NOVAVAX INC — Call Transcript 2026

Session with Novavax. My name is Alec Stranahan. I cover SMid biotech at Bank of America, and I'm the analyst covering Novavax. It's my pleasure to introduce and be joined here by John Jacobs, President and Chief Executive Officer of Novavax, as well as Jim Kelly, Chief Financial Officer. Guys, thanks for being here again. Thanks for having us here. Thanks. It's always a pleasure. Yeah, great. Looking forward to the conversation. Maybe just at a high level, you've completely executed the pivot from a vertically integrated COVID vaccine company to a technology platform business essentially built around partnering Matrix-M. Obviously, you've got the Sanofi milestones and royalties from COVID. I guess, what are the most important proof points that demonstrate the new strategy is working, and are there any aspects to your strategy you believe the market may be underappreciating? Thank you for the question. You know, we couldn't be more excited about where we're taking the company right now. We launched this new strategy, Alec, as you know, January of last year. You know, the first proof point really is this remarkable level of interest that we're seeing in our technology from third parties who understand the vaccine and even the oncology immunotherapeutic space really, really well. Some of those proof points include the Pfizer deal, which we announced in January of this year, that was about a year into launching the strategy. We have a lot of different irons in the fire, a lot of attempts to get new partnering going, and having a lot of success behind the scenes on progress there, Pfizer being the first fully announced licensed deal, and you saw all the metrics around that, and then followed by, just in the first trimester of this year, four additional MTAs, these material transfer agreements, where we provide Matrix-M for clinical research to potential partners who prove out in their own laboratories, much of which we've shared with them already behind the scenes from our own experiments in generating data with our R&D team, which is the precursor step to maybe having a potential deal, a licensing deal coming from that. In fact, one of those new MTAs was with a top 10 pharmaceutical company globally, but also a globally ranked oncology company, and they're gonna be studying antibiotic-resistant bacterial infections, viral infections, as well as a myriad of oncology targets using Matrix-M, and we would look forward to potentially turning that into a significant licensing deal. We also have some smaller biotechs that are innovative that have signed MTAs with us that could turn into licensing deals on the oncology side. Overall, you know, we finally, this earnings call, shared the cumulative results of the last 17 months or so under this strategy. Through partners and with Novavax, we're currently under assessment or the potential to assess 30+ unique fields. across infectious disease and oncology with our Matrix-M adjuvant through the hands of partners. That represents over 50% of the projected global opportunity in infectious disease and oncology vaccines as projected by McKinsey & Company and Evaluate Pharma by the early 2030s. That's quite remarkable. Even more remarkable is amongst those 30+ fields that are unique, many of them have more than 1 potential partner assessing in these high-value competitive markets. Really excited about the probability of success that might afford the company as we move forward with the strategy and what it means regarding level of interest. Your second question was what might be underestimated or not fully understood yet about the strategy, and a couple of things. I think, first and foremost, the strategy enables Novavax, when successful, to pull forward revenue and cash, whereas it might take five, six, seven, eight years or more to do that if we were doing a traditional approach of everything on our own, from the lab all the way through successful clinical development to launch, and having to maintain the infrastructure and the cost to do so before you earn $1. In the construct of the type of deals we're forming, we're eligible for upfront payments, milestones for clinical development efforts of partners. If a partner were to put three or four or five assets into clinical development, we have the opportunity to earn along the way milestone payments for their efforts, even if some of those efforts don't succeed. For those that do, even larger potential milestones upon approval and sales, and potentially decades of royalties to come without the cost and the infrastructure needed to carry that. That may be underappreciated, and also the fact that this allows us to amplify the potential impact of our tech, and our employees actually are really passionate about this, and they chose Novavax for a reason. They could choose to go somewhere else if they want to. They're good and smart people. We believe our tech has the chance to leave quite a legacy for human public health, and we can really amplify that impact, not only from a value perspective, but from a human perspective by leveraging the capital of these other companies. There's no way Novavax on its own could have brought forward 30-plus assessments on these fields across oncology and ID. Right. Right. By ourselves. Yeah. I, and, you know, you've described a compounding dynamic where partners who initially explore Matrix-M under the MTAs consistently come back requesting expanded access in additional fields or a full license. I guess, what specifically are partners seeing in their preclinical experiments that is the biggest driver for conversion? Jim, you wanna comment? Well, well, certainly. As I describe this, I think one of the first things I would emphasize is the proof is in the actual new agreements or MTAs we describe. For example, most recently, we mentioned we had some MTA existing collaborator who came back to us and said, "Hey, based on our internal experiments, we want 9 more. We want the right to experiment in 9 more." We're watching that happen. What we do in our cycle with these potential collaborators is we quite often will take data in our own labs with their antigens alongside our Matrix-M and say, "This is what we're seeing." They in turn say, "That's great, you know what? I wanna do it myself. Yeah. That's fine. That makes perfect sense, and they run those experiments themselves, and as a part of the validation process, and as they bring more scientists internally and get them involved, their interest expands. That's what we're seeing. By the time we get to a deal, Jim, right, it's based upon some fundamental data and initial early research that's been done to support potential of success there, the potential to unlock potentially billions in value depending on the market being targeted, where it might not have been possible before with that potential partner. That makes sense. I guess as you're expanding the Matrix-M number of licensees, is there a template that's formed, or is it flexible based on the partner's needs? How are you sort of structuring? Certainly flexible based on the partner, but I think what you see are those core components that are part of the deal, Alec. Those components could include upfront payments, milestones for clinical development. Again, we'd like to pull and intend to pull cash and value forward on the timeline, where it might have taken many years for Novavax and a high level of spend to get there if we did it all on our own, monetize this technology now, and then in the future, have a larger pool of potential resource to pull from, assuming success. Upfronts, milestones for clinical development, milestones for sales and approvals, and then royalties usually for more than a decade, a couple of decades plus, so very exciting. Yeah. In fact, that royalty term that you've seen supply now twice with Matrix-M. Yeah Initially in the Sanofi. Yeah Agreement and most recently with Pfizer, where we are receiving, and I'll use the Pfizer example, high mid-single digit royalties for 20 years. All right? 20 years from the first sale on a country-by-country basis. That's profound, right? The amount of value, we tried to map and outline that type of value that can be created. The shorthand for it is, for each $1 billion in sales on average over a 20-year period, we receive $1 billion in royalties. If you sell $2 billion, we get cumulative $2 billion, $3 and $3. That's exceptional. Being able to have market leaders like Sanofi and Pfizer do the experiments. Determine that this deal structure is worth their while says a ton about the value of that technology. Yeah. I think an important point to mention is that these are non-exclusive access to Matrix M Yeah Meaning you can license the same adjuvant to multiple partners targeting even the same disease. I guess, what sort of was the thought process here to follow this approach to partnering Matrix-M? Probability of success. Yeah. Right. If we have, let's say in a hypothetical, you have a large competitive marketplace, we had 3 partners in this hypothetical example competing in that particular space, all 3 of whom start clinical programs with our Matrix-M on their targets, on their assets. We could earn upfronts from all 3, regardless of who succeeds in the end, even if none succeed in the end. Potential milestone payments for the clinical development pathways for all 3 along the way. If even one of them succeeds, larger sales milestones and royalties for potentially decades to come. Let's say all 3 succeed in one example. In that example, if there are three, maybe there's a fourth that didn't do a deal with us for some reason. Maybe they'll come to the table after that when they see what Matrix can do. Let's say there's 4 or 5 assets out there in a particular space, and 3 of them are with Matrix. Well, Yeah, 4. Good odds. We happen to be sitting in Las Vegas, though I'm not a gambler, but I don't think you'll find 75% odds anywhere in that kind of example. We like the increased probability of success, Alec, the ability to embolden everyone in a certain space for the best possible outcome for patients and for value. Yeah. You mentioned that, you know, these are potentially decades-long royalty streams. I guess when you think about the long-term IP moat that you've built around Matrix-M- Yeah How do you maintain this and even build upon it over the coming years? Certainly. With respect to the first comment about the 20-year royalties, that's irrespective of IP. Just be clear. You, we get that no matter what. When you say, "All right. What's the competitive moat?" As you put it, 3 key factors: IP, trade secrets, and then this safety database, an ever-growing safety database, over 30 million individual patient exposures, really tough to replicate. In terms of the IP, we have existing or pending patents out through the 2040s, and on the trade secrets front, that's one of the critical things in biotechnology. And we're making sure that we guard that appropriately 'cause we believe that is gonna be one of the core important mechanisms. To have that competitive moat. It is because we have these in place, that's the reason why you're seeing these deals being done the way they are with the 20 year. Yeah. John, you mentioned the recent Matrix-M and MTA with a top 10 global pharma company. Looking forward to finding out who that is. It's also a global leader in oncology. Yes. Right? What does Matrix-M offer, I guess, mechanistically in an oncology context? Without getting into details there, eventually that will become apparent to everyone who that is and what they may be working on, you know, the chance to enhance immunity and we believe potentially turn cold tumors warm or warm tumors hot. This is quite exciting, how they do that with their particular assets is going to be a guarded secret for a while. I'll let Jim add a little more commentary here. I think one thing that's important to understand is in this new model. There's less that we're able to share about that type of thing because we're under NDA with these potential partners and partners. We're going to guard their confidential secrets very carefully. Our credibility is part of our currency right now in the new Novavax, and so there's a lot we'll know that we can't tell you. That's the case in any public company when you're having this style of, but certainly more so even in this case until it can be unveiled. Jim, any other thoughts on Matrix in oncology? I think that while we'll go into a little bit mechanistically here, the reality is, it is when you see the large oncology players seeking to use Matrix-M, you are being told it has relevance and utility, potential, and really looking forward to advancing these discussions. All right. What's happening in oncology, John, you know, that's exactly right. It's about making tumors recognizable, right? How that antigen, right, cross presentation works, type of immune response, and can you create that anti-tumor immunity. That's it. That's the end game. Matrix-M, we believe, has the ability to enhance- That effort. You're beginning to see partners who are asking themselves that same question, "How might we leverage Matrix-M in that, in that environment? That's an area of significant projected growth in immunotherapeutics and vaccines in the future. The vaccines market's already $57 billion or so and growing to over 60 by these projections from McKinsey and others. There's a larger growth engine relatively in that immunotherapeutic and vaccine space in oncology as well in a $100 billion plus market, to have over 50% of that combined market now under the umbrella of potential assessment through partners and this new strategy is pretty exciting. Yeah. you know, obviously we'll have some pretty important card flips in that space with Inducmerian- Yes, over time. Others coming up. Shifting gears to the Sanofi partnership, COVID, the kick, you signed the Sanofi agreement back in 2024. It's crazy to think that it's already been two years. I remember when we were on the stage when you had just announced that a couple of years ago. Yeah, that's right. I guess- It was right around this time. Yeah. Yeah. Yeah, exactly. I guess, could you maybe remind us of the full scope of that agreement and the key next steps and catalysts? Yeah. I think, Jim, you can cover that really well, but one thing right before we get there perhaps is to make a note of at the time, where Novavax was right before that deal, Alec, right? We had our own global infrastructure, fully integrated company with commercial teams spending hundreds of millions of dollars a year on infrastructure and manufacturing and strain change selection and sales force and marketing and retail negotiations and all of those things. We're really struggling as a small biotech taking on these large companies like Pfizer and the like in this arena to sell our COVID vaccine. By doing the Sanofi deal and putting our precious NUVAXOVID in their hands, we were able to monetize that asset for Novavax to the tune of over $800 million to date on that deal for our COVID vaccine. In addition, we were able to significantly reduce our expense platform to the tune of hundreds of millions of dollars on top of that each year for the last two years. If you think about the scope of that, we monetized our COVID vaccine to the tune of well over $1 billion in costs not expended, plus cash, non-dilutive cash, into the company instead of trying to do that ourselves. Imagine then, what type of market share would we have had to achieve as a small innovator against these other competitors who were well-entrenched and ahead of us in the market in order to cover all of those expenses and generate that kind of revenue. I think a pretty important move on our part to do that, and now we see Sanofi leaning in with the COMPARE data starting this season, really being a full, first full cycle. We're under a licensure of BLA in the U.S. market. They can do full retail negotiations and begin, we believe, to methodically penetrate that market. Jim, regarding the overall scope of the Sanofi deal, anything you'd want to add on the potential that still remains, which is quite remarkable ahead? Certainly. Three pieces to that agreement, the NUVAXOVID, the ability to use NUVAXOVID in combination products like CIC, and then finally, real broad utility and use of Matrix in new vaccine development. On NUVAXOVID, beyond the royalties, right, royalties, high teens, low 20s, that's fantastic. We have a remaining milestone, $75 million, that we're eligible for upon the completion of a manufacturing tech transfer. That's a nice outstanding item. In our catalyst map, you've got both of those, the fall performance and of course the milestone achievement. As you look at the combination products, we've got the ability to earn a high single digit, low, sub-teen royalties on a combination product that we think could be just an incredible player in a large market. Just to clarify, flu market about $6 billion globally, COVID, $5-6 billion. You know, this combination market, what's it gonna be? Is it gonna take a third, a half of those independent markets and put them into one? You know, the market research would show that there is a high desire for a combination product. Sanofi, when it comes to the premium priced, enhanced flu vaccines, they got 2/3 market share. That is the exact type of market that you'd be looking for when you combine that franchise with Nuvaxovid. We are thrilled to be a partner with Sanofi. Really look forward with where they're going there. In terms of milestone catalysts, okay, $125 million eligible upon the initiation of a phase III in either the U.S. or Europe, and then a $225 million upon U.S. launch, right, and sale. All right, where are we? So far they announced their phase I, II data, great R&D day back in December, where they showed exceptional results, positive, and the conviction, high probability to show non-inferiority against, you know, against the independents, taken independently. Meaning, like for example, you're familiar Europe just approved the combination vaccine on immune immunogenicity. Okay, that would lead you down the path to saying, "Hey, Sanofi's feeling confident that they've got data that would be supportive of that type of path." We're awaiting hearing next steps. We think that even the update from Sanofi on their intended next steps for U.S. and Europe are gonna be important catalysts, and then that's the monetary implications on the back end. Yeah. In terms of milestones. This Matrix-M component, $200 million in development and sales-based milestone per new vaccine, and single-digit royalties for 20 years. This could become the backbone, for example, of some of their development efforts. Yeah. That's a less discussed element, Jim, of that Sanofi arrangement and partnership that we have, right, Alec? The focus has been rightfully on the near term opportunities there, driving COVID into the marketplace, potentially initiating those clinical trials for CIC in the U.S. or Europe where we would be eligible for the $125 million milestone on that initiation, et cetera. That's very exciting. What we haven't talked about as much, and is worth a refresh, is that third leg of the stool, if you will, in the Sanofi partnership. We talk a lot about these new MTAs and the 30+. Sanofi has unfettered access to Matrix-M. They don't tend to discuss their pre-clinical pipeline quite readily in the public domain, but you can imagine they're interested in Matrix-M and know what it can do, and it's not necessarily included in what we've already shared on total fields covered on what they're doing with it. To Jim's point, any new assets they would bring forward to full development and start to sell were eligible for $200 million or so in sales milestones and then royalties for decades to come. That's pretty exciting on the longer term potential of that deal, let alone what's right before us here with COVID and CIC. it's almost like a MTA kind of. Correct Into that. Right. Baked into it, and really the first of them, if you will. Yeah. Yeah. In a recent example. Exactly The pandemic flu. Yeah. Uh, so- Yeah Sanofi recently picked up a BARDA contract, bringing their H5N1. They brought in Matrix-M, right? Part of it. another example of that, when you're looking to innovate and you want to get a great vaccine, give serious consideration to layering on- That was an amendment we made to the agreement. We had not originally included the ability. Sure For them to put Matrix into their flu vaccine for a pandemic purposes. They came back and asked us after learning even more about the adjuvant. We granted that and made that amendment, that we believe helped facilitate the win of that grant, so. Yeah. No, that's great. I you know, on the, on the combination vaccine, I think the Ncomvax approval in the EU probably is good incentive for Sanofi to, you know, try to protect their flu mono franchise in the EU. It also gives them good precedent for what it will take to be approved. I think we'll see what happens in the U.S., right? I think Moderna's still figuring that out. We'll see if their flu mono gets approved. Sure You know, how the regulator approaches their combo as well. You have your own combo. You also have rights to the Sanofi one. Right You guys have optionality there. Yes, we do. Maybe on the commercial setup, with Sanofi leading the charge this year, the phase IV COMPARE study, you know, ran actually Nuvaxovid head-to-head against Moderna's mNEXSPIKE. With stat sig on all the pre-specified endpoints, fewer side effects was the key takeaway. Does Sanofi use that in their advertisements this year? Now, they can, right, since it's been published. How do you think that feeds into their commercialization strategy? If and how they apply that data, whether it's this year or later, what is being tipped here in terms of commercial positioning is the great tolerability profile of Nuvaxovid. I mean, it's crystal clear, right? When they highlighted the results, stat sig, right, no question. Much better tolerability profile, but importantly, twice as many participants said. That's key, consumer feedback. I would definitely take this NUVAXOVID again next year," as compared to the Moderna. Yeah. That's a critical point. This echoes what we saw when we ran our own study of NUVAXOVID against Pfizer and BioNTech. Again, great profile of NUVAXOVID. Much better safety reactogenicity. That's core to the positioning. You've got a proven efficacious vaccine, but in the end, consumer choice and tolerability gotta matter. Mm-hmm. Well, I was actually in this room yesterday, and I was talking to someone who very proudly told me that he was one of the original adopters of NUVAXOVID. He was part of the clinical study, and he, like, patted his arm and puffed his chest. He was excited to have been part of that clinical trial. Fantastic. Great to hear. You definitely have some stickiness it seems like with the product. I wanna ask one question on the rest of the pipeline, I think, on the early stage pipeline including C. diff, then we can maybe talk about the cogs and expenses and Sort of how that's tracking, going forward to close out. I guess what is your R&D investment strategy at this point? How do you balance internal vaccine development versus generating data for partnerships? You know, what would you consider advancing a candidate yourself to late stage or to market? That's a great, it's a great question. First of all, you know, we've made it clear that our strategy has 2 key pillars, and one of those is out-licensing our tech. The other is that R&D engine, that innovation is critical. We're not just a company that is out-licensing something we've already got. If so, we could even reduce further. We've already greatly reduced our costs and have a new target. Jim can talk about that when we get into the financials. We're maintaining core capabilities in R&D, Alec. The purpose is to rotate into preclinical development a series of targets. We started at the beginning of last year with the launch of the strategy with VZV or shingles, RSV, right, and C. difficile. Very important. We were pleased, very pleased with the results in all 3 preclinical pre-IND. What we selected is C. diff to move forward for potential human trial. We're in tox studies now. We intend to meet with regulators on the IND. We could be as early as 2027 in the clinic with that asset. Why C. diff? Why not RSV and shingles if that data was good? You know, our goal is to bring the maximum value inflection. RSV is already a crowded market. A lot of companies are working on an RSV if they don't have one out there already. The market is currently capped at a certain value based on boostability and other factors that have played into that on the regulatory front. We believe we've already reached that point of reasonable value inflection in our own strategy, and that if Novavax did choose to spend our precious dollars in human trials, we wouldn't get the return you'd expect from bringing our own RSV forward, cause we wouldn't intend to build the commercial infrastructure around that and launch it. It's for partnering purposes. It's already sits where it needs to be. Same thing with shingles. With C. diff, what you see is Pfizer out there, and we really hope they succeed. We have confidence in Pfizer. They're a current partner. We're not disclosing what they're working on, but we do hope they succeed and build that market, and we could be the second product in that particular market. If we were, and we thought we have something that's clearly differentiated. Better Something that has the potential to be differentiated better should it continue to succeed and meet what we've seen already in the lab, that's a very interesting play. That could have significant value inflection. You see companies like CureVac, companies like Vaxcyte, for instance, right, who have the next mousetrap coming along in an established larger marketplace with big players. It's that type of an opportunity that we would seek to bring into human trial because that could be a significant value pivot and is well worth the investment to go into phase I with. Puts us in a better position to partner it. If that data turns out even better than we might expect to see it, perhaps we keep that a bit longer and continue to invest in that. Any other thoughts, Jim, on R&D strategy? You know, in the end, it's as you described it. It's just incredible market opportunities. Very selective. Big medical need. Very selective, but with a differentiated asset. Every time we generate data in a differentiated way. That's it. For an individual asset, it has a ripple effect through all of our partnering. We're seeing that every time we're running experiments. The agreements and value creation you've seen to date could not happen without the R&D effort that continues to create this data. Our understanding about the value of our own tech continues to grow with these experiments. It's a feedback loop where what we learn in the preclinical arena feeds the business development discussions, creating new ideas and opportunities for partnering, new data sets for those partners to take a look at and adjust their own experiments with. We also get the data that these partners or potential partners through the MTA collaborations are generating. Now, we're not allowed to share that, right? We're under NDA with those partners. We can see the data that a Pfizer or a Sanofi may be generating through some of these arrangements where appropriate. That helps to fuel our own insights on the tech as well. Maintaining those capabilities matters in R&D for us. Right. Right. I guess when we think about the, you know, the 2028 vision, you've talked about the non-GAAP expense target, $150 million-$200 million. That's more than a 50% reduction versus last year. Yeah. You've guided to non-GAAP profitability potentially as early as 2028. I guess what are sort of the aspects contemplated, within that, and how is everything tracking versus your expectations? Yeah. It's been an incredible journey over the last few years and I know you've heard us and John talk on our calls about since the peak of the pandemic, you know, this target would take us almost 90% down in our R&D and SG&A. When it comes to our balance sheet, the unwind, right, in this transition, fully integrated. Billions of doses a year, you know, over $2 billion reduction in our current liability. We fundamentally changed the company. Our cash runway, we said we got cash runway into 2028, and that's before any new cash flows from deals coming into the company. Also in 2028, as early as 2028, non-GAAP profitability, you know, the key levers on that, and just to give you what a break even could look like, we're targeting midpoint of the range, $175 million R&D and SG&A. I'll just stock-based comp assume that's $25 million or so. You got about $150 million break even. You're looking at key contributors from Nuvaxovid royalties, right? You're looking at, Sanofi advancement of milestones and even royalties potentially on, the CIC programs, and then additional opportunities for milestones and upfronts. From our new deals. You're seeing, especially this year, you saw the $30 million up front, and you're seeing the activity. You've got a potential to have contribution across all of these. Those are the levers that we're looking at as we look at 2028. Frankly, that's an interesting time and milestone. Yeah. What we wanna do is throw off cash as a company. With a lean operating model across a diversified top line that is orders of magnitude higher than our cost structure, and create exceptional shareholder value while we're developing vaccines that matter for people. Yeah. Great. Very proud of our team on that success, Jim. Because it's, you know, my prior company, we built something up. I was the third employee hired, and we took the company public and launched a billion-dollar neuroscience asset there, and it was quite a successful ride. I found now coming to Novavax the last three years, having to unwind a company. From $1.7 billion SG&A and R&D expenses down to 90% less than that by 2028 is our projection, while maintaining our talent, not having turnover that was any greater than industry average on the people we wanna keep maintaining our capabilities, while delivering that rapid declination in size, scope, scale, selling factories, parking lots, planters, lab equipment, right? Saying goodbye to people that had a passion for this company, that's hard to do, you know? If you can't do it, you can't be a leader, but if you ever enjoy it, you shouldn't be a leader. Really hard to say goodbye to these great people. We did it. We delivered on our prior obligations all along the way. We put the company in a position based on that to launch this new strategy and now drive toward long-term value creation. We're really through that first chapter and a half of that pivot. Well on our way now. We hope everyone sees by the progress we've made in this new strategy the exponential increase in our technology from third parties who are in this space. We're always conservative and careful not to overpromise. It's biotech, it has risk, but we can promise our full effort and continued diligence on driving down this path for long-term value creation. We've got an amazing tech. We wanna share it with the world. We intend to do so. Right? Very well said. Thanks I think that's a great note to end on. Please join me in thanking. Thanks for joining everyone. Jim for the time. All right. Thanks, you guys.

Speaker 1: Session with Novavax. My name is Alec Stranahan. I cover SMid biotech at Bank of America, and I'm the analyst covering Novavax. It's my pleasure to introduce and be joined here by John Jacobs, President and Chief Executive Officer of Novavax, as well as Jim Kelly, Chief Financial Officer. Guys, thanks for being here again. Session with Novavax. session with novavax My name is Alec Stranahan. my name is alec stranahan I cover SMid biotech at Bank of America, and I'm the analyst covering Novavax. i cover smid biotech at bank of america and i'm the analyst covering novavax It's my pleasure to introduce and be joined here by John Jacobs, President and Chief Executive Officer of Novavax, as well as Jim Kelly, Chief Financial Officer. it's my pleasure to introduce and be joined here by john jacobs president and chief executive officer of novavax as well as jim kelly chief financial officer Guys, thanks for being here again. guys thanks for being here again

Speaker 3: Thanks for having us here. Thanks for having us here. thanks for having us here

Speaker 2: Thanks. Thanks. thanks

Speaker 3: It's always a pleasure. It's always a pleasure. it's always a pleasure

Speaker 1: Yeah, great. Looking forward to the conversation. Maybe just at a high level, you've completely executed the pivot from a vertically integrated COVID vaccine company to a technology platform business essentially built around partnering Matrix-M. Obviously, you've got the Sanofi milestones and royalties from COVID. I guess, what are the most important proof points that demonstrate the new strategy is working, and are there any aspects to your strategy you believe the market may be underappreciating? Yeah, great. yeah great Looking forward to the conversation. looking forward to the conversation Maybe just at a high level, you've completely executed the pivot from a vertically integrated COVID vaccine company to a technology platform business essentially built around partnering Matrix-M. maybe just at a high level you've completely executed the pivot from a vertically integrated covid vaccine company to a technology platform business essentially built around partnering matrix-m Obviously, you've got the Sanofi milestones and royalties from COVID. obviously you've got the sanofi milestones and royalties from covid I guess, what are the most important proof points that demonstrate the new strategy is working, and are there any aspects to your strategy you believe the market may be underappreciating? i guess what are the most important proof points that demonstrate the new strategy is working and are there any aspects to your strategy you believe the market may be underappreciating

Speaker 3: Thank you for the question. You know, we couldn't be more excited about where we're taking the company right now. We launched this new strategy, Alec, as you know, January of last year. You know, the first proof point really is this remarkable level of interest that we're seeing in our technology from third parties who understand the vaccine and even the oncology immunotherapeutic space really, really well. Some of those proof points include the Pfizer deal, which we announced in January of this year, that was about a year into launching the strategy. Thank you for the question. thank you for the question You know, we couldn't be more excited about where we're taking the company right now. you know we couldn't be more excited about where we're taking the company right now We launched this new strategy, Alec, as you know, January of last year. we launched this new strategy alec as you know january of last year You know, the first proof point really is this remarkable level of interest that we're seeing in our technology from third parties who understand the vaccine and even the oncology immunotherapeutic space really, really well. you know the first proof point really is this remarkable level of interest that we're seeing in our technology from third parties who understand the vaccine and even the oncology immunotherapeutic space really really well Some of those proof points include the Pfizer deal, which we announced in January of this year, that was about a year into launching the strategy. some of those proof points include the pfizer deal which we announced in january of this year that was about a year into launching the strategy We have a lot of different irons in the fire, a lot of attempts to get new partnering going, and having a lot of success behind the scenes on progress there, Pfizer being the first fully announced licensed deal, and you saw all the metrics around that, and then followed by, just in the first trimester of this year, four additional MTAs, these material transfer agreements, where we provide Matrix-M for clinical research to potential partners who prove out in their own laboratories, much of which we've shared with them already behind the scenes from our own experiments in generating data with our R&D team, which is the precursor step to maybe having a potential deal, a licensing deal coming from that. We have a lot of different irons in the fire, a lot of attempts to get new partnering going, and having a lot of success behind the scenes on progress there, Pfizer being the first fully announced licensed deal, and you saw all the metrics around that, and then followed by, just in the first trimester of this year, four additional MTAs, these material transfer agreements, where we provide Matrix-M for clinical research to potential partners who prove out in their own laboratories, much of which we've shared with them already behind the scenes from our own experiments in generating data with our R&D team, which is the precursor step to maybe having a potential deal, a licensing deal coming from that. we have a lot of different irons in the fire a lot of attempts to get new partnering going and having a lot of success behind the scenes on progress there pfizer being the first fully announced licensed deal and you saw all the metrics around that and then followed by just in the first trimester of this year four additional mtas these material transfer agreements where we provide matrix-m for clinical research to potential partners who prove out in their own laboratories much of which we've shared with them already behind the scenes from our own experiments in generating data with our r&d team which is the precursor step to maybe having a potential deal a licensing deal coming from that In fact, one of those new MTAs was with a top 10 pharmaceutical company globally, but also a globally ranked oncology company, and they're gonna be studying antibiotic-resistant bacterial infections, viral infections, as well as a myriad of oncology targets using Matrix-M, and we would look forward to potentially turning that into a significant licensing deal. We also have some smaller biotechs that are innovative that have signed MTAs with us that could turn into licensing deals on the oncology side. Overall, you know, we finally, this earnings call, shared the cumulative results of the last 17 months or so under this strategy. Through partners and with Novavax, we're currently under assessment or the potential to assess 30+ unique fields. In fact, one of those new MTAs was with a top 10 pharmaceutical company globally, but also a globally ranked oncology company, and they're gonna be studying antibiotic-resistant bacterial infections, viral infections, as well as a myriad of oncology targets using Matrix-M, and we would look forward to potentially turning that into a significant licensing deal. in fact one of those new mtas was with a top 10 pharmaceutical company globally but also a globally ranked oncology company and they're gonna be studying antibiotic-resistant bacterial infections viral infections as well as a myriad of oncology targets using matrix-m and we would look forward to potentially turning that into a significant licensing deal We also have some smaller biotechs that are innovative that have signed MTAs with us that could turn into licensing deals on the oncology side. we also have some smaller biotechs that are innovative that have signed mtas with us that could turn into licensing deals on the oncology side Overall, you know, we finally, this earnings call, shared the cumulative results of the last 17 months or so under this strategy. overall you know we finally this earnings call shared the cumulative results of the last 17 months or so under this strategy Through partners and with Novavax, we're currently under assessment or the potential to assess 30+ unique fields. through partners and with novavax we're currently under assessment or the potential to assess 30+ unique fields across infectious disease and oncology with our Matrix-M adjuvant through the hands of partners. That represents over 50% of the projected global opportunity in infectious disease and oncology vaccines as projected by McKinsey & Company and Evaluate Pharma by the early 2030s. That's quite remarkable. Even more remarkable is amongst those 30+ fields that are unique, many of them have more than 1 potential partner assessing in these high-value competitive markets. Really excited about the probability of success that might afford the company as we move forward with the strategy and what it means regarding level of interest. Your second question was what might be underestimated or not fully understood yet about the strategy, and a couple of things. across infectious disease and oncology with our Matrix-M adjuvant through the hands of partners. across infectious disease and oncology with our matrix-m adjuvant through the hands of partners That represents over 50% of the projected global opportunity in infectious disease and oncology vaccines as projected by McKinsey & Company and Evaluate Pharma by the early 2030s. that represents over 50% of the projected global opportunity in infectious disease and oncology vaccines as projected by mckinsey & company and evaluate pharma by the early 2030s That's quite remarkable. that's quite remarkable Even more remarkable is amongst those 30+ fields that are unique, many of them have more than 1 potential partner assessing in these high-value competitive markets. even more remarkable is amongst those 30+ fields that are unique many of them have more than 1 potential partner assessing in these high-value competitive markets Really excited about the probability of success that might afford the company as we move forward with the strategy and what it means regarding level of interest. really excited about the probability of success that might afford the company as we move forward with the strategy and what it means regarding level of interest Your second question was what might be underestimated or not fully understood yet about the strategy, and a couple of things. your second question was what might be underestimated or not fully understood yet about the strategy and a couple of things I think, first and foremost, the strategy enables Novavax, when successful, to pull forward revenue and cash, whereas it might take five, six, seven, eight years or more to do that if we were doing a traditional approach of everything on our own, from the lab all the way through successful clinical development to launch, and having to maintain the infrastructure and the cost to do so before you earn $1. In the construct of the type of deals we're forming, we're eligible for upfront payments, milestones for clinical development efforts of partners. If a partner were to put three or four or five assets into clinical development, we have the opportunity to earn along the way milestone payments for their efforts, even if some of those efforts don't succeed. I think, first and foremost, the strategy enables Novavax, when successful, to pull forward revenue and cash, whereas it might take five, six, seven, eight years or more to do that if we were doing a traditional approach of everything on our own, from the lab all the way through successful clinical development to launch, and having to maintain the infrastructure and the cost to do so before you earn $1. i think first and foremost the strategy enables novavax when successful to pull forward revenue and cash whereas it might take five six seven eight years or more to do that if we were doing a traditional approach of everything on our own from the lab all the way through successful clinical development to launch and having to maintain the infrastructure and the cost to do so before you earn $1 In the construct of the type of deals we're forming, we're eligible for upfront payments, milestones for clinical development efforts of partners. in the construct of the type of deals we're forming we're eligible for upfront payments milestones for clinical development efforts of partners If a partner were to put three or four or five assets into clinical development, we have the opportunity to earn along the way milestone payments for their efforts, even if some of those efforts don't succeed. if a partner were to put three or four or five assets into clinical development we have the opportunity to earn along the way milestone payments for their efforts even if some of those efforts don't succeed For those that do, even larger potential milestones upon approval and sales, and potentially decades of royalties to come without the cost and the infrastructure needed to carry that. That may be underappreciated, and also the fact that this allows us to amplify the potential impact of our tech, and our employees actually are really passionate about this, and they chose Novavax for a reason. They could choose to go somewhere else if they want to. They're good and smart people. We believe our tech has the chance to leave quite a legacy for human public health, and we can really amplify that impact, not only from a value perspective, but from a human perspective by leveraging the capital of these other companies. There's no way Novavax on its own could have brought forward 30-plus assessments on these fields across oncology and ID. For those that do, even larger potential milestones upon approval and sales, and potentially decades of royalties to come without the cost and the infrastructure needed to carry that. for those that do even larger potential milestones upon approval and sales and potentially decades of royalties to come without the cost and the infrastructure needed to carry that That may be underappreciated, and also the fact that this allows us to amplify the potential impact of our tech, and our employees actually are really passionate about this, and they chose Novavax for a reason. that may be underappreciated and also the fact that this allows us to amplify the potential impact of our tech and our employees actually are really passionate about this and they chose novavax for a reason They could choose to go somewhere else if they want to. they could choose to go somewhere else if they want to They're good and smart people. they're good and smart people We believe our tech has the chance to leave quite a legacy for human public health, and we can really amplify that impact, not only from a value perspective, but from a human perspective by leveraging the capital of these other companies. we believe our tech has the chance to leave quite a legacy for human public health and we can really amplify that impact not only from a value perspective but from a human perspective by leveraging the capital of these other companies There's no way Novavax on its own could have brought forward 30-plus assessments on these fields across oncology and ID. there's no way novavax on its own could have brought forward 30-plus assessments on these fields across oncology and id

Speaker 1: Right. Right. Right. right Right. right

Speaker 3: By ourselves. By ourselves. by ourselves

Speaker 1: Yeah. I, and, you know, you've described a compounding dynamic where partners who initially explore Matrix-M under the MTAs consistently come back requesting expanded access in additional fields or a full license. I guess, what specifically are partners seeing in their preclinical experiments that is the biggest driver for conversion? Yeah. yeah I, and, you know, you've described a compounding dynamic where partners who initially explore Matrix-M under the MTAs consistently come back requesting expanded access in additional fields or a full license. i and you know you've described a compounding dynamic where partners who initially explore matrix-m under the mtas consistently come back requesting expanded access in additional fields or a full license I guess, what specifically are partners seeing in their preclinical experiments that is the biggest driver for conversion? i guess what specifically are partners seeing in their preclinical experiments that is the biggest driver for conversion

Speaker 3: Jim, you wanna comment? Jim, you wanna comment? jim you wanna comment

Speaker 2: Well, well, certainly. As I describe this, I think one of the first things I would emphasize is the proof is in the actual new agreements or MTAs we describe. For example, most recently, we mentioned we had some MTA existing collaborator who came back to us and said, "Hey, based on our internal experiments, we want 9 more. We want the right to experiment in 9 more." We're watching that happen. What we do in our cycle with these potential collaborators is we quite often will take data in our own labs with their antigens alongside our Matrix-M and say, "This is what we're seeing." They in turn say, "That's great, you know what? I wanna do it myself. Well, well, certainly. well well certainly As I describe this, I think one of the first things I would emphasize is the proof is in the actual new agreements or MTAs we describe. as i describe this i think one of the first things i would emphasize is the proof is in the actual new agreements or mtas we describe For example, most recently, we mentioned we had some MTA existing collaborator who came back to us and said, "Hey, based on our internal experiments, we want 9 more. for example most recently we mentioned we had some mta existing collaborator who came back to us and said "hey based on our internal experiments we want 9 more We want the right to experiment in 9 more." We're watching that happen. we want the right to experiment in 9 more." we're watching that happen What we do in our cycle with these potential collaborators is we quite often will take data in our own labs with their antigens alongside our Matrix-M and say, "This is what we're seeing." They in turn say, "That's great, you know what? what we do in our cycle with these potential collaborators is we quite often will take data in our own labs with their antigens alongside our matrix-m and say "this is what we're seeing." they in turn say "that's great you know what I wanna do it myself. i wanna do it myself

Speaker 3: Yeah. Yeah. yeah

Speaker 2: That's fine. That makes perfect sense, and they run those experiments themselves, and as a part of the validation process, and as they bring more scientists internally and get them involved, their interest expands. That's what we're seeing. That's fine. that's fine That makes perfect sense, and they run those experiments themselves, and as a part of the validation process, and as they bring more scientists internally and get them involved, their interest expands. that makes perfect sense and they run those experiments themselves and as a part of the validation process and as they bring more scientists internally and get them involved their interest expands That's what we're seeing. that's what we're seeing

Speaker 3: By the time we get to a deal, Jim, right, it's based upon some fundamental data and initial early research that's been done to support potential of success there, the potential to unlock potentially billions in value depending on the market being targeted, where it might not have been possible before with that potential partner. By the time we get to a deal, Jim, right, it's based upon some fundamental data and initial early research that's been done to support potential of success there, the potential to unlock potentially billions in value depending on the market being targeted, where it might not have been possible before with that potential partner. by the time we get to a deal jim right it's based upon some fundamental data and initial early research that's been done to support potential of success there the potential to unlock potentially billions in value depending on the market being targeted where it might not have been possible before with that potential partner

Speaker 1: That makes sense. I guess as you're expanding the Matrix-M number of licensees, is there a template that's formed, or is it flexible based on the partner's needs? How are you sort of structuring? That makes sense. that makes sense I guess as you're expanding the Matrix-M number of licensees, is there a template that's formed, or is it flexible based on the partner's needs? i guess as you're expanding the matrix-m number of licensees is there a template that's formed or is it flexible based on the partner's needs How are you sort of structuring? how are you sort of structuring

Speaker 3: Certainly flexible based on the partner, but I think what you see are those core components that are part of the deal, Alec. Those components could include upfront payments, milestones for clinical development. Again, we'd like to pull and intend to pull cash and value forward on the timeline, where it might have taken many years for Novavax and a high level of spend to get there if we did it all on our own, monetize this technology now, and then in the future, have a larger pool of potential resource to pull from, assuming success. Upfronts, milestones for clinical development, milestones for sales and approvals, and then royalties usually for more than a decade, a couple of decades plus, so very exciting. Certainly flexible based on the partner, but I think what you see are those core components that are part of the deal, Alec. certainly flexible based on the partner but i think what you see are those core components that are part of the deal alec Those components could include upfront payments, milestones for clinical development. those components could include upfront payments milestones for clinical development Again, we'd like to pull and intend to pull cash and value forward on the timeline, where it might have taken many years for Novavax and a high level of spend to get there if we did it all on our own, monetize this technology now, and then in the future, have a larger pool of potential resource to pull from, assuming success. again we'd like to pull and intend to pull cash and value forward on the timeline where it might have taken many years for novavax and a high level of spend to get there if we did it all on our own monetize this technology now and then in the future have a larger pool of potential resource to pull from assuming success Upfronts, milestones for clinical development, milestones for sales and approvals, and then royalties usually for more than a decade, a couple of decades plus, so very exciting. upfronts milestones for clinical development milestones for sales and approvals and then royalties usually for more than a decade a couple of decades plus so very exciting

Speaker 1: Yeah. Yeah. yeah

Speaker 2: In fact, that royalty term that you've seen supply now twice with Matrix-M. In fact, that royalty term that you've seen supply now twice with Matrix-M. in fact that royalty term that you've seen supply now twice with matrix-m

Speaker 3: Yeah Yeah yeah

Speaker 2: Initially in the Sanofi. Initially in the Sanofi. initially in the sanofi

Speaker 3: Yeah Yeah yeah

Speaker 2: Agreement and most recently with Pfizer, where we are receiving, and I'll use the Pfizer example, high mid-single digit royalties for 20 years. Agreement and most recently with Pfizer, where we are receiving, and I'll use the Pfizer example, high mid-single digit royalties for 20 years. agreement and most recently with pfizer where we are receiving and i'll use the pfizer example high mid-single digit royalties for 20 years All right? 20 years from the first sale on a country-by-country basis. That's profound, right? All right? 20 years from the first sale on a country-by-country basis. all right 20 years from the first sale on a country-by-country basis That's profound, right? that's profound right The amount of value, we tried to map and outline that type of value that can be created. The shorthand for it is, for each $1 billion in sales on average over a 20-year period, we receive $1 billion in royalties. If you sell $2 billion, we get cumulative $2 billion, $3 and $3. That's exceptional. Being able to have market leaders like Sanofi and Pfizer do the experiments. The amount of value, we tried to map and outline that type of value that can be created. the amount of value we tried to map and outline that type of value that can be created The shorthand for it is, for each $1 billion in sales on average over a 20-year period, we receive $1 billion in royalties. the shorthand for it is for each $1 billion in sales on average over a 20-year period we receive $1 billion in royalties If you sell $2 billion, we get cumulative $2 billion, $3 and $3. if you sell $2 billion we get cumulative $2 billion $3 and $3 That's exceptional. that's exceptional Being able to have market leaders like Sanofi and Pfizer do the experiments. being able to have market leaders like sanofi and pfizer do the experiments Determine that this deal structure is worth their while says a ton about the value of that technology. Determine that this deal structure is worth their while says a ton about the value of that technology. determine that this deal structure is worth their while says a ton about the value of that technology

Speaker 1: Yeah. I think an important point to mention is that these are non-exclusive access to Matrix M Yeah. yeah I think an important point to mention is that these are non-exclusive access to Matrix M i think an important point to mention is that these are non-exclusive access to matrix m

Speaker 3: Yeah Yeah yeah

Speaker 1: Meaning you can license the same adjuvant to multiple partners targeting even the same disease. I guess, what sort of was the thought process here to follow this approach to partnering Matrix-M? M eaning you can license the same adjuvant to multiple partners targeting even the same disease. m eaning you can license the same adjuvant to multiple partners targeting even the same disease I guess, what sort of was the thought process here to follow this approach to partnering Matrix-M? i guess what sort of was the thought process here to follow this approach to partnering matrix-m

Speaker 3: Probability of success. Probability of success. probability of success

Speaker 1: Yeah. Yeah. yeah

Speaker 3: Right. If we have, let's say in a hypothetical, you have a large competitive marketplace, we had 3 partners in this hypothetical example competing in that particular space, all 3 of whom start clinical programs with our Matrix-M on their targets, on their assets. We could earn upfronts from all 3, regardless of who succeeds in the end, even if none succeed in the end. Potential milestone payments for the clinical development pathways for all 3 along the way. If even one of them succeeds, larger sales milestones and royalties for potentially decades to come. Let's say all 3 succeed in one example. Right. right If we have, let's say in a hypothetical, you have a large competitive marketplace, we had 3 partners in this hypothetical example competing in that particular space, all 3 of whom start clinical programs with our Matrix-M on their targets, on their assets. if we have let's say in a hypothetical you have a large competitive marketplace we had 3 partners in this hypothetical example competing in that particular space all 3 of whom start clinical programs with our matrix-m on their targets on their assets We could earn upfronts from all 3, regardless of who succeeds in the end, even if none succeed in the end. we could earn upfronts from all 3 regardless of who succeeds in the end even if none succeed in the end Potential milestone payments for the clinical development pathways for all 3 along the way. potential milestone payments for the clinical development pathways for all 3 along the way If even one of them succeeds, larger sales milestones and royalties for potentially decades to come. if even one of them succeeds larger sales milestones and royalties for potentially decades to come Let's say all 3 succeed in one example. let's say all 3 succeed in one example In that example, if there are three, maybe there's a fourth that didn't do a deal with us for some reason. Maybe they'll come to the table after that when they see what Matrix can do. Let's say there's 4 or 5 assets out there in a particular space, and 3 of them are with Matrix. Well, Yeah, 4. Good odds. In that example, if there are three, maybe there's a fourth that didn't do a deal with us for some reason. in that example if there are three maybe there's a fourth that didn't do a deal with us for some reason Maybe they'll come to the table after that w hen they see what Matrix can do. maybe they'll come to the table after that w hen they see what matrix can do Let's say there's 4 or 5 assets out there in a particular space, and 3 of them are with Matrix. let's say there's 4 or 5 assets out there in a particular space and 3 of them are with matrix Well, Yeah, 4. well yeah 4 Good odds. good odds We happen to be sitting in Las Vegas, though I'm not a gambler, but I don't think you'll find 75% odds anywhere in that kind of example. We like the increased probability of success, Alec, the ability to embolden everyone in a certain space for the best possible outcome for patients and for value. We happen to be sitting in Las Vegas, though I'm not a gambler, but I don't think you'll find 75% odds anywhere in that kind of example. we happen to be sitting in las vegas though i'm not a gambler but i don't think you'll find 75% odds anywhere in that kind of example We like the increased probability of success, Alec, the ability to embolden everyone in a certain space for the best possible outcome for patients and for value. we like the increased probability of success alec the ability to embolden everyone in a certain space for the best possible outcome for patients and for value

Speaker 1: Yeah. You mentioned that, you know, these are potentially decades-long royalty streams. I guess when you think about the long-term IP moat that you've built around Matrix-M- Yeah. yeah You mentioned that, you know, these are potentially decades-long royalty streams. you mentioned that you know these are potentially decades-long royalty streams I guess when you think about the long-term IP moat that you've built around Matrix-M- i guess when you think about the long-term ip moat that you've built around matrix-m-

Speaker 3: Yeah Yeah yeah

Speaker 1: How do you maintain this and even build upon it over the coming years? How do you maintain this and even build upon it over the coming years? how do you maintain this and even build upon it over the coming years

Speaker 2: Certainly. With respect to the first comment about the 20-year royalties, that's irrespective of IP. Just be clear. You, we get that no matter what. When you say, "All right. What's the competitive moat?" As you put it, 3 key factors: IP, trade secrets, and then this safety database, an ever-growing safety database, over 30 million individual patient exposures, really tough to replicate. In terms of the IP, we have existing or pending patents out through the 2040s, and on the trade secrets front, that's one of the critical things in biotechnology. And we're making sure that we guard that appropriately 'cause we believe that is gonna be one of the core important mechanisms. Certainly. certainly With respect to the first comment about the 20-year royalties, that's irrespective of IP. with respect to the first comment about the 20-year royalties that's irrespective of ip Just be clear. just be clear You, we get that no matter what. you we get that no matter what When you say, "All right. when you say "all right What's the competitive moat?" As you put it, 3 key factors: IP, trade secrets, and then this safety database, an ever-growing safety database, over 30 million individual patient exposures, really tough to replicate. what's the competitive moat?" as you put it 3 key factors ip trade secrets and then this safety database an ever-growing safety database over 30 million individual patient exposures really tough to replicate In terms of the IP, we have existing or pending patents out through the 2040s, and on the trade secrets front, that's one of the critical things in biotechnology. in terms of the ip we have existing or pending patents out through the 2040s and on the trade secrets front that's one of the critical things in biotechnology And we're making sure that we guard that appropriately 'cause we believe that is gonna be one of the core important mechanisms. and we're making sure that we guard that appropriately 'cause we believe that is gonna be one of the core important mechanisms To have that competitive moat. It is because we have these in place, that's the reason why you're seeing these deals being done the way they are with the 20 year. To have that competitive moat. to have that competitive moat It is because we have these in place, that's the reason why you're seeing these deals being done the way they are with the 20 year. it is because we have these in place that's the reason why you're seeing these deals being done the way they are with the 20 year

Speaker 1: Yeah. John, you mentioned the recent Matrix-M and MTA with a top 10 global pharma company. Looking forward to finding out who that is. It's also a global leader in oncology. Yeah. yeah John, you mentioned the recent Matrix-M and MTA with a top 10 global pharma company. john you mentioned the recent matrix-m and mta with a top 10 global pharma company Looking forward to finding out who that is. looking forward to finding out who that is It's also a global leader in oncology. it's also a global leader in oncology

Speaker 3: Yes. Yes. yes

Speaker 1: Right? What does Matrix-M offer, I guess, mechanistically in an oncology context? Right? right What does Matrix-M offer, I guess, mechanistically in an oncology context? what does matrix-m offer i guess mechanistically in an oncology context

Speaker 3: Without getting into details there, eventually that will become apparent to everyone who that is and what they may be working on, you know, the chance to enhance immunity and we believe potentially turn cold tumors warm or warm tumors hot. This is quite exciting, how they do that with their particular assets is going to be a guarded secret for a while. I'll let Jim add a little more commentary here. I think one thing that's important to understand is in this new model. There's less that we're able to share about that type of thing because we're under NDA with these potential partners and partners. We're going to guard their confidential secrets very carefully. Without getting into details there, eventually that will become apparent to everyone who that is and what they may be working on, you know, the chance to enhance immunity and we believe potentially turn cold tumors warm or warm tumors hot. without getting into details there eventually that will become apparent to everyone who that is and what they may be working on you know the chance to enhance immunity and we believe potentially turn cold tumors warm or warm tumors hot This is quite exciting, how they do that with their particular assets is going to be a guarded secret for a while. this is quite exciting how they do that with their particular assets is going to be a guarded secret for a while I'll let Jim add a little more commentary here. i'll let jim add a little more commentary here I think one thing that's important to understand is in this new model. There's less that we're able to share about that type of thing because we're under NDA with these potential partners and partners. i think one thing that's important to understand is in this new model. there's less that we're able to share about that type of thing because we're under nda with these potential partners and partners We're going to guard their confidential secrets very carefully. we're going to guard their confidential secrets very carefully Our credibility is part of our currency right now in the new Novavax, and so there's a lot we'll know that we can't tell you. That's the case in any public company when you're having this style of, but certainly more so even in this case until it can be unveiled. Jim, any other thoughts on Matrix in oncology? Our credibility is part of our currency right now in the new Novavax, and so there's a lot we'll know that we can't tell you. our credibility is part of our currency right now in the new novavax and so there's a lot we'll know that we can't tell you That's the case in any public company when you're having this style of, but certainly more so even in this case until it can be unveiled. that's the case in any public company when you're having this style of but certainly more so even in this case until it can be unveiled Jim, any other thoughts on Matrix in oncology? jim any other thoughts on matrix in oncology

Speaker 2: I think that while we'll go into a little bit mechanistically here, the reality is, it is when you see the large oncology players seeking to use Matrix-M, you are being told it has relevance and utility, potential, and really looking forward to advancing these discussions. All right. What's happening in oncology, John, you know, that's exactly right. It's about making tumors recognizable, right? How that antigen, right, cross presentation works, type of immune response, and can you create that anti-tumor immunity. That's it. That's the end game. Matrix-M, we believe, has the ability to enhance- I think that while we'll go into a little bit mechanistically here, the reality is, it is when you see the large oncology players seeking to use Matrix-M, you are being told it has relevance and utility, potential, and really looking forward to advancing these discussions. i think that while we'll go into a little bit mechanistically here the reality is it is when you see the large oncology players seeking to use matrix-m you are being told it has relevance and utility potential and really looking forward to advancing these discussions All right. all right What's happening in oncology, John, you know, that's exactly right. what's happening in oncology john you know that's exactly right It's about making tumors recognizable, right? it's about making tumors recognizable right How that antigen, right, cross presentation works, type of immune response, and can you create that anti-tumor immunity. how that antigen right cross presentation works type of immune response and can you create that anti-tumor immunity That's it. that's it That's the end game. that's the end game Matrix-M, we believe, has the ability to enhance- matrix-m we believe has the ability to enhance- That effort. You're beginning to see partners who are asking themselves that same question, "How might we leverage Matrix-M in that, in that environment? That effort. that effort You're beginning to see partners who are asking themselves that same question, "How might we leverage Matrix-M in that, in that environment? you're beginning to see partners who are asking themselves that same question "how might we leverage matrix-m in that in that environment

Speaker 3: That's an area of significant projected growth in immunotherapeutics and vaccines in the future. The vaccines market's already $57 billion or so and growing to over 60 by these projections from McKinsey and others. There's a larger growth engine relatively in that immunotherapeutic and vaccine space in oncology as well in a $100 billion plus market, to have over 50% of that combined market now under the umbrella of potential assessment through partners and this new strategy is pretty exciting. That's an area of significant projected growth in immunotherapeutics and vaccines in the future. that's an area of significant projected growth in immunotherapeutics and vaccines in the future The vaccines market's already $57 billion or so and growing to over 60 by these projections from McKinsey and others. the vaccines market's already $57 billion or so and growing to over 60 by these projections from mckinsey and others There's a larger growth engine relatively in that immunotherapeutic and vaccine space in oncology as well in a $100 billion plus market, to have over 50% of that combined market now under the umbrella of potential assessment through partners and this new strategy is pretty exciting. there's a larger growth engine relatively in that immunotherapeutic and vaccine space in oncology as well in a $100 billion plus market to have over 50% of that combined market now under the umbrella of potential assessment through partners and this new strategy is pretty exciting

Speaker 1: Yeah. you know, obviously we'll have some pretty important card flips in that space with Inducmerian- Yeah. you know, obviously we'll have some pretty important card flips in that space with Inducmerian- yeah you know obviously we'll have some pretty important card flips in that space with inducmerian-

Speaker 3: Yes, over time. Yes, over time. yes over time

Speaker 1: Others coming up. Shifting gears to the Sanofi partnership, COVID, the kick, you signed the Sanofi agreement back in 2024. It's crazy to think that it's already been two years. I remember when we were on the stage when you had just announced that a couple of years ago. Others coming up. others coming up Shifting gears to the Sanofi partnership, COVID, the kick, you signed the Sanofi agreement back in 2024. shifting gears to the sanofi partnership covid the kick you signed the sanofi agreement back in 2024 It's crazy to think that it's already been two years. it's crazy to think that it's already been two years I remember when we were on the stage when you had just announced that a couple of years ago. i remember when we were on the stage when you had just announced that a couple of years ago

Speaker 3: Yeah, that's right. Yeah, that's right. yeah that's right

Speaker 1: I guess- I guess- i guess-

Speaker 3: It was right around this time. Yeah. It was right around this time. it was right around this time Yeah. yeah

Speaker 1: Yeah. Yeah, exactly. I guess, could you maybe remind us of the full scope of that agreement and the key next steps and catalysts? Yeah. yeah Yeah, exactly. yeah exactly I guess, could you maybe remind us of the full scope of that agreement and the key next steps and catalysts? i guess could you maybe remind us of the full scope of that agreement and the key next steps and catalysts

Speaker 3: Yeah. I think, Jim, you can cover that really well, but one thing right before we get there perhaps is to make a note of at the time, where Novavax was right before that deal, Alec, right? We had our own global infrastructure, fully integrated company with commercial teams spending hundreds of millions of dollars a year on infrastructure and manufacturing and strain change selection and sales force and marketing and retail negotiations and all of those things. We're really struggling as a small biotech taking on these large companies like Pfizer and the like in this arena to sell our COVID vaccine. Yeah. yeah I think, Jim, you can cover that really well, but one thing right before we get there perhaps is to make a note of at the time, where Novavax was right before that deal, Alec, right? i think jim you can cover that really well but one thing right before we get there perhaps is to make a note of at the time where novavax was right before that deal alec right We had our own global infrastructure, fully integrated company with commercial teams spending hundreds of millions of dollars a year on infrastructure and manufacturing and strain change selection and sales force and marketing and retail negotiations and all of those things. we had our own global infrastructure fully integrated company with commercial teams spending hundreds of millions of dollars a year on infrastructure and manufacturing and strain change selection and sales force and marketing and retail negotiations and all of those things We're really struggling as a small biotech taking on these large companies like Pfizer and the like in this arena to sell our COVID vaccine. we're really struggling as a small biotech taking on these large companies like pfizer and the like in this arena to sell our covid vaccine By doing the Sanofi deal and putting our precious NUVAXOVID in their hands, we were able to monetize that asset for Novavax to the tune of over $800 million to date on that deal for our COVID vaccine. In addition, we were able to significantly reduce our expense platform to the tune of hundreds of millions of dollars on top of that each year for the last two years. If you think about the scope of that, we monetized our COVID vaccine to the tune of well over $1 billion in costs not expended, plus cash, non-dilutive cash, into the company instead of trying to do that ourselves. By doing the Sanofi deal and putting our precious NUVAXOVID in their hands, we were able to monetize that asset for Novavax to the tune of over $800 million to date on that deal for our COVID vaccine. by doing the sanofi deal and putting our precious nuvaxovid in their hands we were able to monetize that asset for novavax to the tune of over $800 million to date on that deal for our covid vaccine In addition, we were able to significantly reduce our expense platform to the tune of hundreds of millions of dollars on top of that each year for the last two years. in addition we were able to significantly reduce our expense platform to the tune of hundreds of millions of dollars on top of that each year for the last two years If you think about the scope of that, we monetized our COVID vaccine to the tune of well over $1 billion in costs not expended, plus cash, non-dilutive cash, into the company instead of trying to do that ourselves. if you think about the scope of that we monetized our covid vaccine to the tune of well over $1 billion in costs not expended plus cash non-dilutive cash into the company instead of trying to do that ourselves Imagine then, what type of market share would we have had to achieve as a small innovator against these other competitors who were well-entrenched and ahead of us in the market in order to cover all of those expenses and generate that kind of revenue. I think a pretty important move on our part to do that, and now we see Sanofi leaning in with the COMPARE data starting this season, really being a full, first full cycle. We're under a licensure of BLA in the U.S. market. They can do full retail negotiations and begin, we believe, to methodically penetrate that market. Jim, regarding the overall scope of the Sanofi deal, anything you'd want to add on the potential that still remains, which is quite remarkable ahead? Imagine then, what type of market share would we have had to achieve as a small innovator against these other competitors who were well-entrenched and ahead of us in the market in order to cover all of those expenses and generate that kind of revenue. imagine then what type of market share would we have had to achieve as a small innovator against these other competitors who were well-entrenched and ahead of us in the market in order to cover all of those expenses and generate that kind of revenue I think a pretty important move on our part to do that, and now we see Sanofi leaning in with the COMPARE data starting this season, really being a full, first full cycle. i think a pretty important move on our part to do that and now we see sanofi leaning in with the compare data starting this season really being a full first full cycle We're under a licensure of BLA in the U.S. market. we're under a licensure of bla in the u.s market They can do full retail negotiations and begin, we believe, to methodically penetrate that market. they can do full retail negotiations and begin we believe to methodically penetrate that market Jim, regarding the overall scope of the Sanofi deal, anything you'd want to add on the potential that still remains, which is quite remarkable ahead? jim regarding the overall scope of the sanofi deal anything you'd want to add on the potential that still remains which is quite remarkable ahead

Speaker 2: Certainly. Three pieces to that agreement, the NUVAXOVID, the ability to use NUVAXOVID in combination products like CIC, and then finally, real broad utility and use of Matrix in new vaccine development. On NUVAXOVID, beyond the royalties, right, royalties, high teens, low 20s, that's fantastic. We have a remaining milestone, $75 million, that we're eligible for upon the completion of a manufacturing tech transfer. That's a nice outstanding item. In our catalyst map, you've got both of those, the fall performance and of course the milestone achievement. Certainly. certainly Three pieces to that agreement, the NUVAXOVID, the ability to use NUVAXOVID in combination products like CIC, and then finally, real broad utility and use of Matrix in new vaccine development. three pieces to that agreement the nuvaxovid the ability to use nuvaxovid in combination products like cic and then finally real broad utility and use of matrix in new vaccine development On NUVAXOVID, beyond the royalties, right, royalties, high teens, low 20s, that's fantastic. on nuvaxovid beyond the royalties right royalties high teens low 20s that's fantastic We have a remaining milestone, $75 million, that we're eligible for upon the completion of a manufacturing tech transfer. we have a remaining milestone $75 million that we're eligible for upon the completion of a manufacturing tech transfer That's a nice outstanding item. that's a nice outstanding item In our catalyst map, you've got both of those, the fall performance and of course the milestone achievement. in our catalyst map you've got both of those the fall performance and of course the milestone achievement As you look at the combination products, we've got the ability to earn a high single digit, low, sub-teen royalties on a combination product that we think could be just an incredible player in a large market. Just to clarify, flu market about $6 billion globally, COVID, $5-6 billion. You know, this combination market, what's it gonna be? Is it gonna take a third, a half of those independent markets and put them into one? You know, the market research would show that there is a high desire for a combination product. As you look at the combination products, we've got the ability to earn a high single digit, low, sub-teen royalties on a combination product that we think could be just an incredible player in a large market. as you look at the combination products we've got the ability to earn a high single digit low sub-teen royalties on a combination product that we think could be just an incredible player in a large market Just to clarify, flu market about $6 billion globally, COVID, $5-6 billion. just to clarify flu market about $6 billion globally covid $5-6 billion You know, this combination market, what's it gonna be? you know this combination market what's it gonna be Is it gonna take a third, a half of those independent markets and put them into one? is it gonna take a third a half of those independent markets and put them into one You know, the market research would show that there is a high desire for a combination product. you know the market research would show that there is a high desire for a combination product Sanofi, when it comes to the premium priced, enhanced flu vaccines, they got 2/3 market share. That is the exact type of market that you'd be looking for when you combine that franchise with Nuvaxovid. We are thrilled to be a partner with Sanofi. Really look forward with where they're going there. In terms of milestone catalysts, okay, $125 million eligible upon the initiation of a phase III in either the U.S. or Europe, and then a $225 million upon U.S. launch, right, and sale. All right, where are we? So far they announced their phase I, II data, great R&D day back in December, where they showed exceptional results, positive, and the conviction, high probability to show non-inferiority against, you know, against the independents, taken independently. Meaning, like for example, you're familiar Europe just approved the combination vaccine on immune immunogenicity. Sanofi, when it comes to the premium priced, enhanced flu vaccines, they got 2/3 market share. sanofi when it comes to the premium priced enhanced flu vaccines they got 2/3 market share That is the exact type of market that you'd be looking for when you combine that franchise with Nuvaxovid. that is the exact type of market that you'd be looking for when you combine that franchise with nuvaxovid We are thrilled to be a partner with Sanofi. we are thrilled to be a partner with sanofi Really look forward with where they're going there. In terms of milestone catalysts, okay, $125 million eligible upon the initiation of a phase III in either the U.S. or Europe, and then a $225 million upon U.S. launch, right, and sale. really look forward with where they're going there. in terms of milestone catalysts okay $125 million eligible upon the initiation of a phase iii in either the u.s or europe and then a $225 million upon u.s launch right and sale All right, where are we? all right where are we So far they announced their phase I, II data, great R&D day back in December, where they showed exceptional results, positive, and the conviction, high probability to show non-inferiority against, you know, against the independents, taken independently. so far they announced their phase i ii data great r&d day back in december where they showed exceptional results positive and the conviction high probability to show non-inferiority against you know against the independents taken independently Meaning, like for example, you're familiar Europe just approved the combination vaccine on immune immunogenicity. meaning like for example you're familiar europe just approved the combination vaccine on immune immunogenicity Okay, that would lead you down the path to saying, "Hey, Sanofi's feeling confident that they've got data that would be supportive of that type of path." We're awaiting hearing next steps. We think that even the update from Sanofi on their intended next steps for U.S. and Europe are gonna be important catalysts, and then that's the monetary implications on the back end. Okay, that would lead you down the path to saying, "Hey, Sanofi's feeling confident that they've got data that would be supportive of that type of path." We're awaiting hearing next steps. okay that would lead you down the path to saying "hey sanofi's feeling confident that they've got data that would be supportive of that type of path." we're awaiting hearing next steps We think that even the update from Sanofi on their intended next steps for U.S. and Europe are gonna be important catalysts, and then that's the monetary implications on the back end. we think that even the update from sanofi on their intended next steps for u.s and europe are gonna be important catalysts and then that's the monetary implications on the back end

Speaker 1: Yeah. Yeah. yeah

Speaker 2: In terms of milestones. This Matrix-M component, $200 million in development and sales-based milestone per new vaccine, and single-digit royalties for 20 years. This could become the backbone, for example, of some of their development efforts. In terms of milestones. in terms of milestones This Matrix-M component, $200 million in development and sales-based milestone per new vaccine, and single-digit royalties for 20 years. this matrix-m component $200 million in development and sales-based milestone per new vaccine and single-digit royalties for 20 years This could become the backbone, for example, of some of their development efforts. this could become the backbone for example of some of their development efforts

Speaker 1: Yeah. Yeah. yeah

Speaker 3: That's a less discussed element, Jim, of that Sanofi arrangement and partnership that we have, right, Alec? The focus has been rightfully on the near term opportunities there, driving COVID into the marketplace, potentially initiating those clinical trials for CIC in the U.S. or Europe where we would be eligible for the $125 million milestone on that initiation, et cetera. That's very exciting. What we haven't talked about as much, and is worth a refresh, is that third leg of the stool, if you will, in the Sanofi partnership. We talk a lot about these new MTAs and the 30+. That's a less discussed element, Jim, of that Sanofi arrangement and partnership that we have, right, Alec? that's a less discussed element jim of that sanofi arrangement and partnership that we have right alec The focus has been rightfully on the near term opportunities there, driving COVID into the marketplace, potentially initiating those clinical trials for CIC in the U.S. or Europe where we would be eligible for the $125 million milestone on that initiation, et cetera. the focus has been rightfully on the near term opportunities there driving covid into the marketplace potentially initiating those clinical trials for cic in the u.s or europe where we would be eligible for the $125 million milestone on that initiation et cetera That's very exciting. that's very exciting What we haven't talked about as much, and is worth a refresh, is that third leg of the stool, if you will, in the Sanofi partnership. what we haven't talked about as much and is worth a refresh is that third leg of the stool if you will in the sanofi partnership We talk a lot about these new MTAs and the 30 +. we talk a lot about these new mtas and the 30 + Sanofi has unfettered access to Matrix-M. They don't tend to discuss their pre-clinical pipeline quite readily in the public domain, but you can imagine they're interested in Matrix-M and know what it can do, and it's not necessarily included in what we've already shared on total fields covered on what they're doing with it. To Jim's point, any new assets they would bring forward to full development and start to sell were eligible for $200 million or so in sales milestones and then royalties for decades to come. Sanofi has unfettered access to Matrix-M. sanofi has unfettered access to matrix-m They don't tend to discuss their pre-clinical pipeline quite readily in the public domain, but you can imagine they're interested in Matrix-M and know what it can do, and it's not necessarily included in what we've already shared on total fields covered on what they're doing with it. they don't tend to discuss their pre-clinical pipeline quite readily in the public domain but you can imagine they're interested in matrix-m and know what it can do and it's not necessarily included in what we've already shared on total fields covered on what they're doing with it To Jim's point, any new assets they would bring forward to full development and start to sell were eligible for $200 million or so in sales milestones and then royalties for decades to come. to jim's point any new assets they would bring forward to full development and start to sell were eligible for $200 million or so in sales milestones and then royalties for decades to come That's pretty exciting on the longer term potential of that deal, let alone what's right before us here with COVID and CIC. That's pretty exciting on the longer term potential of that deal, let alone what's right before us here with COVID and CIC. that's pretty exciting on the longer term potential of that deal let alone what's right before us here with covid and cic

Speaker 1: it's almost like a MTA kind of. it's almost like a MTA kind of. it's almost like a mta kind of

Speaker 3: Correct Correct correct

Speaker 1: Into that. Into that. into that

Speaker 2: Right. Right. right

Speaker 3: Baked into it, and really the first of them, if you will. Yeah. Baked into it, and really the first of them, if you will. baked into it and really the first of them if you will Yeah. yeah

Speaker 1: Yeah. Yeah. yeah

Speaker 2: In a recent example. In a recent example. in a recent example

Speaker 3: Exactly Exactly exactly

Speaker 2: The pandemic flu. The pandemic flu. the pandemic flu

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Uh, so- Uh, so- uh so-

Speaker 1: Yeah Yeah yeah

Speaker 2: Sanofi recently picked up a BARDA contract, bringing their H5N1. They brought in Matrix-M, right? Sanofi recently picked up a BARDA contract, bringing their H5N1. sanofi recently picked up a barda contract bringing their h5n1 They brought in Matrix-M, right? they brought in matrix-m right

Speaker 1: Part of it. Part of it. part of it

Speaker 2: another example of that, when you're looking to innovate and you want to get a great vaccine, give serious consideration to layering on- another example of that, when you're looking to innovate and you want to get a great vaccine, give serious consideration to layering on- another example of that when you're looking to innovate and you want to get a great vaccine give serious consideration to layering on-

Speaker 3: That was an amendment we made to the agreement. We had not originally included the ability. That was an amendment we made to the agreement. that was an amendment we made to the agreement We had not originally included the ability. we had not originally included the ability

Speaker 2: Sure Sure sure

Speaker 3: For them to put Matrix into their flu vaccine for a pandemic purposes. They came back and asked us after learning even more about the adjuvant. We granted that and made that amendment, that we believe helped facilitate the win of that grant, so. For them to put Matrix into their flu vaccine for a pandemic purposes. for them to put matrix into their flu vaccine for a pandemic purposes They came back and asked us after learning even more about the adjuvant. they came back and asked us after learning even more about the adjuvant We granted that and made that amendment, that we believe helped facilitate the win of that grant, so. we granted that and made that amendment that we believe helped facilitate the win of that grant so

Speaker 1: Yeah. No, that's great. I you know, on the, on the combination vaccine, I think the Ncomvax approval in the EU probably is good incentive for Sanofi to, you know, try to protect their flu mono franchise in the EU. It also gives them good precedent for what it will take to be approved. I think we'll see what happens in the U.S., right? I think Moderna's still figuring that out. We'll see if their flu mono gets approved. Yeah. yeah No, that's great. no that's great I you know, on the, on the combination vaccine, I think the Ncomvax approval in the EU probably is good incentive for Sanofi to, you know, try to protect their flu mono franchise in the EU. i you know on the on the combination vaccine i think the ncomvax approval in the eu probably is good incentive for sanofi to you know try to protect their flu mono franchise in the eu It also gives them good precedent for what it will take to be approved. it also gives them good precedent for what it will take to be approved I think we'll see what happens in the U.S., right? i think we'll see what happens in the u.s right I think Moderna's still figuring that out. i think moderna's still figuring that out We'll see if their flu mono gets approved. we'll see if their flu mono gets approved

Speaker 3: Sure Sure sure

Speaker 1: You know, how the regulator approaches their combo as well. You have your own combo. You also have rights to the Sanofi one. You know, how the regulator approaches their combo as well. you know how the regulator approaches their combo as well You have your own combo. you have your own combo You also have rights to the Sanofi one. you also have rights to the sanofi one

Speaker 3: Right Right right

Speaker 1: You guys have optionality there. You guys have optionality there. you guys have optionality there

Speaker 3: Yes, we do. Yes, we do. yes we do

Speaker 1: Maybe on the commercial setup, with Sanofi leading the charge this year, the phase IV COMPARE study, you know, ran actually Nuvaxovid head-to-head against Moderna's mNEXSPIKE. With stat sig on all the pre-specified endpoints, fewer side effects was the key takeaway. Does Sanofi use that in their advertisements this year? Now, they can, right, since it's been published. How do you think that feeds into their commercialization strategy? Maybe on the commercial setup, with Sanofi leading the charge this year, the phase IV COMPARE study, you know, ran actually Nuvaxovid head-to-head against Moderna's mNEXSPIKE. maybe on the commercial setup with sanofi leading the charge this year the phase iv compare study you know ran actually nuvaxovid head-to-head against moderna's mnexspike With stat sig on all the pre-specified endpoints, fewer side effects was the key takeaway. with stat sig on all the pre-specified endpoints fewer side effects was the key takeaway Does Sanofi use that in their advertisements this year? does sanofi use that in their advertisements this year Now, they can, right, since it's been published. now they can right since it's been published How do you think that feeds into their commercialization strategy? how do you think that feeds into their commercialization strategy

Speaker 2: If and how they apply that data, whether it's this year or later, what is being tipped here in terms of commercial positioning is the great tolerability profile of Nuvaxovid. I mean, it's crystal clear, right? When they highlighted the results, stat sig, right, no question. Much better tolerability profile, but importantly, twice as many participants said. If and how they apply that data, whether it's this year or later, what is being tipped here in terms of commercial positioning is the great tolerability profile of Nuvaxovid. if and how they apply that data whether it's this year or later what is being tipped here in terms of commercial positioning is the great tolerability profile of nuvaxovid I mean, it's crystal clear, right? i mean it's crystal clear right When they highlighted the results, stat sig, right, no question. when they highlighted the results stat sig right no question Much better tolerability profile, but importantly, twice as many participants said. much better tolerability profile but importantly twice as many participants said

Speaker 1: That's key, consumer feedback. That's key, consumer feedback. that's key consumer feedback

Speaker 2: I would definitely take this NUVAXOVID again next year," as compared to the Moderna. I would definitely take this NUVAXOVID again next year," as compared to the Moderna. i would definitely take this nuvaxovid again next year," as compared to the moderna

Speaker 1: Yeah. Yeah. yeah

Speaker 2: That's a critical point. This echoes what we saw when we ran our own study of NUVAXOVID against Pfizer and BioNTech. Again, great profile of NUVAXOVID. Much better safety reactogenicity. That's core to the positioning. You've got a proven efficacious vaccine, but in the end, consumer choice and tolerability gotta matter. That's a critical point. that's a critical point This echoes what we saw when we ran our own study of NUVAXOVID against Pfizer and BioNTech. this echoes what we saw when we ran our own study of nuvaxovid against pfizer and biontech Again, great profile of NUVAXOVID. again great profile of nuvaxovid Much better safety reactogenicity. much better safety reactogenicity That's core to the positioning. that's core to the positioning You've got a proven efficacious vaccine, but in the end, consumer choice and tolerability gotta matter. you've got a proven efficacious vaccine but in the end consumer choice and tolerability gotta matter

Speaker 1: Mm-hmm. Well, I was actually in this room yesterday, and I was talking to someone who very proudly told me that he was one of the original adopters of NUVAXOVID. He was part of the clinical study, and he, like, patted his arm and puffed his chest. He was excited to have been part of that clinical trial. Mm-hmm. mm-hmm Well, I was actually in this room yesterday, and I was talking to someone who very proudly told me that he was one of the original adopters of NUVAXOVID. well i was actually in this room yesterday and i was talking to someone who very proudly told me that he was one of the original adopters of nuvaxovid He was part of the clinical study, and he, like, patted his arm and puffed his chest. he was part of the clinical study and he like patted his arm and puffed his chest He was excited to have been part of that clinical trial. he was excited to have been part of that clinical trial

Speaker 3: Fantastic. Fantastic. fantastic

Speaker 1: Great to hear. You definitely have some stickiness it seems like with the product. I wanna ask one question on the rest of the pipeline, I think, on the early stage pipeline including C. diff, then we can maybe talk about the cogs and expenses and Great to hear. great to hear You definitely have some stickiness it seems like with the product. you definitely have some stickiness it seems like with the product I wanna ask one question on the rest of the pipeline, I think, on the early stage pipeline including C. diff, then we can maybe talk about the cogs and expenses and i wanna ask one question on the rest of the pipeline i think on the early stage pipeline including c diff then we can maybe talk about the cogs and expenses and Sort of how that's tracking, going forward to close out. I guess what is your R&D investment strategy at this point? How do you balance internal vaccine development versus generating data for partnerships? You know, what would you consider advancing a candidate yourself to late stage or to market? Sort of how that's tracking, going forward to close out. sort of how that's tracking going forward to close out I guess what is your R&D investment strategy at this point? i guess what is your r&d investment strategy at this point How do you balance internal vaccine development versus generating data for partnerships? how do you balance internal vaccine development versus generating data for partnerships You know, what would you consider advancing a candidate yourself to late stage or to market? you know what would you consider advancing a candidate yourself to late stage or to market

Speaker 3: That's a great, it's a great question. First of all, you know, we've made it clear that our strategy has 2 key pillars, and one of those is out-licensing our tech. The other is that R&D engine, that innovation is critical. We're not just a company that is out-licensing something we've already got. If so, we could even reduce further. We've already greatly reduced our costs and have a new target. Jim can talk about that when we get into the financials. We're maintaining core capabilities in R&D, Alec. The purpose is to rotate into preclinical development a series of targets. We started at the beginning of last year with the launch of the strategy with VZV or shingles, RSV, right, and C. difficile. Very important. We were pleased, very pleased with the results in all 3 preclinical pre-IND. That's a great, it's a great question. that's a great it's a great question First of all, you know, we've made it clear that our strategy has 2 key pillars, and one of those is out-licensing our tech. first of all you know we've made it clear that our strategy has 2 key pillars and one of those is out-licensing our tech The other is that R&D engine, that innovation is critical. the other is that r&d engine that innovation is critical We're not just a company that is out-licensing something we've already got. we're not just a company that is out-licensing something we've already got If so, we could even reduce further. if so we could even reduce further We've already greatly reduced our costs and have a new target. we've already greatly reduced our costs and have a new target Jim can talk about that when we get into the financials. jim can talk about that when we get into the financials We're maintaining core capabilities in R&D, Alec. we're maintaining core capabilities in r&d alec The purpose is to rotate into preclinical development a series of targets. the purpose is to rotate into preclinical development a series of targets We started at the beginning of last year with the launch of the strategy with VZV or shingles, RSV, right, and C. difficile. we started at the beginning of last year with the launch of the strategy with vzv or shingles rsv right and c difficile Very important. very important We were pleased, very pleased with the results in all 3 preclinical pre-IND. we were pleased very pleased with the results in all 3 preclinical pre-ind What we selected is C. diff to move forward for potential human trial. We're in tox studies now. We intend to meet with regulators on the IND. We could be as early as 2027 in the clinic with that asset. Why C. diff? Why not RSV and shingles if that data was good? You know, our goal is to bring the maximum value inflection. RSV is already a crowded market. A lot of companies are working on an RSV if they don't have one out there already. The market is currently capped at a certain value based on boostability and other factors that have played into that on the regulatory front. What we selected is C. diff to move forward for potential human trial. what we selected is c diff to move forward for potential human trial We're in tox studies now. we're in tox studies now We intend to meet with regulators on the IND. we intend to meet with regulators on the ind We could be as early as 2027 in the clinic with that asset. we could be as early as 2027 in the clinic with that asset Why C. diff? why c diff Why not RSV and shingles if that data was good? why not rsv and shingles if that data was good You know, our goal is to bring the maximum value inflection. you know our goal is to bring the maximum value inflection RSV is already a crowded market. rsv is already a crowded market A lot of companies are working on an RSV if they don't have one out there already. a lot of companies are working on an rsv if they don't have one out there already The market is currently capped at a certain value based on boostability and other factors that have played into that on the regulatory front. the market is currently capped at a certain value based on boostability and other factors that have played into that on the regulatory front We believe we've already reached that point of reasonable value inflection in our own strategy, and that if Novavax did choose to spend our precious dollars in human trials, we wouldn't get the return you'd expect from bringing our own RSV forward, cause we wouldn't intend to build the commercial infrastructure around that and launch it. It's for partnering purposes. It's already sits where it needs to be. Same thing with shingles. With C. diff, what you see is Pfizer out there, and we really hope they succeed. We have confidence in Pfizer. They're a current partner. We're not disclosing what they're working on, but we do hope they succeed and build that market, and we could be the second product in that particular market. If we were, and we thought we have something that's clearly differentiated. We believe we've already reached that point of reasonable value inflection in our own strategy, and that if Novavax did choose to spend our precious dollars in human trials, we wouldn't get the return you'd expect from bringing our own RSV forward, cause we wouldn't intend to build the commercial infrastructure around that and launch it. we believe we've already reached that point of reasonable value inflection in our own strategy and that if novavax did choose to spend our precious dollars in human trials we wouldn't get the return you'd expect from bringing our own rsv forward cause we wouldn't intend to build the commercial infrastructure around that and launch it It's for partnering purposes. it's for partnering purposes It's already sits where it needs to be. it's already sits where it needs to be Same thing with shingles. same thing with shingles With C. diff, what you see is Pfizer out there, and we really hope they succeed. with c diff what you see is pfizer out there and we really hope they succeed We have confidence in Pfizer. we have confidence in pfizer They're a current partner. they're a current partner We're not disclosing what they're working on, but we do hope they succeed and build that market, and we could be the second product in that particular market. we're not disclosing what they're working on but we do hope they succeed and build that market and we could be the second product in that particular market If we were, and we thought we have something that's clearly differentiated. if we were and we thought we have something that's clearly differentiated

Speaker 1: Better Better better

Speaker 3: Something that has the potential to be differentiated better should it continue to succeed and meet what we've seen already in the lab, that's a very interesting play. That could have significant value inflection. You see companies like CureVac, companies like Vaxcyte, for instance, right, who have the next mousetrap coming along in an established larger marketplace with big players. It's that type of an opportunity that we would seek to bring into human trial because that could be a significant value pivot and is well worth the investment to go into phase I with. Puts us in a better position to partner it. If that data turns out even better than we might expect to see it, perhaps we keep that a bit longer and continue to invest in that. Any other thoughts, Jim, on R&D strategy? Something that has the potential to be differentiated better should it continue to succeed and meet what we've seen already in the lab, that's a very interesting play. something that has the potential to be differentiated better should it continue to succeed and meet what we've seen already in the lab that's a very interesting play That could have significant value inflection. that could have significant value inflection You see companies like CureVac, companies like Vaxcyte, for instance, right, who have the next mousetrap coming along in an established larger marketplace with big players. you see companies like curevac companies like vaxcyte for instance right who have the next mousetrap coming along in an established larger marketplace with big players It's that type of an opportunity that we would seek to bring into human trial because that could be a significant value pivot and is well worth the investment to go into phase I with. it's that type of an opportunity that we would seek to bring into human trial because that could be a significant value pivot and is well worth the investment to go into phase i with Puts us in a better position to partner it. puts us in a better position to partner it If that data turns out even better than we might expect to see it, perhaps we keep that a bit longer and continue to invest in that. if that data turns out even better than we might expect to see it perhaps we keep that a bit longer and continue to invest in that Any other thoughts, Jim, on R&D strategy? any other thoughts jim on r&d strategy

Speaker 2: You know, in the end, it's as you described it. It's just incredible market opportunities. You know, in the end, it's as you described it. you know in the end it's as you described it It's just incredible market opportunities. it's just incredible market opportunities

Speaker 3: Very selective. Very selective. very selective

Speaker 2: Big medical need. Very selective, but with a differentiated asset. Every time we generate data in a differentiated way. Big medical need. big medical need Very selective, but with a differentiated asset. very selective but with a differentiated asset Every time we generate data in a differentiated way. every time we generate data in a differentiated way That's it. That's it. that's it For an individual asset, it has a ripple effect through all of our partnering. We're seeing that every time we're running experiments. The agreements and value creation you've seen to date could not happen without the R&D effort that continues to create this data. For an individual asset, it has a ripple effect through all of our partnering. for an individual asset it has a ripple effect through all of our partnering We're seeing that every time we're running experiments. we're seeing that every time we're running experiments The agreements and value creation you've seen to date could not happen without the R&D effort that continues to create this data. the agreements and value creation you've seen to date could not happen without the r&d effort that continues to create this data

Speaker 3: Our understanding about the value of our own tech continues to grow with these experiments. It's a feedback loop where what we learn in the preclinical arena feeds the business development discussions, creating new ideas and opportunities for partnering, new data sets for those partners to take a look at and adjust their own experiments with. We also get the data that these partners or potential partners through the MTA collaborations are generating. Now, we're not allowed to share that, right? We're under NDA with those partners. We can see the data that a Pfizer or a Sanofi may be generating through some of these arrangements where appropriate. That helps to fuel our own insights on the tech as well. Maintaining those capabilities matters in R&D for us. Our understanding about the value of our own tech continues to grow with these experiments. our understanding about the value of our own tech continues to grow with these experiments It's a feedback loop where what we learn in the preclinical arena feeds the business development discussions, creating new ideas and opportunities for partnering, new data sets for those partners to take a look at and adjust their own experiments with. it's a feedback loop where what we learn in the preclinical arena feeds the business development discussions creating new ideas and opportunities for partnering new data sets for those partners to take a look at and adjust their own experiments with We also get the data that these partners or potential partners through the MTA collaborations are generating. we also get the data that these partners or potential partners through the mta collaborations are generating Now, we're not allowed to share that, right? now we're not allowed to share that right We're under NDA with those partners. we're under nda with those partners We can see the data that a Pfizer or a Sanofi may be generating through some of these arrangements where appropriate. we can see the data that a pfizer or a sanofi may be generating through some of these arrangements where appropriate That helps to fuel our own insights on the tech as well. that helps to fuel our own insights on the tech as well Maintaining those capabilities matters in R&D for us. maintaining those capabilities matters in r&d for us

Speaker 1: Right. Right. I guess when we think about the, you know, the 2028 vision, you've talked about the non-GAAP expense target, $150 million-$200 million. That's more than a 50% reduction versus last year. Right. right Right. right I guess when we think about the, you know, the 2028 vision, you've talked about the non-GAAP expense target, $150 million-$200 million. i guess when we think about the you know the 2028 vision you've talked about the non-gaap expense target $150 million-$200 million That's more than a 50% reduction versus last year. that's more than a 50% reduction versus last year

Speaker 3: Yeah. Yeah. yeah

Speaker 1: You've guided to non-GAAP profitability potentially as early as 2028. I guess what are sort of the aspects contemplated, within that, and how is everything tracking versus your expectations? You've guided to non-GAAP profitability potentially as early as 2028. you've guided to non-gaap profitability potentially as early as 2028 I guess what are sort of the aspects contemplated, within that, and how is everything tracking versus your expectations? i guess what are sort of the aspects contemplated within that and how is everything tracking versus your expectations

Speaker 2: Yeah. It's been an incredible journey over the last few years and I know you've heard us and John talk on our calls about since the peak of the pandemic, you know, this target would take us almost 90% down in our R&D and SG&A. When it comes to our balance sheet, the unwind, right, in this transition, fully integrated. Yeah. yeah It's been an incredible journey over the last few years and I know you've heard us and John talk on our calls about since the peak of the pandemic, you know, this target would take us almost 90% down in our R&D and SG&A. it's been an incredible journey over the last few years and i know you've heard us and john talk on our calls about since the peak of the pandemic you know this target would take us almost 90% down in our r&d and sg&a When it comes to our balance sheet, the unwind, right, in this transition, fully integrated. when it comes to our balance sheet the unwind right in this transition fully integrated Billions of doses a year, you know, over $2 billion reduction in our current liability. We fundamentally changed the company. Our cash runway, we said we got cash runway into 2028, and that's before any new cash flows from deals coming into the company. Also in 2028, as early as 2028, non-GAAP profitability, you know, the key levers on that, and just to give you what a break even could look like, we're targeting midpoint of the range, $175 million R&D and SG&A. I'll just stock-based comp assume that's $25 million or so. You got about $150 million break even. You're looking at key contributors from Nuvaxovid royalties, right? Billions of doses a year, you know, over $2 billion reduction in our current liability. billions of doses a year you know over $2 billion reduction in our current liability We fundamentally changed the company. we fundamentally changed the company Our cash runway, we said we got cash runway into 2028, and that's before any new cash flows from deals coming into the company. our cash runway we said we got cash runway into 2028 and that's before any new cash flows from deals coming into the company Also in 2028, as early as 2028, non-GAAP profitability, you know, the key levers on that, and just to give you what a break even could look like, we're targeting midpoint of the range, $175 million R&D and SG&A. also in 2028 as early as 2028 non-gaap profitability you know the key levers on that and just to give you what a break even could look like we're targeting midpoint of the range $175 million r&d and sg&a I'll just stock-based comp assume that's $25 million or so. i'll just stock-based comp assume that's $25 million or so You got about $150 million break even. you got about $150 million break even You're looking at key contributors from Nuvaxovid royalties, right? you're looking at key contributors from nuvaxovid royalties right You're looking at, Sanofi advancement of milestones and even royalties potentially on, the CIC programs, and then additional opportunities for milestones and upfronts. You're looking at, Sanofi advancement of milestones and even royalties potentially on, the CIC programs, and then additional opportunities for milestones and upfronts. you're looking at sanofi advancement of milestones and even royalties potentially on the cic programs and then additional opportunities for milestones and upfronts From our new deals. You're seeing, especially this year, you saw the $30 million up front, and you're seeing the activity. You've got a potential to have contribution across all of these. From our new deals. from our new deals You're seeing, especially this year, you saw the $30 million up front, and you're seeing the activity. you're seeing especially this year you saw the $30 million up front and you're seeing the activity You've got a potential to have contribution across all of these. you've got a potential to have contribution across all of these Those are the levers that we're looking at as we look at 2028. Frankly, that's an interesting time and milestone. Those are the levers that we're looking at as we look at 2028. those are the levers that we're looking at as we look at 2028 Frankly, that's an interesting time and milestone. frankly that's an interesting time and milestone

Speaker 1: Yeah. Yeah. yeah

Speaker 2: What we wanna do is throw off cash as a company. What we wanna do is throw off cash as a company. what we wanna do is throw off cash as a company With a lean operating model across a diversified top line that is orders of magnitude higher than our cost structure, and create exceptional shareholder value while we're developing vaccines that matter for people. With a lean operating model across a diversified top line that is orders of magnitude higher than our cost structure, and create exceptional shareholder value while we're developing vaccines that matter for people. with a lean operating model across a diversified top line that is orders of magnitude higher than our cost structure and create exceptional shareholder value while we're developing vaccines that matter for people

Speaker 1: Yeah. Great. Yeah. yeah Great. great

Speaker 3: Very proud of our team on that success, Jim. Very proud of our team on that success, Jim. very proud of our team on that success jim Because it's, you know, my prior company, we built something up. I was the third employee hired, and we took the company public and launched a billion-dollar neuroscience asset there, and it was quite a successful ride. I found now coming to Novavax the last three years, having to unwind a company. Because it's, you know, my prior company, we built something up. because it's you know my prior company we built something up I was the third employee hired, and we took the company public and launched a billion-dollar neuroscience asset there, and it was quite a successful ride. i was the third employee hired and we took the company public and launched a billion-dollar neuroscience asset there and it was quite a successful ride I found now coming to Novavax the last three years, having to unwind a company. i found now coming to novavax the last three years having to unwind a company From $1.7 billion SG&A and R&D expenses down to 90% less than that by 2028 is our projection, while maintaining our talent, not having turnover that was any greater than industry average on the people we wanna keep maintaining our capabilities, while delivering that rapid declination in size, scope, scale, selling factories, parking lots, planters, lab equipment, right? Saying goodbye to people that had a passion for this company, that's hard to do, you know? From $1.7 billion SG&A and R&D expenses down to 90% less than that by 2028 is our projection, while maintaining our talent, not having turnover that was any greater than industry average on the people we wanna keep maintaining our capabilities, while delivering that rapid declination in size, scope, scale, selling factories, parking lots, planters, lab equipment, right? from $1.7 billion sg&a and r&d expenses down to 90% less than that by 2028 is our projection while maintaining our talent not having turnover that was any greater than industry average on the people we wanna keep maintaining our capabilities while delivering that rapid declination in size scope scale selling factories parking lots planters lab equipment right Saying goodbye to people that had a passion for this company, that's hard to do, you know? saying goodbye to people that had a passion for this company that's hard to do you know If you can't do it, you can't be a leader, but if you ever enjoy it, you shouldn't be a leader. Really hard to say goodbye to these great people. We did it. We delivered on our prior obligations all along the way. We put the company in a position based on that to launch this new strategy and now drive toward long-term value creation. We're really through that first chapter and a half of that pivot. If you can't do it, you can't be a leader, but if you ever enjoy it, you shouldn't be a leader. if you can't do it you can't be a leader but if you ever enjoy it you shouldn't be a leader Really hard to say goodbye to these great people. really hard to say goodbye to these great people We did it. we did it We delivered on our prior obligations all along the way. we delivered on our prior obligations all along the way We put the company in a position based on that to launch this new strategy and now drive toward long-term value creation. we put the company in a position based on that to launch this new strategy and now drive toward long-term value creation We're really through that first chapter and a half of that pivot. we're really through that first chapter and a half of that pivot Well on our way now. We hope everyone sees by the progress we've made in this new strategy the exponential increase in our technology from third parties who are in this space. We're always conservative and careful not to overpromise. It's biotech, it has risk, but we can promise our full effort and continued diligence on driving down this path for long-term value creation. We've got an amazing tech. We wanna share it with the world. We intend to do so. Right? Well on our way now. well on our way now We hope everyone sees by the progress we've made in this new strategy the exponential increase in our technology from third parties who are in this space. we hope everyone sees by the progress we've made in this new strategy the exponential increase in our technology from third parties who are in this space We're always conservative and careful not to overpromise. we're always conservative and careful not to overpromise It's biotech, it has risk, but we can promise our full effort and continued diligence on driving down this path for long-term value creation. it's biotech it has risk but we can promise our full effort and continued diligence on driving down this path for long-term value creation We've got an amazing tech. we've got an amazing tech We wanna share it with the world. we wanna share it with the world We intend to do so. we intend to do so Right? right

Speaker 1: Very well said. Very well said. very well said

Speaker 3: Thanks Thanks thanks

Speaker 1: I think that's a great note to end on. Please join me in thanking. I think that's a great note to end on. i think that's a great note to end on Please join me in thanking. please join me in thanking

Speaker 3: Thanks for joining everyone. Thanks for joining everyone. thanks for joining everyone

Speaker 1: Jim for the time. Jim for the time. jim for the time

Speaker 3: All right. All right. all right

Speaker 1: Thanks, you guys. Thanks, you guys. thanks you guys