront payment, a payment related to the 2024-2025 season and are eligible to receive annual milestone payments plus royalties on net sales.

• In March 2025, we signed an additional Material Transfer Agreement (“MTA") for Matrix-M ® with a top tier pharmaceutical company, expanded the scope of the MTA signed in the fall to now include viral pathogens, and entered a preclinical collaboration with a new partner to explore the application and utility of Matrix-M ® with their cancer vaccine candidate.

• Completed enrollment and expect initial cohort data by mid-year for the Phase 3 trial for our COVID-19-Influenza Combination and stand-alone seasonal influenza vaccine candidates to evaluate immunogenicity and safety in adults aged 65 and older.

We intend to partner these programs, and this trial reflects the material completion of our investment.

• Presented data at the April 2025 World Vaccine Congress on the potential of our technology platform and Matrix-M ® adjuvant, which showcases attributes related to efficacy and tolerability.

Highlights included utility of Matrix-M ® across multiple vaccine platforms and disease areas, underscoring breadth of potential partnership opportunities.

Strategic Priority #3:

Advance our technology platform and early-stage pipeline

• In April 2025, announced preliminary results from the SHIELD-Utah study that showed Novavax’s COVID-19 Vaccine, Adjuvanted (2024-2025 Formula) targeting the JN.1 strain resulted in fewer and less severe reactogenicity symptoms, when compared with the Pfizer-BioNTech mRNA 2024-2025 vaccine.

• Continued advancement of early-stage preclinical research for H5N1 avian pandemic influenza, respiratory syncytial virus combinations, varicella-zoster virus (shingles) and Clostridioides difficile colitis vaccine candidates.

• Continued work on new potential Matrix formulations intended to improve upon and expand the utility of Matrix-M ® .

Other Corporate Highlights

• We continued to evolve and strengthen our Board of Directors with the appointment of Margaret McGlynn, RPh, as Chair of the Board and the appointment of John Shiver, PhD, and Charles Newton as directors.

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 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.

During the three months ended March 31, 2025 and 2024, no sales were recorded under the August 2023 Sales Agreement.

As of March 31, 2025, the remaining balance available under the August 2023 Sales Agreement was approximately $51 million.

Critical Accounting Policies and Use of Estimates

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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 accompanying unaudited consolidated financial statements.

Revenue Recognition, Licensing and Transition Services

The terms of licensing agreements may contain multiple performance obligations, which may include licenses and transition services.

We evaluate licensing agreements under ASC 606, Revenue from Contracts with Customers (“ ASC 606”), to determine the distinct performance obligations.

Prior to recognizing revenue, we estimate the transaction price, including variable consideration that is subject to a constraint.

Variable consideration is included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved.

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 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.

These estimates are subjective and require us any to make assumptions about future cash flows.

Revenue related to performance obligations satisfied at a point in time is recognized when the customer obtains control of the promised asset.

For performance obligations recognized over time, we recognize revenue using an input method to measure progress by utilizing costs incurred to-date relative to total expected costs.

Under this process, we consider the costs that have been incurred to-date, as well as projections to completion using various inputs and assumptions, including, but not limited to, progress towards completion, labor costs and level of effort, material and subcontractor costs, indirect administrative costs, and other identified risks.

Estimating the total cost at completion of our performance obligation under a contract is subjective and requires us to make assumptions about future activity and cost drivers.

Changes in these estimates can occur for a variety of reasons and may impact the timing of revenue recognition on our contracts.

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 adjustments as a result of changes in estimates arising from this process.

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, 2024, as filed with the SEC.

Recent Accounting Pronouncements Not Yet Adopted

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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 September 30, 2024 and 2023

Three Months Ended September 30,

Our historical results are not necessarily indicative of the results for any periods in the future.

Three Months Ended March 31, 2025 and 2024

Three Months Ended March 31,

2025 2024 Change

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Licensing, royalties, and other 44,977 4,019 40,958

— 164,922 (164,922)

Total revenue $ 666,655 $ 93,855 $ 572,800

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.

Revenue for the three months ended March 31, 2025 was $666.7 million as compared to $93.9 million for the same period in 2024, an increase of $572.8 million.

Revenue for the three months ended March 31, 2025 was primarily comprised of revenue from the termination of our APAs with Canada (“Canada APA”) and New Zealand (“New Zealand APA”) of $575.7 million and $27.3 million, respectively, and the recognition of previously deferred upfront payments and revenue from transition services and technology transfer under the Sanofi CLA.

Revenue for the three months ended March 31, 2024 was primarily comprised of revenue from product sales of COVID-19 Vaccine.

The increase in revenue is primarily due to an increase in product sales from recognition of amounts previously deferred under the Canada and New Zealand APAs and an increase in licensing, royalties, and other revenue from transition services and technology transfer revenue under the Sanofi CLA.

Product sales

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 September 30,

Product sales for the three months ended March 31, 2025, were $621.7 million as compared to $89.8 million during the three months ended March 31, 2024.

Our product sales related to revenue from Nuvavovid™ sales, which commenced in 2022, commercial supply sales of COVID-19 Vaccine, revenue from supply of Adjuvant and other products, and recognition of amounts previously deferred under the Canada and New Zealand APAs.

The categories of product sales were as follows:

Three Months Ended March 31,

2025 2024 Change

North America

Product sales (in thousands)

Nuvaxovid™ sales (1)

$ 608,025 $ 82,324 $ 525,701

Europe 1,167 — 1,167

Rest of the world

Supply sales (2)

13,653 7,512 6,141

Total product sales $ 621,678 $ 89,836 $ 531,842

$ 38,210 $ 2,231 $ 35,979

(1) Nuvaxovid™ sales are sales of our COVID-19 vaccine associated with APAs with various governments globally and commercial markets, where we are the commercial lead for sales and distribution, made through pharmaceutical wholesale distributors.

(2) Supply sales include commercial sales of COVID-19 Vaccine, adjuvant sales, and sale of other materials to our partners.

We reclassified $7.5 million of revenue previously reported as License, royalties, and other revenue to product sales revenue for the three months ended March 31, 2024 related to adjuvant supply sales and other supply sales.

Licensing, royalties, and other

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

royalty milestone payments;

sales-based royalties;

and Matrix-M™ adjuvant sales.

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 September 30,

2024 2023 Change

Expenses (in thousands):

Cost of sales $ 60,619 $ 98,929 $ (38,310)

Research and development 87,164 106,229 (19,065)

Selling, general, and administrative 70,747 107,460 (36,713)

Total expenses $ 218,530 $ 312,618 $ (94,088)

Cost of Sales

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.

After receiving regulatory approval, we capitalize the costs of production for a particular supply chain when we determine that we have a present right to the economic benefit associated with the product.

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.

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 $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 September 30,

Coronavirus vaccines $ 21,798 $ 41,263

Other vaccine development programs

Total direct external research and development expense 24,458 42,016

Employee expenses 33,504 33,957

Stock-based compensation expense 5,166 10,022

Facility expenses 13,855 12,360

Other expenses 10,181 7,874

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

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 $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.

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 15 to our accompanying unaudited consolidated financial statements.

Other Income (Expense)

Three Months Ended September 30,

2024 2023 Change

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 (expense), net

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

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,

Licensing, royalties, and other revenue during the three months ended March 31, 2025 was $45.0 million as compared to $4.0 million during the same period in 2024, an increase of $41.0 million.

The increase was primarily due to $40.3 million of revenue from transition services and technology transfer under the Sanofi CLA.

Licensing, royalties, and other revenue were comprised of the following:

Three Months Ended March 31,

2025 2024 Change

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

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

Net loss per share, basic and dilutive

$ (0.76) (1.26) $ 0.50

Weighted average shares outstanding, basic and dilutive

Licensing, royalties, and other (in thousands)

Sanofi $ 40,321 $ — $ 40,321

Other partners (1)

4,656 4,019 637

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,

Total licensing, royalties, and other revenue $ 44,977 $ 4,019 $ 40,958

(1) Other partners revenue includes royalties and license fees associated with agreements with other partners such as Serum, Takeda, and SK bioscience, Co., Ltd.

Sanofi licensing, royalties, and other revenue were comprised of the following:

Three Months Ended March 31,

2025 2024 Change

Revenue (in thousands):

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

Licensing, royalties, and other 453,413 23,046 430,367

Sanofi licensing, royalties, and other revenue (in thousands)

Transition services and technology transfer:

Upfront fee amortization (1)

$ 19,912 $ — $ 19,912

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

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 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

The geographic distribution of product sales was as follows:

Nine Months Ended September 30,

North America

Milestones amortization (1)

9,143 — 9,143

Europe 91,753 59,322 32,431

Rest of the world

Cost reimbursements

11,266 — 11,266

Total product sales

Total Sanofi licensing, royalties, and other revenue

$ 40,321 $ — $ 40,321

Licensing, royalties, and other

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

royalty milestone payments;

sales-based royalties;

and Matrix-M™ adjuvant sales.

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 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.

Nine Months Ended September 30,

(1) Upfront fee amortization and Milestones amortization represent revenue recognized during the period related to the $500 million upfront payment and the $50 million milestone for database lock of an existing Phase 2/3 clinical trial in 2024 that were deferred upon achievement and are recognized in revenue over time.

Three Months Ended March 31,

2025 2024 Change

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Cost of Sales

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.

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.

Cost of sales was $14.1 million for the three months ended March 31, 2025, including expenses of $0.3 million related to excess, obsolete, or expired inventory and losses on certain firm purchase commitments and $1.8 million related to unutilized manufacturing capacity.

Cost of sales was $59.2 million for the three months ended March 31, 2024, including expense of $8.8 million related to excess, obsolete, or expired inventory and losses on firm purchase commitments and $6.0 million related to unutilized manufacturing capacity.

The decrease in cost of sales of $45.1 million was mainly driven by a decrease in the number of COVID-19 Vaccine doses sold, a decrease in excess, obsolete, and expired inventory charges, and a decrease in unutilized manufacturing capacity charges.

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 $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.

Nine Months Ended September 30,

Research and development expenses were $88.9 million for the three months ended March 31, 2025 as compared to $92.7 million for the three months ended March 31, 2024, a decrease of $3.7 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 March 31,

Coronavirus vaccines $ 18,059 $ 26,061

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Total research and development expenses $ 88,937 $ 92,679

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).

Research and development expenses for coronavirus vaccines for the three months ended March 31, 2025 and 2024 decreased from $26.1 million to $18.1 million primarily as a result of our global restructuring and cost reduction efforts and 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 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.

consolidated financial statements.

Selling, general, and administrative expenses were $48.1 million for the three months ended March 31, 2025 as compared to $86.8 million for the same period in 2024, a decrease of $38.7 million.

The decrease in selling, general, and administrative expenses is primarily due to certain cost containment measures to reduce our operating spend, including reduction in costs as a result of the sale of Novavax CZ in December 2024.

For the remainder of 2025, 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 accompanying unaudited consolidated financial statements.

Other Income (Expense)

Nine Months Ended September 30,

Three Months Ended March 31,

2025 2024 Change

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

Interest expense $ (5,723) $ (4,111) $ (1,612)

Other income, net

10,056 3,654 6,402

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$ 4,333 $ (457) $ 4,790

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.

Total other income (expense), net was $4.3 million of income for the three months ended March 31, 2025 as compared to a total other income (expense), net of $0.5 million of expense for the same period in 2024.

The increase in other income (expense), net is primarily due to 2025 other income items of $4.8 million from the derivative action settlement proceeds and $3.6 million of state incentives, partially offset by the unfavorable impact in 2025 as compared to 2024 of exchange rates on foreign currency denominated balances.

Income Tax Expense

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,

During the three months ended March 31, 2025, we recognized income tax expense of $0.7 million related to federal, state, and foreign income taxes, and foreign withholding tax expense of $0.5 million.

During the three months ended March 31, 2024, we recognized an income tax expense of $2.3 million related to federal, state, and foreign income taxes.

Net Income (Loss)

Three Months Ended March 31,

2025 2024 Change

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

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

Net Loss per share, basic and dilutive

$ (0.71) $ (3.94) $ 3.23

Weighted average shares outstanding, basic and dilutive

149,486 93,046 56,440

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.

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

Net income (loss) $ 518,646 $ (147,550) $ 666,196

Net income (loss) per share, basic $ 3.22 $ (1.05) $ 4.27

Net income (loss) per share, diluted $ 2.93 $ (1.05) $ 3.98

Weighted average shares outstanding, basic 161,049 139,916 21,133

Weighted average shares outstanding, dilutive 177,625 139,916 37,709

Net loss for the three months ended March 31, 2025 was $518.6 million, or $3.22 per share, basic and $2.93 per share, dilutive, as compared to net loss of $147.6 million, or $1.05 per share, basic and dilutive, for the same period in 2024.

The increase in net income during the three months ended March 31, 2025, was primarily due to an increase in total revenue and a decrease in total expenses.

The increase in weighted average shares outstanding for the three months ended March 31, 2025, was primarily a result of sales of our common stock.

Liquidity Matters and Capital Resources

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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.

Additionally, our plans include our ongoing restructuring and cost reduction measures as a part of our Restructuring Plan (see Note 16 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.

If we are unable to obtain additional capital, we will assess our capital resources and may be required to delay, reduce the scope of, or eliminate some or all of our operations, or further downsize our organization, any of which may have a material adverse effect on our business, financial condition, results of operations.

In May 2024, we entered into the Sanofi CLA pursuant to which Sanofi received:

i) A co-exclusive license to commercialize our current stand-alone COVID-19 Vaccine, including our prototype vaccine and updated vaccines, that address seasonal variants throughout the world (the “COVID-19 Vaccine Products”);

ii) A sole license to develop and commercialize combination products containing a potential combination of our COVID-19 Vaccine and Sanofi’s seasonal influenza vaccine (“COVID-19 and influenza Combination Products” or “CIC Products”);

iii) A non-exclusive license to develop and commercialize combination products containing both our COVID-19 Vaccine and one or more non-influenza vaccines (“Other Combination Products” and together with the COVID-19 Vaccine Products, CIC Products, and Other Combination Products (“Licensed COVID-19 Products” );

iv) A non-exclusive license to develop and commercialize other vaccine products selected by Sanofi that include our Matrix-M™ adjuvant.

Under the Sanofi CLA, we received a non-refundable upfront payment of $500 million.

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

Sanofi Collaboration and License Agreement

In May 2024, we entered into the Sanofi CLA pursuant to which we received a non-refundable upfront payment of $500 million.

During the quarter ended March 31, 2025, we received a milestone payment of $50 million for database lock of an existing Phase 2/3 clinical trial in 2024 and are eligible to receive additional development, technology transfer, launch, and sales milestone payments totaling up to $650 million in the aggregate with respect to the Licensed COVID-19 Products and royalty payments on Sanofi’s sales of such licensed products.

In addition, we are eligible to receive development, launch, and sales milestone payments of up to $200 million for each of the first four Adjuvant Products and $210 million for each Adjuvant Product thereafter, and royalty payments on Sanofi’s sales of all such licensed products,

Commencing shortly after the effective date of the Sanofi CLA, we commenced activities related to the technology transfer of our manufacturing process for the COVID-19 Vaccine Products and Matrix-M™ components to Sanofi.

Until the successful completion of such transfer, we will supply Sanofi with both COVID-19 Vaccine Products and Matrix-M™ intermediary components for Sanofi’s use and are eligible for reimbursement of such costs from Sanofi.

Additionally, Sanofi will reimburse us for our research and development and medical affairs costs related to the COVID-19 Vaccine Products in accordance with agreed upon plans and budgets.

Under the Sanofi CLA, we will continue to commercialize the updated vaccine.

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

Remaining Sanofi sales milestone payments of $650 million include $300 million related to COVID-19 Vaccine Products and $350 million related to influenza-COVID-19 combination products.

The COVID-19 Vaccine Products milestones remaining include a $175 million milestone upon the approval of the BLA marketing authorization for our COVID-19 Vaccine Product in a pre-filled syringe from the U.S.

FDA, $25 million upon the transfer of the U.S.

MAH to Sanofi, $25 million upon the transfer of EMA MAH in a pre-filled syringe to Sanofi, and $75 million upon the completion of the technology transfer of our manufacturing process for the COVID-19 Vaccine Products to Sanofi.

The influenza-COVID-19 combination product milestones include a $125.0 million milestone upon achievement of certain influenza-COVID-19 combination products-related

development milestones, and a $225.0 million in influenza-COVID-19 combination products-related launch milestones.

We believe our BLA is approvable based on conversations with U.S.

FDA, as of our PDUFA date on April 1 and through the date of this Quarterly Report on Form 10-Q.

We recently received formal communication from the U.S.

FDA in the form of an information request for a post marketing commitment (“PMC”) to generate additional clinical data.

We have responded to the FDA’s information request with a proposed study design and continue to engage with the U.S.

FDA to address the PMC request and move to approval as soon as possible.

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

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, 6.9 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.

Such upfront payments generally become non-refundable upon our achievement of certain development, regulatory, and commercial milestones.

Additionally, for the remaining APA agreements, our intent is to amicably negotiate or deliver doses or when appropriate, exit agreements.

In October 2023, NVX-CoV2601 received EUA from the U.S.

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

Immediately upon authorization, NVX-CoV2601 has also been included in the recommendations issued by the CDC in September 2023.

Doses became available within the U.S.

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 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”).

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

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 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 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”).

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”).

The Canadian government may terminate the Canada APA, as amended, if we fail to receive regulatory approval for its COVID-19 Vaccine using bulk antigen produced at Biologics Manufacturing Centre (“BMC”) Inc.

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 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.

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.

If the Authority did not purchase the Conditional Doses or the number of such Conditional Doses was reduced below 15 million doses of our prototype vaccine, we would have to repay up to $225.0 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement.

Under the Amended and Restated UK Supply Agreement, the Authority also has the option to purchase up to an additional 44 million doses, in one or more tranches, through 2024.

As of November 30, 2022, the JCVI had not made a supportive recommendation with respect to our prototype vaccine, thereby triggering, under the terms of the Amended and Restated UK Supply Agreement, (i) a reduction of the number of Conditional Doses from 15 million doses to 7.5 million doses, which reduced number of Conditional Doses were contingent on, and subject to further reduction based on, our timely achievement by November 30, 2023 of a supportive recommendation from JCVI that is approved by the UK Secretary of State for Health as described in the paragraph above, and (ii) an obligation for us to repay $112.5 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement.

In April 2023, we repaid the $112.5 million related to the November 30, 2022 triggering event.

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 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.

As of December 31, 2023, the remaining Gavi Advance Payment Amount was $696.4 million.

In February 2024, we and Gavi entered into a Termination and Settlement Agreement (the “Gavi Settlement Agreement”) terminating the Gavi APA, settling the arbitration proceedings, and releasing both parties of all claims arising from, under, or otherwise in connection with the Gavi APA.

Pursuant to the Gavi Settlement Agreement, we are responsible for payment to Gavi of (i) an initial settlement payment of $75 million, which we paid in February 2024, and (ii) deferred payments, in equal annual amounts of $80 million payable each calendar year through a deferred payment term ending December 31, 2028.

The deferred payments are due in variable quarterly installments beginning in the second quarter of 2024 and total $400 million during the deferred payment term.

Such deferred payments may be reduced through Gavi’s use of an annual vaccine credit equivalent to the unpaid balance of such deferred payments each year, which may be applied to qualifying sales of any of our vaccines funded by Gavi for supply to certain low-income and lower-middle income countries.

We have the right to price the vaccines offered to such low-income and lower-middle income countries in our discretion, and, when utilized by Gavi, we will credit the actual price per vaccine paid against the applicable credit.

We intend to price vaccines offered via the tender process, consistent with our shared goal with Gavi to provide equitable access to those countries.

Also, pursuant to the Gavi Settlement Agreement, we granted Gavi an additional credit of up to $225 million that may be applied against qualifying sales of any of our vaccines for supply to such low-income and lower-middle income countries that exceed the $80 million deferred payment amount in any calendar year during the deferred payment term.

In total, the Gavi settlement agreement is comprised of $700 million of potential consideration, consisting of the $75 million initial settlement payment, deferred payments of up to $400 million that may be reduced through annual vaccine credits, and the additional credit of up to $225 million that may be applied for certain qualifying sales.

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 nine months ended September 30, 2024.

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.

Takeda Amended and Restated Collaboration and License Agreement

On April 29, 2025, we entered into a collaboration and exclusive license agreement, as amended, (the “Amended Takeda CLA”) with Takeda which amends and supersedes the collaboration and exclusive license agreement, dated February 24, 2021, (the “Original Takeda CLA,” together with the Amended Takeda CLA, the “ Takeda CLA”).

Under the Amended Takeda CLA, we will receive a non-refundable upfront payment of approximately $20 million of which $5.0 million is creditable against royalties owed by Takeda for its fiscal year 2024.

In addition, on an annual basis, (i) we will receive $2.0 million to compensate us for services provided by us under the Takeda CLA, and (ii) we will receive an additional $8.0 million annual milestone payment, of which $5.0 million is creditable against royalties owed by Takeda in its fiscal year 2025 or thereafter, if Takeda receives marketing approval of the COVID-19 Vaccine in that year or such approval is not necessary for such year.

The parties have also updated the financial terms to replace the share of operating profits and, instead, provide us with a tiered royalty as a percentage of Takeda’s, its affiliates’ and sublicensees’ total net sales in the mid to high-teen percentages (subject to certain capped royalty reductions), commencing on April 1, 2024 and will continue until the latest of (a) twenty years after April 29, 2025, (b) all our know-how licensed under the Amended Takeda CLA has become publicly available through no fault of Takeda, and (c) the expiration of the last valid claim in the intellectual property rights licensed by us to Takeda under the Amended Takeda CLA covering COVID-19 Vaccine in Japan.

In connection with the Amended Takeda CLA, on April 29, 2025, we entered into a release agreement with Takeda under which we released Takeda and Takeda released us from all claims that were asserted or could have been asserted by either party against the other party that related to the Original Takeda CLA and the activities thereunder.

Supply Agreements

As of March 31, 2025, we have remaining obligations under APAs with certain countries globally, excluding the Vaccine Alliance (“Gavi”), of $248.4 million.

These obligation include $133.8 million related to an APA with the Commonwealth of Australia for the purchase of doses of COVID-19 Vaccine (the “Australia APA”) and $114.6 million related to various other countries.

With respect to the Australia APA, as of March 31, 2025, $31.2 million was classified as current Deferred revenue and $102.6 million was classified as non-current Deferred revenue in our consolidated balance sheet.

In the event that we do not, on or before the relevant contractual deadlines, receive regulatory approval for, and deliver, the seasonally updated COVID-19 vaccine, up to $92.5 million of deferred revenue may become refundable.

Specifically, Australia may cancel doses that are due to be delivered in 2025 if we do not receive regulatory approval for, and deliver, the updated COVID-19 vaccine on or before December 31, 2025, and may terminate the Australia APA, as amended, if we do not receive regulatory approval for, and deliver, the updated COVID-19 vaccine on or before March 31, 2026.

With respect to other obligations under APAs of $114.6 million, as of March 31, 2025, $38.4 million was classified as current Deferred revenue, $49.8 million was classified as non-current Deferred revenue in our consolidated balance sheet and $26.4 million remains to be billed upon delivery of doses of COVID-19 Vaccine.

Recognition of these amounts is dependent on delivery of doses or expiry of optional dose order quantities.

In March 2025, we received a communication (the “Notice”) terminating, with immediate effect, our 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”).

As a result of the termination, we were required under the terms of the Canada APA, to repay $28.0 million in advanced purchase payments

previously received within 30 days of the Notice, which we repaid in March 2025.

We recognized $575.7 million, previously in deferred revenue and other liabilities, as product revenue in the first quarter of 2025.

In March 2025, we and the Pharmaceutical Management Agency (“Pharmac”), a New Zealand Crown entity, executed a Deed of Settlement and Release (“New Zealand Settlement Agreement”) of its APA (the “New Zealand APA”).

As part of the New Zealand Settlement Agreement, we agreed to pay Pharmac a refund of previously received upfront payments of $4.0 million, which was paid in March 2025 .

Under the New Zealand Settlement Agreement, we have no remaining obligation to Pharmac under the New Zealand APA.

We recognized $27.3 million as product revenue in the first quarter of 2025.

In November 2024, we entered into a settlement 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”), pursuant to which we and the Authority agreed to terminate the Amended and Restated Supply Agreement with the Authority and to fully settle the outstanding amount under dispute related to upfront payments of $112.5 million.

We agreed to pay a refund of $123.8 million including interest of $11.3 million to the Authority in equal quarterly installments of $10.3 million over a three year period, ending in June 2027.

As of March 31, 2025, pursuant to our settlement agreement with the UK, the remaining upfront payment previously received from the authority is classified as $36.9 million of other current liabilities and $49.3 million of Other non-current liabilities on our consolidated balance sheet.

In February 2024, we and Gavi entered into a Termination and Settlement Agreement (the “Gavi Settlement Agreement”) terminating our APA with Gavi (the “Gavi APA”).

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 an additional credit of up to $225 million that may be applied against certain qualifying sales.

As of March 31, 2025, 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, $80.0 million in Other current liabilities, and $240.0 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.

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 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 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.

Unless otherwise earlier terminated, the SLS Supply Agreement will expire on the later of June 30, 2028 or two years after the expiration or termination of the last firm purchase order under the SLS Supply Agreement.

Either party may terminate the SLS Supply Agreement if the other party commits a material breach of the SLS Supply Agreement that is not timely cured or is not curable.

The SLS Supply Agreement contains certain customary representations and warranties of the parties along with certain customary covenants, including confidentiality and indemnity provisions.

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

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.

As of March 31, 2025, we had $746.6 million in cash and cash equivalents, restricted cash and marketable securities as compared to $938.2 million as of December 31, 2024.

We funded our operations for the three months ended March 31, 2025 primarily with cash and cash equivalents, milestone payments under the Sanofi CLA and revenue from product sales.

In accordance with our ongoing Restructuring Plan, we continue to restructure our global footprint including further reductions in our global workforce and exploring the use of our real estate portfolio in Gaithersburg, Maryland.

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,

The following table summarizes cash flows for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

2025 2024 Change

4 unchanged sentences

Effect on exchange rate on cash, cash equivalents, and restricted cash (930) (2,955) 2,025

Net increase (decrease) in cash, cash equivalents, and restricted cash

Net decrease in cash, cash equivalents, and restricted cash

(266,812) (87,874) (178,938)

1 unchanged sentence

Cash, cash equivalents, and restricted cash at end of period $ 278,480 $ 495,936 $ (217,456)

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.

Net cash used in operating activities was $185.5 million for the three months ended March 31, 2025, as compared to $83.6 million for the same period in 2024.

The increase in cash used in operating activities is primarily due to a reduction in cash received from receivables on APA agreements in 2025 as compared to the same period in 2024.

Net cash used in investing activities was $73.3 million for the three months ended March 31, 2025, as compared to $7.3 million for the same period in 2024.

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 $264.0 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.

Net cash used in financing activities was $7.1 million for the three months ended March 31, 2025, as compared to net cash provided by financing activities of $5.9 million for the same period in 2024.

The increase in cash used in financing activities is primarily due to a decrease in net proceeds from sales of common stock, the exercise of stock-based awards, and payment of finance lease liabilities.

Going Concern

1 unchanged sentence

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