What changed in this filing

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Item 1A. Risk Factors

2025-05-08 compared with 2024-11-12 · 62 added, 35 removed, 5 unchanged (95% of the section changed)

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

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

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

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

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

“Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 27, 2025.

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

Risks Related to Our Financial Condition and Capital Requirements

Our existing funding and supply agreements or our advance purchase agreements do not assure success of our vaccine candidates or vaccines or that we will be able to fully fund our vaccine candidates or vaccines or our company operations, and if we are unable to satisfy the performance obligations under such agreements, the agreements may be terminated, the purchase commitments may be reduced or we may be required to refund advanced payments.

We have entered into, an d may in the future enter into supply agreements (also sometimes referred to as advance purchase agreements) for our COVID-19 Vaccine that include prepayments from the purchasers to help fund our development and manufacture of the vaccine.

Under certain supply agreements, if we do not timely achieve requisite regulatory milestones for our COVID-19 Vaccine in the relevant jurisdictions, obtain supportive recommendations from governmental advisory committees, and/or achieve product volume or delivery timing obligations, purchasers may seek to terminate such agreements, reduce their purchase commitments, require us to refund all or some prepayments we have received, or renegotiate such agreements, each of which could have a material and adverse effect on our financial condition.

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 in place of prototype vaccine under certain of our supply agreements.

Our existing funding and supply agreements, including the Sanofi CLA, or our advance purchase agreements do not assure success of our vaccine candidates or vaccines or that we will be able to fully fund our vaccine candidates or vaccines or our company operations, and if we are unable to satisfy the performance obligations under such agreements, we may not be eligible to receive milestone payments under such agreements, the agreements may be terminated, the purchase commitments may be reduced or we may be required to refund advance payments, which may have a material adverse effect on our liquidity and financial condition.

We have entered into, an d may in the future enter into, collaboration, funding, supply and other agreements for our vaccines or vaccine candidates that include prepayments from the purchasers to help fund our development, manufacture and/or commercialization of the vaccine.

Certain of these agreements may contain development, technology transfer, launch, sales and other milestones related to our vaccines or vaccine candidates pursuant to which we may be eligible to receive milestone payments upon the achievement of the requisite milestone.

For example, we are eligible to receive future milestone payments under the Sanofi CLA totaling up to $650 million consisting of $300 million related to COVID-19 Vaccine Products and $350 million related to influenza-COVID-19 combination products.

Such future milestones include a payment of $175 million upon the approval of the BLA marketing authorization for a COVID-19 Vaccine Product in a pre-filled syringe from the U.S.

FDA, $25 million upon the transfer of such approval to Sanofi, $25 million upon the transfer of EMA approval of a COVID-19 Vaccine Product in a pre-filled syringe to Sanofi, $75 million upon the completion of the technology transfer of our manufacturing process for the COVID-19 Vaccine Products to Sanofi, and up to $350 million in CIC Product-related development and launch milestones.

In addition, 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.

We may experience challenges in satisfying our obligations under these agreements, including as a result of delays in, or failure to receive, regulatory approval, delayed performance of our third-party contractors and suppliers, which may impact our ability to achieve such milestones, and receive related milestone payments, may potentially expose us to damages or other liability pursuant to these agreements, including the Sanofi CLA, and may have a material and adverse effect on our liquidity and financial condition.

Under certain APAs, if we do not timely achieve requisite regulatory milestones for our COVID-19 Vaccine in the relevant jurisdictions, obtain supportive recommendations from governmental advisory committees, and/or achieve product volume or delivery timing obligations, purchasers may seek to terminate such agreements, reduce their purchase commitments, require us to refund all or some prepayments we have received, or renegotiate such agreements, each of which could have a material and adverse effect on our liquidity and financial condition.

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

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

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

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

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

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

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

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

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

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

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.

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 its COVID-19 Vaccine using bulk antigen produced at BMC on or before December 31, 2024 .

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

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

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

For example, in December 2024, we entered into an amendment to the Australia APA pursuant to which, among other things, we acknowledged the cancellation by Australia of the delivery of certain doses of our COVID-19 Vaccine scheduled for delivery between the fourth quarter of 2023 and the fourth quarter of 2025 and we agreed to credit approximately $31 million of the advanced payment paid by Australia to us against outstanding invoices and invoices for the future delivery of approximately 3 million doses of COVID-19 Vaccine without requiring additional cash payments.

In addition, the amendment provides for certain remedies for Australia, including return of unused credit, cancellation of doses, or termination of the Australia APA, in the event we miss or under deliver doses to Australia or fail to receive regulatory approval of a variant COVID-19 vaccine.

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.

The amendment also provides Australia with the right to cancel doses if we fail to timely notify Australia of changes to our commercialization plans.

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.

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 with respect to the Australia APA on our consolidated balance sheet, which will be recognized in product revenue as doses are delivered to Australia.

For additional information on the terms of our existing APAs and termination of our prior APAs, see Part I, Item 2.

“ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity Matters and Capital Resources — Supply Agreements.”

We may fail to obtain regulatory approval for our prototype vaccine and for NVX-CoV2601 or for our other current or future product candidates on a timely basis or to comply with our continuing regulatory obligations if approval is obtained.

In the U.S., we submitted a BLA for our prototype vaccine and NVX-CoV2601, and the U.S.

FDA notified us that our BLA was accepted for review with a PDUFA date of April 1, 2025.

Subsequent to the PDUFA date, 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 which has altered our anticipated approval timeline and may materially alter our anticipated timeline for achievement of development and commercialization milestones.

While we have responded to the FDA’s most recent information request with a proposed study design, there is no guarantee that we will not receive further information requests or that there will not be further delay in the U.S.

FDA’s approval, which may, among other impacts, jeopardize our ability to file a supplemental application with the U.S.

FDA for an updated strain in time for the upcoming 2025-2026 vaccination season.

Further, the U.S.

FDA may not agree with our proposed study design, or may require that the PMC be designed in a manner that makes the performance of the PMC difficult or costly, and we may never receive approval for prototype vaccine and NVX-CoV2601.

Fluctuations in U.S.

FDA funding, staffing, resources, priorities, and practices under the current administration, which are outside of our control, may lead to variations and challenges in the review process, timeline and outcomes.

Delays in obtaining regulatory approval, including regulatory decisions impacting labeling, approval or authorization, including the scope of the indicated population, product dosage, manufacturing processes, shelf life, safety and/or other matters, can be extremely costly in terms of lost sales opportunities, loss of any potential marketing advantage of being early to market and increased clinical trial costs.

For example, we did not receive emergency use authorization from the U.S.

FDA for our XBB Vaccine for the 2023-2024 vaccination season until several weeks after our competitors, and we were unable to accomplish the timely validation of the single-dose vial or pre-filled syringe presentation we had intended to use with our XBB Vaccine in the U.S.

for the 2023-2024 vaccination season, which resulted in our use of a five dose vial presentation for 2023-2024 vaccination season, which we believe harmed our financial condition and results of operations.

Further, even after a product is approved and launched, we may remain subject to significant restrictions on the indicated uses or marketing of our product and ongoing requirements for potentially costly post-approval studies.

For example, the holder of an approved BLA must monitor and report adverse events and monitor and report any failure of a product to meet the specifications in the BLA, and obtain FDA approval for certain changes to the approved product, product labeling, or manufacturing process.

General usage or post-marketing clinical trials may identify safety, efficacy, or other previously unknown problems with the product, or manufacturing issues may emerge.

Any of the foregoing may result in regulatory approvals being suspended, limited to narrow the scope of the approval, or revoked, which may otherwise prevent intended commercialization which in turn, would harm our financial condition and results of operations.

In addition, certain of our APAs and supply agreements may be terminated by the counterparty if we do not timely achieve requisite regulatory approval for our COVID-19 Vaccine in the relevant jurisdictions under such agreements, which may harm our financial condition and results of operations.

See Risk Factor entitled “ —Our existing collaboration, funding and supply agreements or our advance purchase agreements do not assure success of our vaccine candidates or vaccines or that we will be able to fully fund our vaccine candidates or vaccines or our company operations, and if we are unable to satisfy the performance obligations under such agreements, we may not be eligible to receive milestone payments under such agreements, the agreements may be terminated, the purchase commitments may be reduced or we may be required to refund advanced payments, which may have a material adverse effect on our liquidity and financial condition.

” The speed with which we begin and complete the preclinical studies necessary to begin clinical trials, the clinical trials themselves and our applications for marketing approval will depend on several factors, including the following:

• our ability to scale-up and maintain manufacturing capability that reproducibly generates consistent yields of product with required purity, potency and quality;

that such scale-up occurs on a timely basis;

and that we have access to sufficient quantities of materials for use in necessary preclinical studies and clinical trials;

• regulatory authority review and approval of proposed clinical trial protocols;

• approval of clinical trials protocols and informed consent forms by institutional review boards responsible for overseeing the ethical conduct of the trial;

• the rate of participant enrollment and retention, which is a function of many factors, including the size of the participant population, the proximity of participants to clinical sites, the eligibility criteria for the clinical trial and the nature of the protocol;

• unfavorable test results or side effects experienced by clinical trial participants;

• analysis of data obtained from preclinical and clinical activities, which are susceptible to varying interpretations and which interpretations could delay, limit, result in the suspension or termination of, or prevent further conduct of clinical studies or regulatory approval;

• the availability of skilled and experienced staff to conduct and monitor clinical trials and to prepare the appropriate regulatory applications;

• changes in the policies of regulatory authorities for drug or vaccine development and approval during the period of product development, including, but not limited to, as a result of the change in presidential administration and leadership of the Department of Health and Human Services in January 2025.

We have somewhat limited experience in conducting and managing the preclinical studies and clinical trials necessary to obtain regulatory marketing approvals.

We may not be permitted to continue or commence additional clinical trials.

We also face the risk that the results of our clinical trials may be inconsistent with the results obtained in preclinical studies or clinical trials of similar products or that the results obtained in later phases of clinical trials may be inconsistent with those obtained in earlier phases.

A number of companies in the biotechnology and product development industry have suffered significant setbacks in advanced clinical trials, even after experiencing promising results in early animal and human testing.

Regulatory agencies may require us or our collaborators to delay, restrict or discontinue clinical trials on various grounds, including a finding that the participants are being exposed to an unacceptable health risk.

In addition, we or our collaborators may be unable to submit applications to regulatory agencies within the time frame we currently expect.

Once submitted, applications must be approved by various regulatory agencies before we or our collaborators can commercialize the product described in the application.

All statutes and regulations governing the conduct of clinical trials are subject to change in the future, which could affect the cost of such clinical trials.

Any unanticipated costs or delays in our clinical trials or regulatory submissions could delay our ability to generate revenue and harm our financial condition and results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors