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What changed in NOVAVAX INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of NOVAVAX INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+676 added−676 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-28)

Top changes in NOVAVAX INC's 2024 10-K

676 paragraphs added · 676 removed · 392 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

113 edited+101 added−113 removed89 unchanged
Biggest changeAffordability • Focused on seeking to foster an environment with no barriers to use of our vaccines due to either physical availability or pricing of the product. • 100% returns for certain vaccinators offered with Novavax assuming all financial risk related to returns. • In the U.S., participated in the Vaccines for Children (VFC) Program, which serves as a critical safety net for children under 19 who are Medicaid-eligible, uninsured, underinsured or American Indian/Alaskan Native. • In the U.S., participated in the 317 Program, which serves uninsured and underinsured adults and supports Federal Qualified Health Centers that potentially vaccinate uninsured and underinsured patients. • In the U.S., participated in the “Bridge Access Program For COVID Vaccines and Treatments” to provide access to COVID-19 vaccine option for adults without other sources of coverage.
Biggest changeExamples of initiatives supportive of these focus areas include the following: Access and Affordability • Focused on seeking to foster an environment with no barriers to use of our vaccines due to either physical availability or pricing of the product. • In 2024 in the U.S., participated in the Vaccines for Children (VFC) Program, which serves as a critical safety net for children under 19 who are Medicaid-eligible, uninsured, underinsured or American Indian/Alaskan Native. • Also participated in the 317 Program, which serves uninsured and underinsured adults. • Participated in the “Bridge Access Program For COVID Vaccines and Treatments” to provide access to COVID-19 vaccine option for adults without other sources of coverage. • R21/Matrix-M™ adjuvant malaria vaccine, developed by the University of Oxford and its Jenner Institute and the Serum Institute of India, and formulated with our Matrix-M adjuvant is expected to be offered in 15+ countries across Africa by 2025. • Efforts focused on clinical trial diversity (economic, race, age).
Our generous total rewards package for employees in the U.S. includes competitive market pay and comprehensive benefits, including insurance to protect and maintain health; income protection through our short- and long-term disability programs and life insurance; adoption assistance and paid parental leave programs; and services to assist in balancing work and personal life, such as backup child, adult, and elder care, and financial well-being programs, including monthly financial wellness seminars, one-on-one financial planning sessions, and debt and credit management support.
Our total rewards package for employees in the U.S. includes competitive market pay and comprehensive benefits, including insurance to protect and maintain health; income protection through our short- and long-term disability programs and life insurance; adoption assistance and paid parental leave programs; and services to assist in balancing work and personal life, such as backup child, adult and elder care, and financial well-being programs, including monthly financial wellness seminars, one-on-one financial planning sessions, and debt and credit management support.
At this time, we cannot predict how these developments may impact our business and operations if our products are commercialized in the U.S. Within the European Union and the United Kingdom, the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order, or use of medicinal products is prohibited.
At this time, we cannot predict how these developments may impact our business and operations if our products are commercialized in the U.S. Within the European Union and the United Kingdom, the provision of benefits or advantages to physicians or others to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order, or use of medicinal products is prohibited.
The EU and the UK similarly provide a faster means to achieve approval by offering CMA to fulfil unmet medical needs. CMAs are granted with the proviso of obtaining additional comprehensive data to confirm the benefit/risk so that the MA will eventually become unconditional.
The EU and the UK similarly provide a faster means to achieve approval by offering CMA to fulfil unmet medical needs. CMAs are granted with the proviso of obtaining additional comprehensive data to confirm the benefit/risk so that the MA will eventually become unconditional standard MA.
Recombinant Nanoparticle Vaccine Technology Once a target of interest has been identified, the genetic sequence encoding the antigen is selected for developing the vaccine construct. The genetic sequence may be optimized to enhance protein stability or confer resistance to degradation.
Recombinant Nanoparticle Vaccine Technology Once a target of interest has been identified, the genetic sequence encoding an antigen is selected for developing the vaccine construct. The genetic sequence may be optimized to enhance protein stability or confer resistance to degradation.
Pursuant to the Settlement Agreement, we are responsible for payment to Gavi of (i) an initial settlement payment of $75 million, which we paid on February 20, 2024, and (ii) deferred payments, in equal annual amounts of $80 million payable each calendar year through a deferred payment term ending December 31, 2028.
Pursuant to the Gavi Settlement Agreement, we are responsible for payment to Gavi of (i) an initial settlement payment of $75 million, which we paid in February 2024, and (ii) deferred payments, in equal annual amounts of $80 million payable each calendar year through a deferred payment term ending December 31, 2028.
We are also subject to regulation under the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, and other present and potential federal, state, or local regulations, including national and local regulations that govern our facilities in Sweden, the Czech Republic and Switzerland.
We are also subject to regulation under the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, and other present and potential federal, state, or local regulations, including national and local regulations that govern our facilities in Sweden and Switzerland.
Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, the FCPA presents particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials.
Compliance with the FCPA can be expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, the FCPA presents particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials.
FDA has granted Pfizer and Moderna BLA approval for their updated vaccines in individuals 12 years and older and EUA for their updated vaccines in individuals 6 months to 11 years, while Novavax received EUA by the U.S. FDA for our updated vaccine in individuals 12 years and older.
FDA has granted Pfizer and Moderna BLA approval for their updated vaccines in individuals 12 years and older and EUA for their updated vaccines in individuals 6 months to 11 years, while Novavax received EUA by the U.S. FDA for our updated COVID-19 vaccine in individuals 12 years and older.
The SEC maintains an Internet site 25 Table of Contents that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. We use our website (www.novavax.com) as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the SEC.
The SEC maintains an Internet site that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. We use our website (www.novavax.com) as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the SEC.
We have the right to price the vaccines offered to such low-income and lower-middle income countries at our discretion, and, when utilized by Gavi, we will credit the actual price per vaccine paid against the applicable credit.
We have the right to price the vaccines offered to such low-income and lower-middle income countries in our discretion, and, when utilized by Gavi, we will credit the actual price per vaccine paid against the applicable credit.
Under the agreement, SIIPL purchases our Matrix-M™ adjuvant for use in development activities at cost and for commercial purposes at a tiered commercial supply price, and pays a royalty in the single-to low- double-digit range based on vaccine sales for a period of 15 years after the first commercial sale of the vaccine in each country.
Under the SII R21 Agreement, SII purchases our Matrix-M™ adjuvant for use in development activities at cost and for commercial purposes at a tiered commercial supply price, and pays a royalty in the single-to low- double-digit range based on vaccine sales for a period of 15 years after the first commercial sale of the vaccine in each country.
R21/Matrix-M™ Adjuvant Malaria Vaccine Regulatory and Licensure In December 2023, the WHO announced it prequalified the R21/Matrix-M™ adjuvant malaria vaccine to prevent malaria disease in children caused by the P. falciparum parasite in endemic areas. Prequalification status enables United Nations agencies to procure the vaccine for eligible countries and will enable rollout of the vaccine in mid-2024.
R21/Matrix-M™ Adjuvant Malaria Vaccine Regulatory and Licensure In December 2023, the WHO announced it prequalified the R21/Matrix-M™ adjuvant malaria vaccine to prevent malaria disease in children caused by the P. falciparum parasite in endemic areas. Prequalification status enables United Nations agencies to procure the vaccine for eligible countries and enabled rollout of the vaccine in mid-2024.
On November 20, 2020, the DHHS published a Final Rule entitled “Removal of Safe Harbor Protection for Rebates to Plans or PBMs Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection,” commonly referred to as the “Rebate Rule,” which amends the federal Anti-Kickback Statute discount safe harbor by eliminating protection for price concessions, including rebates, that are offered by pharmaceutical manufacturers to plan sponsors, or pharmacy benefit managers under contract with them, under the Medicare Part D program and Medicare Advantage Plans, unless the price reduction is one required by law.
On November 20, 2020, the DHHS published a Final Rule entitled “Removal of Safe Harbor Protection for Rebates to Plans or PBMs Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection,” commonly referred to as the “Rebate Rule,” which amends the federal Anti-Kickback Statute discount safe harbor by eliminating protection for price 22 Table o f Contents concessions, including rebates, that are offered by pharmaceutical manufacturers to plan sponsors, or pharmacy benefit managers under contract with them, under the Medicare Part D program and Medicare Advantage Plans, unless the price reduction is one required by law.
The provision of benefits or advantages to physicians is also governed by the national anti-bribery laws of EU Member States and the United Kingdom, such as the UK Bribery Act 2010. Infringement of these laws could result in substantial fines and imprisonment. We are also subject to the U.S.
The improper provision of benefits or advantages to physicians or other individuals is also governed by the national anti-bribery laws of EU Member States and the United Kingdom, such as the UK Bribery Act 2010. Infringement of these laws could result in substantial fines and imprisonment. We are also subject to the U.S.
Governing Responsibly 19 Table of Contents • Policy remains in place to comply with all government and regulatory agency requirements and industry standards with good laboratory practices (“GLP”), current good manufacturing practices (“cGMP”) and good distribution practices (“GDP”). • Practice responsible animal welfare practices including searching for non-animal alternatives whenever possible, abiding by the 3R-principle (Reduce, Refine, Replace), working with accredited animal facilities with regional independent animal experimentation ethical review boards approving all experiments. • “The NovaCode,” a robust handbook of written standards and business ethics policies remains in place. • Maintain a global hotline for reporting compliance concerns with established internal investigating protocols. • Maintain a Strategic Compliance Governance Committee to help our partners comply with U.S. regulations. • Chief Compliance Officer elevated to report to the CEO with a dotted line to the Audit Committee. • Hold company-wide business ethics training, guidance, and raw materials review. • Keep an anti-bribery and anti-corruption policy in place to ensure a transparent and ethical business model. • Standard operating procedures guide decision-making. • Abide by robust cybersecurity standards, meeting elevated government contracting requirements. • Chief Safety Officer continues to build out a robust epidemiology benefit / risk group to better understand the safety profiles of different vaccines. • Ongoing employee training for updated Safety Policy.
Governing Responsibly • Policy remains in place to comply with all government and regulatory agency requirements and industry standards with good laboratory practices (“GLP”), current good manufacturing practices (“cGMP”) and good distribution practices (“GDP”). 18 Table o f Contents • Practice responsible animal welfare practices including searching for non-animal alternatives whenever possible, abiding by the 3R-principle (Reduce, Refine, Replace), working with accredited animal facilities with regional independent animal experimentation ethical review boards approving all experiments. • “The NovaCode,” a robust handbook of written standards and business ethics policies remains in place. • Maintain a global hotline for reporting compliance concerns with established internal investigating protocols. • Maintain a Strategic Compliance Governance Committee to help our partners comply with U.S. regulations. • Hold company-wide business ethics training, guidance, and raw materials review. • Keep an anti-bribery and anti-corruption policy in place to ensure a transparent and ethical business model. • Standard operating procedures guide decision-making. • Abide by robust cybersecurity standards, meeting elevated government contracting requirements. • Chief Safety Officer continues to build out a robust epidemiology benefit / risk group to better understand the safety profiles of different vaccines. • Ongoing employee training on our updated Safety Policy.
Such deferred payments may be reduced through Gavi’s use of an annual vaccine credit equivalent to the unpaid balance of such deferred payments each year, which may be applied to qualifying sales of any of our vaccines for supply to certain low-income and lower-middle income countries.
Such deferred payments may be reduced through Gavi’s use of an annual vaccine credit equivalent to the unpaid balance of such deferred payments each year, which may be applied to qualifying sales of any of our vaccines funded by Gavi for supply to certain low-income and lower-middle income countries.
FDA requesting licensure of the vaccine for marketing based on the vaccine’s safety and efficacy. Similar pathways exist in Europe and other geographies. 20 Table of Contents The U.S. FDA will only approve a BLA if the vaccine is demonstrated to be safe, pure, and potent. During the U.S.
FDA requesting licensure of the vaccine for marketing based on the vaccine’s safety and efficacy. Similar pathways exist in Europe and other geographies. The U.S. FDA will only approve a BLA if the vaccine is demonstrated to be safe, pure, and potent. During the U.S.
FDA may hold meetings with the sponsor throughout the development process, provide timely advice to 21 Table of Contents the product sponsor regarding development and approval, involve more senior staff in the review process, assign a cross-disciplinary project lead for the review team, and take other steps to design the clinical trials in an efficient manner. Third, the U.S.
The U.S. FDA may hold meetings with the sponsor throughout the development process, provide timely advice to the product sponsor regarding development and approval, involve more senior staff in the review process, assign a cross-disciplinary project lead for the review team, and take other steps to design the clinical trials in an efficient manner. Third, the U.S.
The IRA will delay implementation of this Rebate Rule until 2032. This new rule could result in a change in incentives for health plans and pharmacy benefit managers in negotiating rebates and discounts with 23 Table of Contents manufactures for preferred formulary placement.
The IRA will delay implementation of this Rebate Rule until 2032. This new rule could result in a change in incentives for health plans and pharmacy benefit managers in negotiating rebates and discounts with manufactures for preferred formulary placement.
We have an agreement with SIIPL related to its manufacture of R21/Matrix-M™ adjuvant malaria vaccine under which SIIPL purchases our Matrix-M™ adjuvant for use in development activities at cost and for commercial purposes at a tiered commercial supply price, and pays a royalty in the single- 12 Table of Contents to low-double digit range based on vaccine sales for a period of 15 years after the first commercial sale of the vaccine in each country.
We have an agreement with SII related to its manufacture of R21/Matrix-M™ adjuvant malaria vaccine under which SII purchases our Matrix-M™ adjuvant for use in development activities at cost and for commercial purposes at a tiered commercial supply price, and pays a royalty in the single- to low-double digit range based on vaccine sales for a period of 15 years after the first commercial sale of the vaccine in each country.
The deferred payments are due in variable quarterly installments beginning in the first quarter of 2024 and total $400 million during the deferred payment term.
The deferred payments are due in variable quarterly installments beginning in the second quarter of 2024 and total $400 million during the deferred payment term.
Takeda We have a collaboration and license agreement with Takeda Pharmaceutical Company Limited (“Takeda”) under which we granted Takeda an exclusive license to develop, manufacture, and commercialize the Company’s COVID-19 Vaccine in Japan.
Takeda We have a collaboration and license agreement with Takeda Pharmaceutical Company Limited (“Takeda”) under which we granted Takeda an exclusive license to develop, manufacture, and commercialize our COVID-19 Vaccine in Japan.
We are also subject to state and foreign laws governing the privacy and security of health or personal information such as the European Union General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018 (“CCPA”). There also are U.S. federal transparency requirements under the Physician Payments Sunshine Act that require manufacturers of U.S.
We are also subject to state and foreign laws governing the privacy and security of health or personal information such as the European Union General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018 (“CCPA”). 23 Table o f Contents There also are U.S. federal transparency requirements under the Physician Payments Sunshine Act that require manufacturers of U.S.
SIIPL agreed to purchase our Matrix-M™ adjuvant, and we granted SIIPL a non-exclusive license to manufacture the antigen drug substance component of our COVID-19 Vaccine in SIIPL’s licensed territory solely for use in the manufacture of COVID-19 Vaccine. Novavax and SIIPL equally split the revenue from SIIPL’s sale of COVID-19 Vaccine in its licensed territory, net of agreed costs.
SII agreed to purchase our Matrix-M™ adjuvant and we granted SII a non-exclusive license to manufacture the antigen drug substance component of our COVID-19 Vaccine in SII’s licensed territory solely for use in the manufacture of COVID-19 Vaccine. We and SII equally split the revenue from SII’s sale of COVID-19 Vaccine in its licensed territory, net of agreed costs.
Professional development learning series are available to all employees and focus on self-awareness, collaboration, hybrid working, leadership, and business acumen. Internal Communications We employ a variety of tools to facilitate open and direct communication, including global forums with executives, employee surveys, and engagement through forums and committees.
Professional development learning series are available to all employees and focus on self-awareness, collaboration, hybrid working, leadership, and business acumen. Internal Communications We employ a variety of channels to facilitate open and direct communication, including global forums with executives and employee surveys.
It is our policy to require employees, consultants, contractors, manufacturers, collaborators, and other advisors to execute confidentiality agreements upon the commencement of employment, consulting, or collaborative relationships with us. We also require confidentiality agreements from any entity that is to receive confidential information from us.
It is our policy to require employees, consultants, contractors, manufacturers, collaborators, and other advisors to execute confidentiality agreements upon the commencement of employment, consulting, or collaborative relationships with us. We also require 16 Table o f Contents confidentiality agreements from any entity that is to receive confidential information from us.
Vaccine clinical development in most countries follows the same general regulatory pathway as drugs and other biologics. Before applying for U.S. FDA licensure to market any new vaccine candidate, we expect to first submit an investigational new drug application (“IND”) that explains to the U.S.
Vaccine clinical development in most countries follows the same general regulatory pathway as drugs and other biologics. Before applying for U.S. FDA licensure to market any new vaccine candidate, we expect to first submit an IND that explains to the U.S.
This adjuvant has enabled potent, well-tolerated, and durable efficacy by stimulating the entry of antigen presenting cells (“APCs”) into the injection site and enhancing antigen presentation in local lymph nodes. This in turn activates APCs, T-cell and B-cell populations, and plasma cells, which promotes the production of high-affinity antibodies.
This adjuvant has enabled potent, well tolerated, and durable efficacy by stimulating the entry of antigen presenting cells (“APCs”) into the injection site and enhancing antigen presentation in local lymph nodes. This in turn activates APCs, T-cell and B-cell populations, and plasma cells, which promote the production of high affinity antibodies, an immune boosting response.
We have a robust employee assistance program for employees to access support for a variety of life events. 17 Table of Contents In addition, we offer the majority of employees the benefit of equity ownership in the Company through equity grants or participation in our employee stock purchase plan.
We have a robust employee assistance program that allows employees to access support for a variety of life events. In addition, we offer the majority of employees the benefit of equity ownership in the Company through equity grants or participation in our employee stock purchase plan.
FDA, the International Council for Harmonisation (“ICH”), and other agencies because we believe meeting U.S. and ICH standards generally allows us to also satisfy regulatory agencies’ standards in other countries where we intend to do business.
We focus on the U.S. regulatory process and the standards imposed by the U.S. FDA, the International Council for Harmonisation (“ICH”), and other agencies because we believe meeting U.S. and ICH standards generally allows us to also satisfy regulatory agencies’ standards in other countries where we intend to do business.
The contents of our website are not part of this Annual Report on Form 10-K, or any other report we file with, or furnish to, the SEC. 26 Table of Contents
The contents of our website are not part of this Annual Report on Form 10-K, or any other report we file with, or furnish to, the SEC. 25 Table o f Contents
The benefit to public health of the immediate availability on the market of the medicinal product concerned should outweigh the risk inherent in the fact that additional data are still required. The U.S.
For the purpose of granting a CMA, the benefit to public health of the immediate availability on the market of the medicinal product concerned should outweigh the risk inherent in the fact that additional data are still required. The U.S.
For example, through the process created by the Budget Control Act of 2011, there are automatic reductions of Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2030.
For example, through the process created by the Budget Control Act of 2011, there are automatic reductions of Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2030. Medicare establishes payment allowances annually for COVID-19 vaccines.
In March 2010, the U.S. Congress enacted the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (“ACA”), which includes changes to the coverage and reimbursement of drug products under government health care programs.
Congress enacted the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (“ACA”), which includes changes to the coverage and reimbursement of drug products under government health care programs.
Of our total workforce, approximately 68% of employees are engaged primarily in research, development, and manufacturing activities and approximately 32% of employees are engaged primarily in executive, business development, commercial, finance and accounting, legal, and administrative functions.
Of our total workforce, approximately 71% of employees are engaged primarily in research, development, and manufacturing activities, and approximately 29% of employees are mainly engaged in executive, business development, commercial, finance and accounting, legal, and administrative functions.
FDA and a CMA by EMA in the European Union. As of February 2024, Novavax is one of three manufacturers that have a COVID-19 vaccine that has received authorization by the U.S. FDA for the 2023-2024 vaccination season, with the other manufacturers being Pfizer and Moderna. As of February 2024, the U.S.
As of February 2025, Novavax is one of three manufacturers that have a COVID-19 vaccine that has received authorization by the U.S. FDA for the 2024-2025 vaccination season, with the other manufacturers being Pfizer and Moderna. As of February 2025, the U.S.
Our success will depend, in part, on whether we can: • obtain patents to protect our own technologies and product candidates; • obtain licenses to use the technologies of third-parties, which may be protected by patents; • protect our trade secrets and know-how; and • operate without infringing the intellectual property and proprietary rights of others.
Our success will depend, in part, on whether we can: • obtain patents to protect our own technologies and product candidates; • obtain licenses to use the technologies of third-parties, which may be protected by patents; and • protect our trade secrets and know-how.
FDA may require that a sponsor of a drug or biologic receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials to confirm efficacy using a clinically meaningful endpoint, thereby confirming efficacy observed pre-approval using a surrogate endpoint. In June 2019, we announced that the U.S.
FDA may require that a sponsor of a drug or biologic receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials to confirm efficacy using a clinically meaningful endpoint, thereby confirming efficacy observed pre-approval using a surrogate endpoint.
Our wellness initiatives include a monthly newsletter, which highlights organizations and partners, tools, and resources intended to help our employees lead healthier and happier lives. We offer several digital apps that allow our employees to connect to an online licensed therapist or to access activities that are designed to reduce stress and anxiety and increase mindfulness and emotional well-being.
Our wellness initiatives include a monthly newsletter, which highlights organizations and partners, tools, and resources intended to enrich and improve our employees’ physical and mental well-being. We offer several digital apps that allow our employees to connect to an online licensed therapist or to access activities that are designed to reduce stress and anxiety and increase mindfulness and emotional well-being.
At Novavax, everyone is a leader and this model and associated tools, resources, and programs develops leadership skills at all levels of the organization.
At Novavax, everyone is a leader, and this model and associated tools, resources, and programs are designed to develop leadership skills at all levels of the organization.
Our Executive Development Program includes executive coaching engagements and leadership development programs designed to strengthen our leadership bench and accelerate and prepare our top talent for future growth. The Executive Development Program includes a diverse and global group of 34 employees.
Our Executive Development Program includes executive coaching engagements and leadership development programs designed to strengthen our leadership bench and accelerate and prepare our top talent for future growth. The Executive 17 Table o f Contents Development Program includes a diverse and global group of 20 employees annually.
On March 17, 2020, the Secretary of DHHS issued a declaration under the PREP Act and has issued subsequent amendments thereto since then to provide liability immunity for activities related to certain countermeasures against the ongoing COVID-19 pandemic. The current declaration will end on December 31, 2024, unless it is renewed.
On March 17, 2020, the Secretary of DHHS issued a declaration under the PREP Act and has issued subsequent amendments thereto since then to provide liability immunity for activities related to certain countermeasures against the ongoing COVID-19 pandemic.
With respect to employees, consultants, and contractors, the agreements generally provide that all inventions made by the individual while rendering services to us shall be assigned to us as our property. Human Capital Employees As of February 23, 2024, we have 1,543 full-time employees, of whom approximately 9% hold M.D. or Ph.D. degrees and approximately 20% hold other advanced degrees.
With respect to employees, consultants, and contractors, the agreements generally provide that all inventions made by the individual while rendering services to us shall be assigned to us as our property. Human Capital Employees As of February 18, 2025, we have 952 full-time employees, of whom approximately 8% hold MD or PhD degrees, and approximately 20% hold other advanced degrees.
Based on our COVID-19 vaccine and its high efficacy against both the original and variant strains and its well-tolerated profile demonstrated in clinical trials, including two pivotal Phase 3 trials in the UK and U.S., we believe our vaccine candidate will continue to play an important role in addressing this global public health crisis. 15 Table of Contents Additionally, we believe that our platform is well suited for combination vaccines, for example influenza and COVID-19.
Based on our COVID-19 vaccine and its high efficacy against both the original and variant strains and its well-tolerated profile demonstrated in clinical trials, including two pivotal Phase 3 trials in the UK and U.S., we believe our COVID-19 vaccine will continue to play an important role in addressing this global public health need.
Government Regulations The development, production, and marketing of biological products, which include the vaccine candidates being developed by Novavax or our collaborators, are subject to regulation for safety, efficacy, and quality by numerous governmental authorities in the U.S. and other countries. We focus on the U.S. regulatory process and the standards imposed by the U.S.
Saponin is used to produce the Matrix-M™ adjuvant. Government Regulations The development, production, and marketing of biological products, which include the vaccine candidates being developed by Novavax or our collaborators, are subject to regulation for safety, efficacy, and quality by numerous governmental authorities in the U.S. and other countries.
Our technology is based upon utilizing the baculovirus expression system in insect cells to make recombinant vaccines. Our Matrix-M™ adjuvant has demonstrated a potent and well-tolerated effect by stimulating the entry of antigen presenting cells into the injection site and enhancing antigen presentation in local lymph nodes, boosting immune response.
Our Matrix-M™ adjuvant has demonstrated a potent and well-tolerated effect by stimulating the entry of antigen presenting cells into the injection site and enhancing antigen presentation in local lymph nodes, boosting immune response.
Also in the Settlement Agreement, we grant Gavi an additional credit of up to $225 million, which may be applied against any additional qualifying sales, exceeding the $80 million deferred payment amount in any calendar year, of our vaccines in such countries during such deferred payment term.
Also, pursuant to the Gavi Settlement Agreement, we granted Gavi an additional credit of up to $225 million that may be applied against qualifying sales of any of our vaccines for supply to such low-income and lower-middle income countries that exceed the $80 million deferred payment amount in any calendar year during the deferred payment term.
We must then conduct Phase 1 clinical trials and larger-scale Phase 2 and 3 clinical trials that demonstrate the safety, immunogenicity, and efficacy of our vaccine candidate to the satisfaction of the U.S. FDA. Following successful completion of all three phases of clinical development, a BLA can be submitted to the U.S.
We must then conduct Phase 1 clinical trials and larger-scale Phase 2 and 3 clinical trials that demonstrate the safety, immunogenicity, and efficacy of our vaccine candidate to the satisfaction of the U.S. FDA. The U.S.
In addition, several of the combination formulations achieved responses to both SARS-CoV-2 and to the four homologous influenza strains that were comparable to the reference comparators, supporting their prioritization for advanced development.
The CIC vaccine candidate achieved both anti-SARS-CoV-2 immunoglobulin G (IgG) and neutralizing levels comparable to our prototype COVID-19 vaccine. In addition, several of the combination formulations achieved responses to both SARS-CoV-2 and to the four homologous influenza strains that were comparable to the reference comparators, supporting their prioritization for advanced development.
In March 2020, we entered into an agreement with SIIPL that granted SIIPL a non-exclusive license for the use of Matrix-M™ adjuvant supplied by us to develop, manufacture, and commercialize R21/Matrix-M™ adjuvant, a malaria vaccine created by the Jenner Institute, University of Oxford (“R21/Matrix-M™”).
In March 2020, we entered into an agreement with SLS that granted SII a non-exclusive license for the use of Matrix-M™ adjuvant supplied by us to develop, manufacture, and commercialize R21/Matrix-M™ adjuvant malaria vaccine (the "SII R21 Agreement"). In December 2023, R21/Matrix-M™ adjuvant malaria vaccine received prequalification by the WHO.
Other factors affecting our competitive position include our ability to attract and retain qualified personnel, obtain patent protection or otherwise develop proprietary products or processes, and secure sufficient capital resources for the lengthy period between technological conception and commercial sale. Patents and Proprietary Rights We generally seek patent protection for our technology and product candidates in the U.S. and abroad.
Other factors affecting our competitive position include our ability to attract and 15 Table o f Contents retain qualified personnel, obtain patent protection or otherwise develop proprietary products or processes, and secure sufficient capital resources for the lengthy period between technological conception and commercial sale.
In July 2022, we entered into an Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (as amended on September 26, 2022, the “Amended and Restated UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020, between the parties (the “Original UK Supply Agreement”).
In November 2024, we and The Secretary of State for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”) entered into a Termination and Settlement Agreement (the “Settlement Agreement”) and a Letter of Amendment to the Settlement Agreement (the “Settlement Agreement Amendment”), relating to the Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (the “Amended and Restated UK Supply Agreement”) and the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020 (the “Original UK Supply Agreement”) by and between us and the Authority.
Antigen Component of COVID-19 Vaccine We manufacture the antigen component of our COVID-19 Vaccine at our Novavax CZ facility in the Czech Republic. We have a supply agreement with SIIPL and SLS, an affiliate of SIIPL, for the manufacture of the antigen component of COVID-19 Vaccine and the co-formulation, fill, and finishing of the finished vaccine product.
Antigen Component of COVID-19 Vaccine We have a supply agreement with SII and SLS for the manufacture of the antigen component of COVID-19 Vaccine and the co-formulation, fill, and finishing of the finished vaccine product.
We were incorporated in 1987 under the laws of the State of Delaware. Our principal executive offices are located at 700 Quince Orchard Road, Gaithersburg, Maryland, 20878, and our telephone number is (240) 268-2000.
Our principal executive offices are located at 700 Quince Orchard Road, Gaithersburg, Maryland, 20878, and our telephone number is (240) 268-2000.
Our common stock is listed on the Nasdaq Global Select Market under the symbol “NVAX.” Technology Overview We believe our recombinant nanoparticle vaccine technology, together with our proprietary Matrix-M™ adjuvant, is well suited for the development and commercialization of vaccine candidates targeting a broad scope of respiratory and other endemic and emerging infectious diseases at scale.
Our common stock is listed on the Nasdaq Global Select Market under the symbol “NVAX.” Technology Overview We believe our recombinant nanoparticle vaccine technology and our proprietary Matrix-M™ adjuvant are well suited for the development and commercialization of vaccine candidates targeting areas both within and beyond the infectious disease space.
For Fast Track products, sponsors may have more frequent interactions with the U.S. FDA and the U.S. FDA may initiate review of sections of a Fast Track product’s application before the application is complete. The U.S. FDA granted Fast Track Designation for our prototype vaccine in November 2020 and for our recombinant quadrivalent seasonal influenza vaccine candidate, in January 2020.
For Fast Track products, sponsors may have more frequent interactions with the U.S. FDA and the U.S. FDA may initiate review of sections of a Fast Track product’s application before the application is complete. The U.S.
Second, a product may be designated as a Breakthrough Therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. The U.S.
FDA granted Fast Track Designation for our prototype COVID-19 vaccine in November 2020 and for our recombinant quadrivalent seasonal influenza vaccine candidate, in January 2020. 20 Table o f Contents Second, a product may be designated as a Breakthrough Therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
The Canadian government may terminate the Canada APA, as amended, if we fail to receive regulatory approval for our COVID-19 Vaccine using bulk antigen produced at BMC on or before December 31, 2024.
We have an APA with the Canadian government, for the purchase of doses of COVID-19 Vaccine (the “Canada APA”). The Canadian government may terminate the Canada APA, as amended, as we failed to receive regulatory approval for our COVID-19 Vaccine using bulk antigen produced at Biologics Manufacturing Centre Inc. (“BMC”) on or before December 31, 2024.
The Phase 2 dose-confirming randomized, observer-blinded trial evaluated the safety and effectiveness (immunogenicity) of different formulations of the CIC and influenza vaccine candidates, and higher doses of Novavax's COVID-19 vaccine in 1,575 adults aged 50 through 80 years. The CIC vaccine candidate achieved both anti-SARS-CoV-2 immunoglobulin G (IgG) and neutralizing levels comparable to our prototype vaccine.
The Phase 2 dose-confirming randomized, observer-blinded trial evaluated the safety and 11 Table o f Contents effectiveness (immunogenicity) of different formulations of the CIC and influenza vaccine candidates, and higher doses of Novavax's COVID-19 vaccine in 1,575 adults aged 50 through 80 years.
FDA-approved COVID-19 vaccines for adults as recommended by the ACIP. There has been considerable public and government scrutiny in the U.S. of pharmaceutical pricing and proposals to address the perceived high cost of pharmaceuticals.
FDA-approved COVID-19 vaccines recommended by the ACIP. At the state level, payment rates for covered vaccines and their administration are set by the states or their contracted managed care plans. There has been considerable public and government scrutiny in the U.S. of pharmaceutical pricing and proposals to address the perceived high cost of pharmaceuticals.
These immune-boosting and dose-sparing capabilities contribute to the adjuvant’s highly unique profile. 5 Table of Contents We continue to evaluate commercial opportunities for the use of our Matrix-M™ adjuvant alongside vaccine antigens produced by other manufacturers.
This potent mechanism of action enables a lower dose of antigen to achieve the desired immune response, thereby contributing to increased vaccine supply and manufacturing capacity. These immune-boosting and dose-sparing capabilities contribute to the adjuvant’s highly unique profile. We continue to evaluate commercial opportunities for the use of our Matrix-M™ adjuvant alongside vaccine antigens produced by other manufacturers.
A number of vaccine manufacturers, research institutions, and other organizations have developed a vaccine for SARS-CoV-2, the virus that causes COVID-19. A variety of different vaccine technologies are being studied, including nucleic acid (RNA/DNA), viral vectors, live attenuated or inactivated, and protein-based vaccines. Novavax is the first protein-based COVID-19 vaccine that received EUA by the U.S.
A variety of different vaccine technologies are being studied, including nucleic acid (RNA/DNA), viral vectors, live attenuated or inactivated, and protein-based vaccines. Novavax is the first protein-based COVID-19 vaccine that received EUA by the U.S. FDA and a CMA by the European Commission based on EMA in the European Union.
Some 24 Table of Contents U.S. states have transparency laws requiring the reporting of information that differs from the scope of information reported under the federal law, which permits these additional state requirements. Within the European Union and the United Kingdom, payments made to physicians must be publicly disclosed.
Some U.S. states have transparency laws requiring the reporting of information that differs from the scope of information reported under the federal law, which permits these additional state requirements. Within the European Union and the United Kingdom, payments made to physicians are subject to public disclosure governed by either national statutory or non-statutory industry self-regulatory rules.
We believe this baculovirus expression system with our nanoparticle configuration formulated with our Matrix-M™ adjuvant offers many advantages compared to other technologies, such as enabling dose-sparing effects and refrigerator temperature storage that is well suited for developing COVID-19 and combination vaccines, as well as vaccines against a number of other infectious diseases.
We believe this baculovirus expression system with our nanoparticle configuration formulated with our Matrix-M™ adjuvant offers many advantages compared to 14 Table o f Contents other technologies, such as enabling dose-sparing effects and refrigerator temperature storage.
While we believe our products would be covered under the current PREP Act declaration, this cannot be assured. Also, there can be no assurance that the Secretary of the DHHS will make other declarations in the future that cover any of our other product candidates or that the U.S.
Also, there can be no assurance that the Secretary of the DHHS will make other declarations in the future that cover any of our other product candidates or that the U.S. Congress will not act in the future to reduce coverage under the PREP Act or to repeal it altogether.
On April 5, 2023, Gavi filed its Reply to our Counterclaims. On February 16, 2024, we and Gavi entered into a Termination and Settlement Agreement (the “ Gavi Settlement Agreement”) terminating the Gavi APA, settling the arbitration proceedings and releasing both parties of all claims arising from, under or otherwise in connection with the Gavi APA.
As of December 31, 2023, the remaining Gavi Advance Payment Amount was $696.4 million. In February 2024, we and Gavi entered into a Termination and Settlement Agreement (the “Gavi Settlement Agreement”) terminating the Gavi APA, settling the arbitration proceedings, and releasing both parties of all claims arising from, under, or otherwise in connection with the Gavi APA.
Coronavirus Vaccine Clinical Development We remain focused on expanding our COVID-19 vaccine label within the booster, adolescent, and pediatric indications. We continue to evaluate vaccine safety, immunogenicity, and effectiveness through ongoing clinical trials and collaborative evidence-generating real-world studies. We expect to leverage these clinical insights to advance additional regulatory approvals of our COVID-19 vaccine globally, amidst the evolving COVID-19 landscape.
Coronavirus Vaccine Clinical Development We continue efforts to expand our COVID-19 vaccine label within the adolescent and pediatric indications. Additionally, we continue to evaluate vaccine safety, immunogenicity, and effectiveness through ongoing clinical trials and collaborative evidence-generating real-world studies.
These data are intended to support adolescent heterologous booster label expansion in some territories with topline results expected in the second quarter of 2024. Phase 2b/3 Pediatric Hummingbird™ Study In August 2023, we announced topline results from our Phase 2b/3 Hummingbird™ trial that met its primary endpoints in children aged 6 through 11 years demonstrating both tolerability and immunologic responses.
In August 2023, we announced topline results from our Phase 2b/3 Hummingbird™ trial that met its primary endpoints in children aged 6 through 11 years demonstrating both tolerability and immunologic responses.
In the last 12 months, videos were viewed and completed over 40,000 times by our employees. In addition, approximately 135 employees have participated in spot coaching. We provide an Executive Development Program for employees identified as having high potential and for employees who have been identified as potential successors to leadership positions through our talent review and succession planning process.
We provide an Executive Development Program for employees identified as having high potential and for employees who have been identified as potential successors to leadership positions through our talent review and succession planning process.
No such product can be marketed in a country until the regulatory authorities of that country have approved an appropriate marketing application. U.S.FDA licensure does not guarantee approval by other regulatory authorities. In addition, in many countries, the government is involved in the pricing of the product.
In addition to regulatory approvals that must be obtained in the U.S., an investigational product is also subject to regulatory approval in other countries in which it is intended to be marketed. No such product can be marketed in a country until the regulatory authorities of that country have approved an appropriate marketing application.
We believe malaria has the potential to be preventable through our partner-led R21/Matrix-M™ adjuvant malaria vaccine, which in 2023 received authorization in several countries and prequalification by the WHO. R21/Matrix-M™ Adjuvant Malaria Vaccine R21/Matrix-M™ adjuvant malaria vaccine, formulated with our Matrix-M™ adjuvant is developed by our partner, the Jenner Institute, University of Oxford, and manufactured by SIIPL.
We believe malaria has the potential to be preventable through our partner-led R21/Matrix-M™ adjuvant malaria vaccine, which in 2024 the first doses were distributed and administered across the African region after in 2023 having received authorization in several countries and prequalification by the WHO.
In exchange for 22 Table of Contents coverage, we may be obligated to provide rebates or offer discounts under government health programs or to government and private purchasers. The U.S. and state governments continue to propose and pass legislation designed to reform delivery of, or payment for, health care, including initiatives to reduce the cost of healthcare.
The U.S. and state governments continue to propose and pass legislation designed to reform delivery of, or payment for, health care, including initiatives to reduce the cost of healthcare. In March 2010, the U.S.
Certain payments to hospitals in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions.
Certain payments to hospitals in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions. Companies can also be held liable for the improper actions of third parties with whom they contract to conduct business on their behalf.
APAs We have entered into APAs (also referred to as “supply agreements” throughout this Annual Report on Form 10-K) with the EC and various countries globally.
We continue to work closely with governments, regulatory authorities, and non-governmental organizations in our commitment to facilitate access to our COVID-19 vaccine. APAs We have entered into APAs (also referred to as “supply agreements” throughout this Annual Report on Form 10-K) with various countries globally.
Similarly, in many countries outside the U.S., pharmaceutical pricing is subject to regulatory control, particularly in countries where healthcare is provided mainly through government funding or government backed insurers. In such countries governmental organizations will generally determine firstly if a medicinal product might be reimbursed and secondly the maximum price payable.
Similarly, in many countries outside the U.S., pharmaceutical pricing is subject to regulatory market access control, particularly in countries where healthcare is provided mainly through government funding or government backed insurers.
An important factor is the relative timing of the market introduction of our products and our competitors’ products. Accordingly, the speed with which we can develop products, complete the clinical trials and approval processes, and supply commercial quantities of the products to the market is an important competitive factor.
Accordingly, the speed with which we can develop products, complete the clinical trials and approval processes, and supply commercial quantities of the products to the market is an important competitive factor. Our competitive position also may depend upon our ability to show differentiation with a product that is more efficacious and/or less expensive and quicker to manufacture.
We continue to prepare, file, and prosecute patent applications to provide broad and strong protection of our proprietary rights related to our vaccine products and our adjuvant program. The Federal Technology Transfer Act of 1986 and related statutory guidance encourages the dissemination of science and technology innovation. While our expired contract with the U.S.
The Federal Technology Transfer Act of 1986 and related statutory guidance encourages the dissemination of science and technology innovation. While our expired contract with the U.S.
Protein antigens are purified and organized around a polysorbate-based nanoparticle core in a configuration that resembles their native presentation. This results in a highly immunogenic nanoparticle that is ready to be formulated with Matrix-M™ adjuvant. Matrix-M™ Adjuvant Our proprietary Matrix-M™ adjuvant has been a key differentiator within our platform.
Our testing shows this results in a highly immunogenic nanoparticle that is ready to be formulated with Matrix-M™ adjuvant. Matrix-M™ Adjuvant Our proprietary Matrix-M™ adjuvant is a key differentiator within our platform.
Examples of initiatives supportive of these focus areas include the following: Environmental Sustainability • Resource management and greenhouse gas reduction strategy, which includes tracking emissions. • An approach to Procurement that incorporates sustainability metrics into vendor evaluation and selection rubrics. • Lease of approximately 170,000 square foot property in Gaithersburg, Maryland at 700 Quince Orchard Road, certified LEED Silver and designed with energy efficiency and sustainability measures in place. • Conserving water (e.g., by replacing single-serve water bottles with refillable options) and monitoring energy use across multi-use leased and owned facilities. • Award of WELL certifications at multiple leased facilities. • Sustainable saponin sourcing from our partner Desert King, the key supplier of the Quillaja saponaria (Soapbark), a tree native to central Chile.
Sustainability • Resource management and greenhouse gas reduction strategy, which includes tracking emissions. • An approach to Procurement that incorporates sustainability metrics into vendor evaluation and selection rubrics. • Conserving water and monitoring energy use across multi-use leased and owned facilities. • Sustainable saponin sourcing from our partner Desert King, the key supplier of the Quillaja saponaria (Soapbark), a tree native to central Chile.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile we have received full MA, provisional registration, CMA, or EUA for our prototype COVID-19 Vaccine and our updated COVID-19 vaccine in a number of jurisdictions, we may be unable to obtain full regulatory approvals in the U.S. or other jurisdictions for our updated vaccine or new versions in the future or produce a successful vaccine in a timely manner, if at all. • The emergence and transmissibility of variants of the SARS-CoV-2 virus, may affect market acceptance or sales of our COVID-19 Vaccine, and our strategy to develop new versions of our COVID-19 Vaccine to protect against certain variants may not be successful. • We are a biotechnology company and face significant risk in developing, manufacturing, and commercializing our products and product candidates. • Because we depend on third parties to conduct some of our laboratory testing and clinical trials, and a significant amount of our vaccine manufacturing and distribution, we may encounter delays in or lose some control over our efforts to develop and supply products. • We are highly dependent on the commercial success of our COVID-19 Vaccine, and even though we have received provisional registration, CMA, EUA or full marketing authorization in certain jurisdictions for our COVID-19 Vaccine, and even if we have products licensed in additional markets, our vaccine products may not be initially or ever profitable. • The risks associated with COVID-19 and related governmental public health policies continue to evolve, which may have unpredictable effects on the prospects for commercial success of our COVID-19 Vaccine. • Many of our competitors have significantly greater resources and experience, which may negatively impact our commercial opportunities and those of our current and future licensees. • There is significant competition in the development of a vaccine against COVID-19 and a combined vaccine against COVID-19 and influenza, and we may never see returns on the significant resources we are devoting to our vaccine candidates. • We may not succeed in obtaining full U.S.
Biggest changeWhile we have received CMA, EUA or full approval for our prototype COVID-19 Vaccine and our updated COVID-19 vaccine in a number of jurisdictions, we may be unable to obtain full regulatory approvals in the U.S. or other jurisdictions for our updated vaccine or new versions in the future, or produce a successful vaccine in a timely manner, if at all. • Because we depend on third parties to conduct some of our laboratory testing and clinical trials, and a significant amount of our vaccine manufacturing and distribution, we may encounter delays in or lose some control over our efforts to develop and supply products and product candidates. • Many of our competitors have significantly greater resources and experience, which may negatively impact our commercial opportunities and those of our current and future licensees. • There is significant competition in the development of a vaccine against COVID-19 and a combined vaccine against COVID-19 and influenza, and we may never see returns on the significant resources we are devoting to our vaccine candidates. • We may not succeed in obtaining full U.S.
FDA granted Fast Track Designation for our prototype vaccine in November 2020, and for our recombinant quadrivalent seasonal influenza vaccine candidate, in January 2020. We may also seek Fast Track Designation for more of our other vaccine candidates.
FDA granted Fast Track Designation for our recombinant quadrivalent seasonal influenza vaccine candidate in January 2020 and prototype vaccine in November 2020. We may also seek Fast Track Designation for more of our other vaccine candidates.
If we adopt an alternative name, we would lose the benefit of any existing trademark applications for such developmental candidate and may be required to expend significant additional resources in an effort to identify a suitable product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the U.S.
If we adopt an alternative name, we may lose the benefit of any existing trademark applications for such developmental candidate and may be required to expend significant additional resources in an effort to identify a suitable product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the U.S.
Even if we are ultimately successful, defending any such challenges may cause us to incur substantial expenses and may require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.
Even if we are ultimately successful, defending any such challenges may cause us to incur substantial expenses and may require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.
During 2023, we recorded a charge of $4.5 million related to one-time employee severance and benefit costs and $10.1 million costs related to the consolidation of facilities and infrastructure, the majority of which were incurred in the second quarter of 2023.
During 2023, we recorded a charge of $4.5 million related to one-time employee severance and benefit costs and $10.1 million of costs related to the consolidation of facilities and infrastructure, the majority of which were incurred in the second quarter of 2023.
In the ordinary course of our business, we and many of our current and future strategic partners, vendors, contractors, and consultants collect and store sensitive data, including intellectual property, our proprietary business information and data about our clinical participants, suppliers and business partners, including personally identifiable information.
In the ordinary course of our business, we and many of our current and future strategic partners, vendors, contractors, and consultants collect and store sensitive data, including intellectual property, our proprietary business information and data about our clinical participants, suppliers and business partners, including sensitive personally identifiable information.
The applicable U.S. federal and state healthcare laws and regulations (which may be comparable to foreign laws existing in foreign countries) that may affect our ability to operate include: • the Federal Food, Drug and Cosmetic Act, which among other things, strictly regulates drug product marketing and promotion and prohibits manufacturers from marketing such products for unapproved uses; • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving or providing remuneration, directly or indirectly, to induce the referral for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid; • federal false claims laws, including the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, information or claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent; • manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims; the FCA also permits a private individual acting as whistleblower to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; • federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; • the federal Physician Payment Sunshine Act and its implementing regulations, which require manufacturers of drugs, devices, biologicals, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the DHHS information related 49 Table of Contents to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; effective January 1, 2022, these reporting obligations extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners; similar reporting requirements have also been enacted on the state level in the U.S., and an increasing number of countries worldwide either have adopted or are considering similar laws requiring disclosure of interactions with health care professionals; • the federal law known as HIPAA, which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • state law equivalents of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state gift ban and transparency laws, many of which state laws differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts; and • state laws restricting interactions with healthcare providers and other members of the healthcare community or requiring pharmaceutical manufacturers to implement certain compliance standards.
The applicable U.S. federal and state healthcare laws and regulations (which may be comparable to foreign laws existing in foreign countries) that may affect our ability to operate include: • the Federal Food, Drug and Cosmetic Act, which among other things, strictly regulates drug product marketing and promotion and prohibits manufacturers from marketing such products for unapproved uses; • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving or providing remuneration, directly or indirectly, to induce the referral for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid; • federal false claims laws, including the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, information or claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent; • manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims; the FCA also permits a private individual acting as whistleblower to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; • federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; • the federal Physician Payment Sunshine Act and its implementing regulations, which require manufacturers of drugs, devices, biologicals, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the DHHS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; effective January 1, 2022, these reporting obligations extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners; similar reporting requirements have also been enacted on the state level in the U.S., and an increasing number of countries worldwide either have adopted or are considering similar laws requiring disclosure of interactions with health care professionals; • the federal law known as HIPAA, which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • state law equivalents of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state gift ban and transparency laws, many of which state laws differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts; and 50 Table o f Contents • state laws restricting interactions with healthcare providers and other members of the healthcare community or requiring pharmaceutical manufacturers to implement certain compliance standards.
The market price of our common stock may be influenced by many other factors, including: • future announcements about us or our collaborators or competitors, including the results of testing, technological innovations or new commercial products; • clinical trial results; • delays in making regulatory submissions; • depletion of our cash reserves; • sale of equity securities or issuance of additional debt; • announcement by us of significant strategic partnerships, collaborations, joint ventures, capital commitments or acquisitions; • changes in government regulations; • impact of competitor successes and in particular development success of vaccine candidates that compete with our own vaccine candidates; • developments in our relationships with our collaboration and funding partners; 60 Table of Contents • announcements relating to health care reform and reimbursement levels for new vaccines and other matters affecting our business and results, regardless of accuracy; • sales of substantial amounts of our stock by us or existing stockholders (including stock by insiders or 5% stockholders); • development, spread or new announcements related to pandemic diseases; • litigation; • public concern as to the safety of our products; • significant set-backs or concerns with the industry or the market as a whole; • regulatory inquiries, reviews and potential action, including from the U.S.
The market price of our common stock may be influenced by many other factors, including: • future announcements about us or our collaborators or competitors, including the results of testing, technological innovations or new commercial products; • clinical trial results; • delays in making regulatory submissions; • depletion of our cash reserves; • sale of equity securities or issuance of additional debt; 60 Table o f Contents • announcement by us of significant strategic partnerships, collaborations, joint ventures, capital commitments or acquisitions; • changes in government regulations; • impact of competitor successes and in particular development success of vaccine candidates that compete with our own vaccine candidates; • developments in our relationships with our collaboration and funding partners; • announcements relating to health care reform and reimbursement levels for new vaccines and other matters affecting our business and results, regardless of accuracy; • sales of substantial amounts of our stock by us or existing stockholders (including stock by insiders or 5% stockholders); • development, spread or new announcements related to pandemic diseases; • litigation; • public concern as to the safety of our products; • significant set-backs or concerns with the industry or the market as a whole; • regulatory inquiries, reviews and potential action, including from the U.S.
Moreover, the U.S. FDA and foreign regulatory agencies require us to comply with regulations and standards, commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, safety and welfare of clinical trial participants are adequately protected. The U.S.
FDA and foreign regulatory agencies require us to comply with regulations and standards, commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, safety and welfare of clinical trial participants are adequately protected. The U.S.
Collaborators also may seek to modify or terminate relationships. Past success in establishing strategic collaborations with pharmaceutical and biotechnology companies, non-profit organizations and government agencies in the past is no guarantee of future success in entering into new relationships or in performing under existing relationships.
Collaborators also may seek to modify or terminate relationships. Past success in establishing strategic collaborations with pharmaceutical and biotechnology companies, non-profit organizations and government agencies is no guarantee of future success in entering into new relationships or in performing under existing relationships.
Under certain supply agreements, if we do not timely achieve requisite regulatory milestones for our COVID-19 Vaccine in the relevant jurisdictions, obtain supportive recommendations from governmental advisory committees, and/or achieve product volume or delivery timing obligations, purchasers may seek to terminate such agreements, reduce their purchase commitments, require us to refund all or some prepayments we have received, or renegotiate such agreements, each of which could have a material and adverse effect on our financial condition.
Under certain APAs, if we do not timely achieve requisite regulatory milestones for our COVID-19 Vaccine in the relevant jurisdictions, obtain supportive recommendations from governmental advisory committees, and/or achieve product volume or delivery timing obligations, purchasers may seek to terminate such agreements, reduce their purchase commitments, require us to refund all or some prepayments we have received, or renegotiate such agreements, each of which could have a material and adverse effect on our financial condition.
Any access, disclosure or other loss of information, whether stored by us or our partners, or other cyberattack causing disruption to our business, including ransomware, could result in reputational, business, and competitive harms, significant costs related to remediation and strengthening our cyber defenses, legal claims or proceedings, government investigations, liability including under laws that protect the privacy of personal information, and increased insurance premiums, any of which could have a material adverse effect on our business, operations or financial results.
Any access, disclosure or other loss of information, whether stored by us or our partners, or other cyberattack causing disruption to our business, including ransomware, could result in reputational, business, and competitive harms, significant costs related to remediation and strengthening our cyber defenses, legal claims or proceedings, governmental investigations, liability including under laws that protect the privacy of personal information, and increased insurance premiums, any of which could have a material adverse effect on our business, operations or financial results.
Some of these proposed and implemented reforms could result in reduced drug pricing or reimbursement rates for medical products, and while we have no current vaccines available for commercial sale other than subject to provisional registration, conditional marketing authorization or emergency use authorization in certain foreign jurisdictions, the impact of such reform could nevertheless adversely affect our business strategy, operations and financial results.
Some of these proposed and implemented reforms could result in reduced drug pricing or reimbursement rates for medical products, and while we have no current vaccines available for commercial sale other than subject to conditional marketing authorization or emergency use authorization in certain foreign jurisdictions, the impact of such reform could nevertheless adversely affect our business strategy, operations and financial results.
Large and established companies, such as Merck & Co., Inc., GlaxoSmithKline plc, CSL Ltd., Sanofi Pasteur, SA, Pfizer Inc., Johnson & Johnson, AstraZeneca, and Moderna, among others, compete in the vaccine market.
Large and established companies, such as Merck & Co., Inc., GlaxoSmithKline plc, CSL Ltd., Sanofi Pasteur, SA, Pfizer Inc., AstraZeneca, and Moderna, among others, compete in the vaccine market.
Under the terms of the Amended and Restated UK Supply Agreement, the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses (the “Conditional Doses”) of our prototype vaccine, with the number of Conditional Doses contingent on, and subject to reduction based on, our timely achievement of supportive recommendations from the JCVI that is approved by the UK Secretary of State for Health.
Under the terms of the Amended and Restated UK Supply Agreement, the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses (the “Conditional Doses”) of our prototype COVID-19 vaccine, with the number of Conditional Doses contingent on, and subject to reduction based on, our timely achievement of supportive recommendations from the JCVI that is approved by the UK Secretary of State for Health.
Regarding future COVID-19 vaccine development, we may fail to receive authorization by regulatory authorities if we are unable to generate sufficient batch analysis data to demonstrate batch-to-batch consistency at commercial scale, if the data generated from our incremental research and development program do not support continued effectiveness of the vaccine to protect individuals against the then-relevant variant of SARS-CoV-2 because the vaccine does not induce an adequate level of neutralization titers against such variant, or if the product otherwise exhibits an unacceptable safety profile, rendering the benefit/risk balance unfavorable.
Regarding future COVID-19 vaccine development, we may fail to receive authorization for updated variants of SARS-CoV-2 by regulatory authorities if we are unable to generate sufficient batch analysis data to demonstrate batch-to-batch consistency at commercial scale, if the data generated from our incremental research and development program do not support continued effectiveness of the vaccine to protect individuals against the then-relevant variant of SARS-CoV-2 because the vaccine does not induce an adequate level of neutralization titers against such variant, or if the product otherwise exhibits an unacceptable safety profile, rendering the benefit/risk balance unfavorable.
Unexpected safety issues in these circumstances could lead to significant reputational damage for Novavax and our technology platform going forward and other issues, including delays in our other programs, the need for re-design of our clinical trials and the need for significant additional financial resources. For example, although we currently operate under an emergency use authorization provided by the U.S.
Unexpected safety issues in these circumstances could lead to significant reputational damage for us and our technology platform going forward and other issues, including delays in our other programs, the need for re-design of our clinical trials and the need for significant additional financial resources. For example, although we currently operate under an emergency use authorization provided by the U.S.
The collaborations we have established or may establish may not result in the successful development or commercialization of any vaccine candidates for several reasons, including the fact that: • we may not have the ability to control the activities of our partners and cannot provide assurance that they will fulfill their obligations to us, including with respect to the license, development and commercialization of vaccine candidates, in a timely manner or at all; 37 Table of Contents • such partners may not devote sufficient resources to our vaccine candidates or properly maintain or defend our intellectual property rights; • our partners could independently develop, or develop with third parties, products that compete directly or indirectly with our vaccine candidates if such partners believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • any failure on the part of our partners to perform or satisfy their obligations to us could lead to delays in the development or commercialization of our vaccine candidates and affect our ability to realize product revenue; and • disagreements, including disputes over the ownership of technology developed with such collaborators, could result in litigation, which would be time consuming and expensive, and may delay or terminate research and development efforts, regulatory approvals and commercialization activities.
The collaborations we have established or may establish may not result in the successful development or commercialization of any vaccine candidates for several reasons, including the fact that: • we may not have the ability to control the activities of our partners and cannot provide assurance that they will fulfill their obligations to us, including with respect to the license, development and commercialization of our COVID-19 Vaccine or our vaccine candidates, in a timely manner or at all; • such partners may not devote sufficient resources to our COVID-19 Vaccine or vaccine candidates or properly maintain or defend our intellectual property rights; • our partners could independently develop, or develop with third parties, products that compete directly or indirectly with our COVID-19 Vaccine or vaccine candidates if such partners believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • any failure on the part of our partners to perform or satisfy their obligations to us could lead to delays in the development or commercialization of our COVID-19 Vaccine or vaccine candidates and affect our ability to realize product revenue; and • disagreements, including disputes over the ownership of technology developed with such collaborators, could result in litigation, which would be time consuming and expensive, and may delay or terminate research and development efforts, regulatory approvals and commercialization activities.
Additionally, regulatory authorities outside the U.S. might not accept data from trials conducted in other countries. Although our COVID-19 Vaccine has received provisional registration, conditional marketing authorization or emergency use authorization in a number of jurisdictions, we may not obtain regulatory approvals in other relevant jurisdictions on a timely basis, if at all.
Additionally, regulatory authorities outside the U.S. might not accept data from trials conducted in other countries. Although our COVID-19 Vaccine has received conditional marketing authorization or emergency use authorization in a number of jurisdictions, we may not obtain regulatory approvals in other relevant jurisdictions on a timely basis, if at all.
Furthermore, negative interpretations of clinical trial data or setbacks, or perceived setbacks, with respect to manufacturing ability and/or capacity or regulatory filing timelines for our COVID-19 Vaccine or our other vaccine candidates, as well as the competitive landscape posed by other COVID-19 vaccines, may impair our ability to raise additional financing on favorable terms, or at all.
Furthermore, negative interpretations of clinical trial data or setbacks, or perceived setbacks, with respect to manufacturing ability and/or capacity or regulatory filing timelines for our vaccine candidates, as well as the competitive landscape posed by other vaccines, may impair our ability to raise additional financing on favorable terms, or at all.
Novavax has received a number of regulatory approvals in ex-U.S. jurisdictions and has commenced commercial operations in these international locations, including partnering with third-parties in certain higher-risk jurisdictions. Further, a portion of our business with respect to our manufacturing is conducted outside of the U.S. in higher-risk jurisdictions. We expect our international activities to increase in the future.
We have received a number of regulatory approvals in ex-U.S. jurisdictions and has commenced commercial operations in these international locations, including partnering with third-parties in certain higher-risk jurisdictions. Further, a portion of our business with respect to our manufacturing is conducted outside of the U.S. in higher-risk jurisdictions. We expect our international activities to increase in the future.
On March 17, 2020, the Secretary of DHHS issued a declaration under the PREP Act and has issued subsequent amendments thereto to provide liability immunity for activities related to certain countermeasures against the evolving effects of COVID-19. The current declaration will end on December 31, 2024, unless it is renewed.
On March 17, 2020, the Secretary of DHHS issued a declaration under the PREP Act and has issued subsequent amendments thereto to provide liability immunity for activities related to certain countermeasures against the evolving effects of COVID-19. The current declaration will end on December 31, 2029, unless it is renewed.
FDA of an IND, which must become effective before clinical trials may commence; • performance of adequate and well controlled clinical trials to establish the safety and efficacy of the investigational product in the intended target population; • performance of a consistent and reproducible manufacturing process at commercial scale capable of passing U.S.
FDA of an IND, which must become effective before clinical trials may commence; • performance of adequate and well controlled clinical trials to establish the safety and efficacy of the investigational product in the intended target population; • performance of a consistent and reproducible manufacturing process at commercial scale capable of passing U.S. FDA inspection; • submission to the U.S.
Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions; • new or changes in interpretations of existing trade measures, including tariffs, embargoes, sanctions, import restrictions, and export licensing requirements; • difficulties in and costs of staffing, managing and operating our international operations; • changes in environmental, health and safety laws; • fluctuations in foreign currency exchange rates; 58 Table of Contents • new or changes in interpretations of existing tax laws; • political instability and actual or anticipated military or potential conflicts (including, without limitation, the ongoing conflict between Russia and Ukraine, and a wider European or global conflict); • economic instability, inflation, recession and interest rate fluctuations; • minimal or diminished protection of intellectual property in many jurisdictions; and • possible nationalization and expropriation.
Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions; 58 Table o f Contents • new or changes in interpretations of existing trade measures, including tariffs, embargoes, sanctions, import restrictions, and export licensing requirements; • difficulties in and costs of staffing, managing and operating our international operations; • changes in environmental, health and safety laws; • fluctuations in foreign currency exchange rates; • new or changes in interpretations of existing tax laws; • political instability and actual or anticipated military or potential conflicts (including, without limitation, the ongoing conflict between Russia and Ukraine, Israel and Hamas, and a wider European or global conflict); • economic instability, inflation, recession and interest rate fluctuations; • minimal or diminished protection of intellectual property in many jurisdictions; and • possible nationalization and expropriation.
We also must operate without infringing the proprietary rights of third-parties or allowing third-parties to infringe our rights. We currently have or have rights to over 630 U.S. and foreign patents and patent applications covering our technologies. However, patent issues relating to pharmaceuticals and biologics involve complex legal, scientific and factual questions.
We also must operate without infringing the proprietary rights of third-parties or allowing third-parties to infringe our rights. We currently have or have rights to over 680 U.S. and foreign patents and patent applications covering our technologies. However, patent issues relating to pharmaceuticals and biologics involve complex legal, scientific and factual questions.
If we are unsuccessful in defending against ownership or inventorship challenges, a court may require us to list additional inventors, may invalidate the patent, or may transfer ownership of the patent to a third party. Any of these outcomes may harm our ability to exclude competitors and potentially impact our commercial success.
If we are unsuccessful in defending against ownership or inventorship challenges, a court may require us to list additional inventors, may invalidate the patent, or may transfer ownership, or vest joint ownership, of the patent to a third party. Any of these outcomes may harm our ability to exclude competitors and potentially impact our commercial success.
The timing to fulfill performance obligations related to supply agreements will depend on timing of product manufacturing, receipt of marketing authorizations for additional indications, delivery of doses based on customer demand, and the ability of the customer to request variant vaccine in place of prototype vaccine under certain of our supply agreements.
The timing to fulfill performance obligations related to supply agreements will depend on timing of product manufacturing, receipt of marketing authorizations for additional indications, delivery of doses based on customer demand, and the ability of the customer to request variant vaccine in place of prototype COVID-19 vaccine under certain of our supply agreements.
None of our vaccine candidates has yet gained full regulatory approval in the U.S., although our COVID-19 Vaccine has received provisional registration, conditional marketing authorization, emergency use authorization, or full approval in the various jurisdictions. We also have vaccine candidates in clinical trials and preclinical laboratory or animal studies.
None of our vaccine candidates has yet gained full regulatory approval in the U.S., although our COVID-19 Vaccine has received conditional marketing authorization, emergency use authorization, or full approval in the various jurisdictions. We also have vaccine candidates in clinical trials and preclinical laboratory or animal studies.
If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions, or incur reputational or other harm to our business. 63 Table of Contents Item 1B. UNRESOLVED STAFF COMMENTS None.
If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions, or incur reputational or other harm to our business. 63 Table o f Contents Item 1B. UNRESOLVED STAFF COMMENTS None.
These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information, and such risk has been enhanced by the departure of employees in connection with our global restructuring and cost reduction plan. 51 Table of Contents Failure to obtain trademark registrations for proposed product names/brands, in the U.S. or abroad, may adversely impact our business.
These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information, and such risk has been enhanced by the departure of employees in connection with our global restructuring and cost reduction plan. Failure to obtain trademark registrations for proposed product names/brands, in the U.S. or abroad, may adversely impact our business.
Principal competitive factors in our industry include: • the quality and breadth of an organization’s technology; • management of the organization and the execution of the organization’s strategy; 41 Table of Contents • the skill and experience of an organization’s employees and its ability to recruit and retain skilled and experienced employees; • an organization’s intellectual property portfolio; • the range of capabilities, from target identification and validation to drug discovery and development to manufacturing and marketing; and • the availability of substantial capital resources to fund discovery, development and commercialization activities.
Principal competitive factors in our industry include: • the quality and breadth of an organization’s technology; • management of the organization and the execution of the organization’s strategy; • the skill and experience of an organization’s employees and its ability to recruit and retain skilled and experienced employees; • an organization’s intellectual property portfolio; • the range of capabilities, from target identification and validation to drug discovery and development to manufacturing and marketing; and • the availability of substantial capital resources to fund discovery, development and commercialization activities.
Only a small fraction of biopharmaceutical development programs ultimately result in commercial products or even product candidates and a number of events could delay our development efforts and negatively impact our ability to make regulatory submissions or obtain regulatory approval for, and to manufacture, market and sell, our COVID-19 Vaccine 33 Table of Contents or any other vaccine on our projected timelines, if at all.
Only a small fraction of biopharmaceutical development programs ultimately result in commercial products or even product candidates and a number of events could delay our development efforts and negatively impact our ability to make regulatory submissions or obtain regulatory approval for, and to manufacture, market and sell, our COVID-19 Vaccine or any other vaccine on our projected timelines, if at all.
If a prolonged government shutdown or slowdown of the relevant regulatory authority occurs, it could significantly impact the ability of that Authority to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown or slowdown of the relevant regulatory authority occurs, it could significantly impact the ability of such government or authority to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Further, counterparties to certain of our existing supply agreements may request variant-specific vaccines in place of our COVID-19 Vaccine and, depending on when we are able to offer such variant-specific vaccines, if at all, such counterparties may seek to delay, reduce or otherwise renegotiate their purchase commitments, which may adversely impact our ability to realize the full financial benefit of such supply agreements.
Further, counterparties to certain of our existing APAs may request variant-specific vaccines in place of our COVID-19 Vaccine and, depending on when we are able to offer such variant-specific vaccines, if at all, such counterparties may seek to delay, reduce or otherwise renegotiate their purchase commitments, which may adversely impact our ability to realize the full financial benefit of such APAs.
Furthermore, if any 42 Table of Contents competitors are successful in producing a more efficacious vaccine or other treatment for COVID-19 (including against emerging variant strains), or if any competitors are able to manufacture and distribute any such vaccines or treatments with greater efficiency there may be a diversion of potential governmental and other funding away from us and toward such other parties.
Furthermore, if any competitors are successful in producing a more efficacious vaccine or other treatment for COVID-19 (including against emerging variant strains), or if any competitors are able to manufacture and distribute any such vaccines or treatments with greater efficiency there may be a diversion of potential governmental and other funding away from us and toward such other parties.
The antigen component of our COVID-19 Vaccine is currently being manufactured at SIIPL in India, and the Matrix-M TM adjuvant component of our COVID-19 Vaccine is currently being manufactured at Novavax AB as well as our partnered manufacturing site at AGC Biologics in Europe.
The antigen component of our COVID-19 Vaccine is currently being manufactured at SII in India, and the Matrix-M TM adjuvant component of our COVID-19 Vaccine is currently being manufactured at Novavax AB as well as our partnered manufacturing site at AGC Biologics in Europe.
While we have received provisional registration, conditional marketing authorization or emergency use authorization for our COVID-19 Vaccine in a number of jurisdictions, we may be unable to obtain full regulatory approvals in the U.S. or other jurisdictions for our updated vaccine or new versions in the future or produce a successful vaccine in a timely manner, if at all.
While we have received conditional marketing authorization, emergency use authorization or full approval for our COVID-19 Vaccine in a number of jurisdictions, we may be unable to obtain full regulatory approvals in the U.S. or other jurisdictions for our updated COVID-19 vaccine or new versions in the future or produce a successful vaccine in a timely manner, if at all.
The secure maintenance of this information is critical to our operations and business strategy. Some of this information represents an attractive target of criminal attack by malicious third parties with a wide range of motives and expertise, including nation-states, organized criminal groups, “hacktivists,” patient groups, disgruntled current or former employees and others.
The security of this information is critical to our operations and business strategy. Some of this information represents an attractive target of criminal attack by malicious third parties with a wide range of motives and expertise, including nation-states, organized criminal groups, “hacktivists,” patient groups, disgruntled current or former employees and others.
If investors perceive these results to be negative, the market price for our common stock could be significantly harmed. 52 Table of Contents The scope, validity, and ownership of our patent claims may be challenged in various venues and, if we do not prevail, our ability to exclude competitors may be harmed, potentially reducing our ability to succeed commercially.
If investors perceive these results to be negative, the market price for our common stock could be significantly harmed. The scope, validity, and ownership of our patent claims may be challenged in various venues and, if we do not prevail, our ability to exclude competitors may be harmed, potentially reducing our ability to succeed commercially.
If we are unable to accurately forecast demand for our COVID-19 Vaccine and the required services from third-party manufacturers, our results of operations could be materially harmed. Manufacturing our COVID-19 Vaccine and our other vaccine candidates involves a complicated process with which we have limited experience.
If we are unable to accurately forecast demand for our COVID-19 Vaccine and the required services from third-party manufacturers, our results of operations could be materially harmed. Manufacturing our COVID-19 Vaccine and our other vaccine candidates involves a complicated process with which we have limited experience compared to some of our competitors.
FDA and other agencies may also slow the time necessary for new drugs to be reviewed and approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the USG has shut down several times and certain regulatory agencies, such as the U.S.
Disruptions at the U.S. FDA and other agencies may also slow the time necessary for new drugs to be reviewed and approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the U.S.
The California Privacy Rights Act (“CPRA”), became operational in 2023 and expands on the CCPA, creating new consumer rights and protections, including the right to correct personal information, the right to opt out of the use of personal information in automated decision making, the right to opt out of “sharing” consumer’s personal information for cross-context behavioral advertising, and the right to restrict use and disclosure of sensitive personal information.
The California Privacy Rights Act (“CPRA”), which became operational in 2023 and expands on the CCPA, created new consumer rights and protections, including the right to correct personal information, the right to opt out of the use of personal information in automated decision making, the right to opt out of “sharing” consumer’s personal information for cross-context behavioral advertising, and the right to restrict use and disclosure of sensitive personal information.
Under the Amended and Restated UK Supply Agreement, the Authority also has the option to purchase up to an additional 44 million doses, in one or more tranches, through 2024.
Under the Amended and Restated UK Supply Agreement, the Authority also had the option to purchase up to an additional 44 million doses, in one or more tranches, through 2024.
In any such event, our 34 Table of Contents preclinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval of, or successfully commercially manufacture on a timely basis, our vaccine candidates. We may have product liability exposure.
In any such event, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval of, or successfully commercially manufacture on a timely basis, our vaccine candidates. We may have product liability exposure.
The intense public interest, including speculation by the media, in the development of our COVID-19 Vaccine has caused significant volatility in our stock price, which we expect to continue as 62 Table of Contents data and other information from our ongoing clinical trials become publicly available.
The intense public interest, including speculation by the media, in the development of our COVID-19 Vaccine has caused significant volatility in our stock price, which we expect to continue as data and other information from our ongoing clinical trials become publicly available.
For example, in September 2022, following a delay in obtaining regulatory approval in the United Kingdom, we entered into the Amended and Restated UK Supply Agreement, which amended and restated in its entirety the Original UK Supply Agreement, which reduced the volume of vaccine doses that the Authority is committed to purchase as compared to the Original UK Supply Agreement.
For example, in September 2022, following a delay in obtaining regulatory approval in the United Kingdom, we entered into the Amended and Restated UK Supply Agreement, which amended and restated in its entirety the Original UK Supply Agreement, which reduced the volume of vaccine doses that the Authority committed to purchase.
We have in the past, and we expect in the future to license intellectual property from third parties and that these licenses will be material to our business. We will not own the patents or patent applications that underlie these licenses, and 53 Table of Contents we may not control either the prosecution or the enforcement of the patents.
We have in the past, and we expect in the future to license intellectual property from third parties and that these licenses will be material to our business. We will not own the patents or patent applications that underlie these licenses, and we may not control either the prosecution or the enforcement of the patents.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for our products; • withdrawal of regulatory authorizations and approvals; • voluntary or mandatory recalls of our products; • necessity for additional nonclinical or clinical studies, changes in labeling, or changes to manufacturing processes, specifications and/or facilities; • impairment of our business reputation and negative media attention; • withdrawal of clinical trial participants; • costs of related litigation; • substantial monetary awards to participants or other claimants; • loss of revenue; and • inability to commercialize our vaccine candidates.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for our products; • withdrawal of regulatory authorizations and approvals; 34 Table o f Contents • voluntary or mandatory recalls of our products; • necessity for additional nonclinical or clinical studies, changes in labeling, or changes to manufacturing processes, specifications and/or facilities; • impairment of our business reputation and negative media attention; • withdrawal of clinical trial participants; • costs of related litigation; • substantial monetary awards to participants or other claimants; • loss of revenue; and • inability to commercialize our vaccine candidates.
Holders of the Notes will have the right to require us to repurchase their Notes for cash upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be 59 Table of Contents repurchased, plus accrued and unpaid interest, if any.
Holders of the Notes will have the right to require us to repurchase their Notes for cash upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any.
The FCPA and similar worldwide anti-bribery and anti-corruption laws prohibit companies and their intermediaries from corruptly providing any payments or other benefits to foreign government officials for the purpose of obtaining or 50 Table of Contents retaining business. The U.S.
The FCPA and similar worldwide anti-bribery and anti-corruption laws prohibit companies and their intermediaries from corruptly providing any payments or other benefits to foreign government officials for the purpose of obtaining or retaining business. The U.S.
Our ongoing operating activities also depend on functioning information technology systems. We are 56 Table of Contents required to expend significant resources in an effort to protect against security incidents, and may be required or choose to spend additional resources or modify our business activities, particularly where required by applicable data privacy and security laws or regulations or industry standards.
Our ongoing operating activities also depend on functioning information technology systems. We are required to expend significant resources in an effort to protect against security incidents, and may be required or choose to spend additional resources or modify our business activities, particularly where required by applicable data privacy and security laws or regulations or industry standards.
Market acceptance of, and demand for, any product that we may develop and commercialize will depend on many factors, including: • our ability to provide acceptable evidence of safety and efficacy (including against emerging COVID-19 variants); • the prevalence and severity of adverse side effects; • whether our vaccines are differentiated from other vaccines; • availability, relative cost and relative efficacy of alternative and competing treatments; • the effectiveness of our marketing and distribution strategy; • publicity concerning our products or competing products and treatments; and • our ability to obtain sufficient third party insurance coverage or reimbursement.
Market acceptance of, and demand for, any product that we may develop and commercialize will depend on many factors, including: • our ability to provide acceptable evidence of safety and efficacy (including, for our COVID-19 Vaccine, against emerging COVID-19 variants); • the prevalence and severity of adverse side effects; • whether our vaccines are differentiated from other vaccines; • availability, relative cost and relative efficacy of alternative and competing treatments; 39 Table o f Contents • the effectiveness of our marketing and distribution strategy; • publicity concerning our products or competing products and treatments; and • our ability to obtain sufficient third party insurance coverage or reimbursement.
For example, we have extended a credit of $64.7 million under the Australia APA for a single lot of NVX-CoV2373 doses sold to the Australian government that upon pre-planned 6-month stability testing was found to have fallen below the defined specifications, and the lot was therefore removed from the market.
For example, in May 2023, we extended a credit of $64.7 million to the Australian government under the Australia APA for a single lot of NVX-CoV2373 doses sold to the Australian government in 2022 that, upon pre-planned 6-month stability testing, was found to have fallen below the defined specifications, and the lot was therefore removed from the market.
Recalls of any of our vaccine candidates would divert managerial and financial resources and have an adverse effect on our financial condition and results of operations. Additionally, a recall announcement could harm our reputation with customers and negatively affect our sales.
Recalls of our COVID-19 Vaccine or any of our vaccine candidates would divert managerial and financial resources and have an adverse effect on our financial condition and results of operations. Additionally, a recall announcement could harm our reputation with customers and negatively affect our sales.
Regardless of the disease, smaller or early-stage companies and research institutions also may prove to be significant competitors, particularly through collaborative arrangements with large and established pharmaceutical companies. As these companies develop their technologies, they may develop proprietary positions, which may prevent or limit our product development and commercialization efforts.
Smaller or early-stage companies and research institutions also may prove to be significant competitors, regardless of the diseases their product candidates target, particularly through collaborative arrangements with large and established pharmaceutical companies. As these companies develop their technologies, they may develop proprietary positions, which may prevent or limit our product development and commercialization efforts.
We may be subject to a variety of challenges from third parties that relate to the scope of the claims or to their validity. Such challenges can be mounted in post-grant review, ex parte re-examination, and inter partes review proceedings before the USPTO, or similar adversarial proceedings in other jurisdictions.
We may be subject to a variety of challenges from third parties that relate to the scope of the claims or to their validity. Such challenges can be mounted in certain US District Court proceedings, post-grant review, ex parte re-examination, and inter partes review proceedings before the USPTO, or similar adversarial proceedings in other jurisdictions.
These activities would significantly increase our capital requirements and, given our lack of sales, marketing and distribution capabilities, significantly delay the commercialization of our vaccine candidates.
These activities would significantly increase our capital requirements and, given our limited sales, marketing and distribution capabilities, significantly delay the commercialization of our vaccine candidates.
The speed with which we begin and complete the preclinical studies necessary to begin clinical trials, the clinical trials themselves and our applications for marketing approval will depend on several factors, including the following: • our ability to scale-up and maintain manufacturing capability that reproducibly generates consistent yields of product with required purity, potency and quality; that such scale-up occurs on a timely basis; and that we have access to sufficient quantities of materials for use in necessary preclinical studies and clinical trials; • regulatory authority review and approval of proposed clinical trial protocols; • approval of clinical trials protocols and informed consent forms by institutional review boards responsible for overseeing the ethical conduct of the trial; • the rate of participant enrollment and retention, which is a function of many factors, including the size of the participant population, the proximity of participants to clinical sites, the eligibility criteria for the clinical trial and the nature of the protocol; • unfavorable test results or side effects experienced by clinical trial participants; 44 Table of Contents • analysis of data obtained from preclinical and clinical activities, which are susceptible to varying interpretations and which interpretations could delay, limit, result in the suspension or termination of, or prevent further conduct of clinical studies or regulatory approval; • the availability of skilled and experienced staff to conduct and monitor clinical trials and to prepare the appropriate regulatory applications; and • changes in the policies of regulatory authorities for drug or vaccine approval during the period of product development.
The speed with which we begin and complete the preclinical studies necessary to begin clinical trials, the clinical trials themselves and our applications for marketing approval will depend on several factors, including the following: • our ability to scale-up and maintain manufacturing capability that reproducibly generates consistent yields of product with required purity, potency and quality; that such scale-up occurs on a timely basis; and that we have access to sufficient quantities of materials for use in necessary preclinical studies and clinical trials; • regulatory authority review and approval of proposed clinical trial protocols; • approval of clinical trials protocols and informed consent forms by institutional review boards responsible for overseeing the ethical conduct of the trial; • the rate of participant enrollment and retention, which is a function of many factors, including the size of the participant population, the proximity of participants to clinical sites, the eligibility criteria for the clinical trial and the nature of the protocol; • unfavorable test results or side effects experienced by clinical trial participants; 44 Table o f Contents • analysis of data obtained from preclinical and clinical activities, which are susceptible to varying interpretations and which interpretations could delay, limit, result in the suspension or termination of, or prevent further conduct of clinical studies or regulatory approval; • the availability of skilled and experienced staff to conduct and monitor clinical trials and to prepare the appropriate regulatory applications; and • changes in the policies of regulatory authorities for drug or vaccine development and approval during the period of product development, including, but not limited to, as a result of the change in presidential administration and leadership of DHHS in January 2025.
The planned workforce reduction includes an approximately 25% reduction in our global workforce, comprised of an approximately 20% reduction in full-time Novavax employees and the remainder comprised of contractors and consultants. We expect the full annual impact of the cost savings to be realized in 2024.
The planned workforce reduction includes an approximately 25% reduction in our global workforce, comprised of an approximately 20% reduction in full-time Novavax employees and the remainder comprised of contractors and consultants. We realized the full annual impact of the cost savings in 2024.
FDA or other regulatory authorities for their products sooner than we do or for products that are more effective or less costly than ours, our commercial opportunity could be significantly reduced. In order to effectively compete, we will have to make substantial investments in development, testing, manufacturing and sales and marketing or partner with one or more established companies.
FDA or other regulatory authorities for their products sooner than we do or for products that are more effective or less costly than ours, our commercial opportunity could be significantly reduced. 41 Table o f Contents In order to effectively compete, we will have to make substantial investments in development, testing, manufacturing and sales and marketing or partner with one or more established companies.
Even though we have reported positive data from Phase 1, 2 and 3 clinical trials, and we and our partners have received either provisional registration, conditional marketing authorization, emergency use authorization, or full approval from the World Health Organization and in several jurisdictions, suc h results may not be sufficient to support regulatory submissions, authorizations and approvals, accelerated or otherwise, in any other relevant jurisdictions on our projected timelines, if at all.
Even though we have reported positive data from Phase 1, 2 and 3 clinical trials, and we and our partners have received either conditional marketing authorization, emergency use authorization, or full approval from several jurisdictions or the WHO, suc h results may not be sufficient to support regulatory submissions, authorizations and approvals, accelerated or otherwise, in any other relevant jurisdictions on our projected timelines, if at all.
We also may need to pay a ransom if a “ransomware” infection prevents access or use of our systems and we may face reputational and other harms in addition to the cost of the ransom if an attacker steals certain critical data in the course of such an attack.
These costs may exceed our insurance. We also may need to pay a ransom if a “ransomware” infection prevents access or use of our systems and we may face reputational and other harms in addition to the cost of the ransom if an attacker steals certain critical data in the course of such an attack.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive 49 Table o f Contents programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.
We do not expect our business to be able to generate cash flow from operations sufficient to service our debt and make necessary capital expenditures and may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.
We do not expect our business to 59 Table o f Contents be able to generate cash flow from operations sufficient to service our debt and make necessary capital expenditures and may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.
If we are unable to implement a valid compliance mechanism for cross-border personal information transfers, we may face increased exposure to regulatory actions, substantial fines and injunctions against processing or transferring personal 57 Table of Contents information from Europe to the U.S.
If we are unable to implement a valid compliance mechanism for cross-border personal information transfers, we may face increased exposure to regulatory actions, substantial fines and injunctions against processing or transferring personal information from Europe to the U.S.
Third-party manufacturers also must receive U.S. FDA or equivalent foreign regulatory body approval before they can produce clinical material or commercial product which could cause delays and alter our production schedule. Our COVID-19 vaccines are in competition with other products for access to these third-party facilities and may be subject to delays in manufacture if third parties prioritize other products.
Third-party manufacturers also must receive U.S. FDA or equivalent foreign regulatory body approval before they can produce clinical material or commercial product which could cause delays and alter our production schedule. Our COVID-19 Vaccine is in competition with other products for access to these third-party facilities and may be subject to manufacturing delays if third parties prioritize other products.
The Company expects the full annual impact of the cost savings to be realized in 2025 and approximately 85% of the annual impact, excluding one-time charges, to be realized in 2024 due to timing of implementing the measures and the applicable laws, regulations and other factors in the jurisdictions in which it operates.
We expect the full annual impact of the cost savings to be realized in 2025 and approximately 85% of the annual impact, excluding one-time charges, to be realized in 2024 due to timing of implementing the measures and the applicable laws, regulations and other factors in the jurisdictions in which it operates.
FDA, the SEC and other regulatory authorities could hinder their ability to hire and retain key leadership and other personnel, or otherwise perform their normal functions on which the operation of our business may rely, which could negatively impact our ability to develop or commercialize new products or services, access capital markets, or otherwise operate our business. 47 Table of Contents The ability of the U.S.
FDA, the SEC and other regulatory authorities could hinder their ability to hire and retain key leadership and other personnel, or otherwise perform their normal functions on which the operation of our business may rely, which could negatively impact our ability to develop or commercialize new products or services, access capital markets, or otherwise operate our business.
However, if these efforts are unsuccessful, these candidates do not receive regulatory approvals expeditiously, we are slower to develop variant-specific or bivalent vaccines than competitors, these vaccine candidates prove less effective than competitors’ vaccines, or we are unable to successfully manufacture, distribute or market such vaccine candidates once approved, these shortcomings may lead to reputational harm, loss of market share, and adverse financial results.
However, if these efforts are unsuccessful, these candidates do not receive regulatory approvals expeditiously, we are slower to develop variant-specific vaccines than 32 Table o f Contents competitors, these vaccine candidates prove less effective than competitors’ vaccines, or we are unable to successfully manufacture, distribute or market such vaccine candidates once approved, these shortcomings may lead to reputational harm, loss of market share, and adverse financial results.
In the U.S., these laws include the Occupational Safety and Health Act, the Toxic Test Substances Control Act and the Resource Conservation and Recovery Act. Similar national and local regulations govern our facilities in Sweden, the Czech Republic, and Switzerland. We cannot eliminate the risk of accidental contamination or 48 Table of Contents discharge or injury from these materials.
In the U.S., these laws include the Occupational Safety and Health Act, the Toxic Test Substances Control Act and the Resource Conservation and Recovery Act. Similar national and local regulations govern our facilities in Sweden and Switzerland. We cannot eliminate the risk of accidental contamination or discharge or injury from these materials.
If the Authority did not purchase the Conditional Doses or the number of such Conditional Doses was reduced below 15 million doses of our prototype 30 Table of Contents vaccine, we would have to repay up to $225.0 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement.
If the Authority did not purchase the Conditional Doses or the number of such Conditional Doses was reduced below 15 million doses of our prototype COVID-19 vaccine, we would have to repay up to $225.0 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement.
The Canadian government may terminate the Canada APA, as amended, if we fail to receive regulatory approval for our COVID-19 Vaccine using bulk antigen produced at BMC on or before December 31, 2024.
Pursuant to the Canada APA, the Canadian government may terminate the Canada APA, as amended, as we failed to receive regulatory approval for our COVID-19 Vaccine using bulk antigen produced at BMC on or before December 31, 2024.
The emergence and transmissibility of variants of the SARS-CoV-2 virus, and the demand for bivalent vaccines, may affect market acceptance or sales of our COVID-19 Vaccine, and our strategy to develop new versions of our COVID-19 Vaccine to protect against certain variants may not be successful.
The emergence and transmissibility of variants of the SARS-CoV-2 virus may affect market acceptance or sales of our COVID-19 Vaccine, and our strategy to develop new versions of our COVID-19 Vaccine to protect against certain variants may not be successful.
Such a PREP Act declaration is 35 Table of Contents separate from other declarations such as a PHE or EUA declaration and, among other things, defines the scope and duration of the PREP Act immunities.
Such a PREP Act declaration is separate from other declarations such as a PHE or EUA declaration and, among other things, defines the scope and duration of the PREP Act immunities.
FDA regulatory review process. We may not receive any extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request.
We may not receive any extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request.
If SLS or PCI is unable to provide sufficient co-formulation, fill, and finish services to us, fails to meet regulatory requirements, or otherwise defaults on its obligations to us, we may not be able to obtain alternative co-formulation, fill, and finish services from other providers on acceptable terms in a timely manner or at all, which could prevent or delay delivery of customer orders, or otherwise negatively affect our business.
If SII is unable to provide sufficient co-formulation, filling, and finishing services to us, fails to meet regulatory requirements, or otherwise defaults on its obligations to us, we may not be able to obtain alternative co-formulation, filling, and finishing services from other providers on acceptable terms in a timely manner or at all, which could prevent or delay delivery of customer orders, or otherwise negatively affect our business.
Moreover, we rely and intend to rely on third parties, including clinical research organizations, contract manufacturing organizations and other important vendors and consultants. Global economic conditions may result in a disruption or delay in the performance of our third-party contractors and suppliers.
Moreover, we rely and intend to rely on third parties, including clinical research organizations, contract manufacturing organizations and other important vendors and consultants. Global economic conditions may result in a 28 Table o f Contents disruption or delay in the performance of our third-party contractors and suppliers.
Risks Related to Our Industry and Competition Many of our competitors have significantly greater resources and experience, which may negatively impact our commercial opportunities and those of our current and future licensees. The biotechnology and pharmaceutical industries are subject to intense competition and rapid and significant technological change.
Risks Related to Our Industry and Competition 40 Table o f Contents Many of our competitors have significantly greater resources and experience, which may negatively impact our commercial opportunities and those of our current and future licensees. The biotechnology and pharmaceutical industries are subject to intense competition and rapid and significant technological change.
Any violations of these anti-corruption or trade laws, or even allegations of such violations, can lead to an investigation and/or enforcement action, which could disrupt our operations, involve significant management distraction, and lead to significant costs and expenses, including legal fees.
Any violations of these anti-corruption or trade laws, or even allegations of such violations, can lead to an investigation and/or enforcement action, which 51 Table o f Contents could disrupt our operations, involve significant management distraction, and lead to significant costs and expenses, including legal fees.
We experienced delays in early 2023 in manufacturing our BA.5 clinical trial materials, which delayed regulatory approval from the U.S. FDA for our vaccine candidate for the fall 2023 COVID vaccine season.
We experienced delays in early 2023 in manufacturing our BA.5 clinical trial materials, which delayed regulatory approval from the U.S. FDA for our vaccine candidate for the 2023-2024 vaccination season.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed9 unchanged
Biggest changeThe Company uses NIST cybersecurity and risk management frameworks to assess its cybersecurity controls, risks, and overall program effectiveness. As part of our risk management process, the Company also engages outside providers to conduct periodic internal and external penetration testing and security assessments.
Biggest changeThe Company's information security program is developed using industry standards as a guide, including the National Institute of Standards and Technology Cybersecurity Framework. As part of our risk management process, the Company also engages outside providers to conduct periodic internal and external penetration testing and security assessments.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeThe term of the 700QO lease agreement is approximately 15 years, and we have the option to extend the Lease Agreement for two successive five-year terms. As of December 31, 2023, we also lease and own approximately 192,000 square feet of office and other space in the U.S., apart from our corporate headquarters and approximately 260,000 in various foreign locations.
Biggest changeThe term of the 700QO lease agreement is approximately 15 years, and we have the option to extend the Lease Agreement for two successive five-year terms. As of December 31, 2024, we also lease and own approximately 192,000 square feet of office and other space in the U.S., apart from our corporate headquarters and approximately 60,000 in various foreign locations.
Item 2. PROPERTIES As of December 31, 2023, we leased approximately 170,000 square feet of office space in Gaithersburg, Maryland that serves as our corporate headquarters (“700QO”), and intend to use for manufacturing and research and development.
Item 2. PROPERTIES As of December 31, 2024, we leased approximately 170,000 square feet of office space in Gaithersburg, Maryland that serves as our corporate headquarters (“700QO”), and intend to use for manufacturing and research and development.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

15 edited+11 added−29 removed12 unchanged
Biggest changeThe Kirst and Needelman Actions were filed in the Circuit Court for Montgomery County, Maryland. The Mesa and Acosta Actions were filed in the Delaware Court of Chancery (the “Delaware Court”). The derivative lawsuits name members of the Company’s board of directors and certain members of senior management as defendants. The Company is deemed a nominal defendant.
Biggest changeThe Kirst Action was filed in the Circuit Court for Montgomery County, Maryland, and shortly thereafter removed to the Maryland Court by the defendants. The Needelman Action was also filed in the Circuit Court for Montgomery County, Maryland. The Mesa and Acosta Actions were filed in the Delaware Court of Chancery (the “Delaware Court”).
On January 23, 2023, defendants filed a motion to stay the Kirst action. On February 22, 2023, the parties in the Kirst Action filed, for the Court’s approval, a stipulation staying the Kirst Action pending the resolution of defendants’ motion to dismiss in the Second Consolidated Derivative Action.
On January 23, 2023, defendants filed a motion to stay the Kirst action. On February 22, 2023, the parties in the Kirst Action filed for the Court’s approval of a stipulation staying the Kirst Action pending the resolution of defendants’ motion to dismiss in the Second Consolidated Derivative Action.
On October 6, 2023, the Board of Directors of the Company formed a Special Litigation Committee (“SLC”) with full and exclusive power and authority of the Board to, among other things, investigate, review, and analyze the 65 Table of Contents facts and circumstances surrounding the claims asserted in the pending derivative actions, including the claims that remain following the court’s order on the motion to dismiss in the Second Consolidated Derivative Action.
On October 6, 2023, the Board of Directors of the Company formed a Special Litigation Committee (“SLC”) with full and exclusive power and authority of the Board to, among other things, investigate, review, and analyze the facts and circumstances surrounding the claims asserted in the pending derivative actions, including the claims that remain following the court’s order on the motion to dismiss in the Second Consolidated Derivative Action.
Item 3. LEGAL PROCEEDINGS On November 12, 2021, Sothinathan Sinnathurai filed a purported securities class action in the U.S. District Court for the District of Maryland (the “Maryland Court”) against the Company and certain members of senior management, captioned 64 Table of Contents Sothinathan Sinnathurai v. Novavax, Inc., et al., No. 8:21-cv-02910-TDC (the “Sinnathurai Action”).
Item 3. LEGAL PROCEEDINGS Stockholder Litigation 64 Table o f Contents On November 12, 2021, Sothinathan Sinnathurai filed a purported securities class action in the U.S. District Court for the District of Maryland (the “Maryland Court”) against the Company and certain members of senior management, captioned Sothinathan Sinnathurai v. Novavax, Inc., et al., No. 8:21-cv-02910-TDC (the “Sinnathurai Action”).
On December 14, 2023, the parties filed a stipulation (i) extending the plaintiffs’ deadline to file a consolidated complaint until January 29, 2024, and (ii) otherwise staying all other proceedings in the case (including the defendants’ deadline to respond to the consolidated complaint) until February 12, 2024.
On December 14, 2023, the parties filed a stipulation (i) extending the plaintiffs’ deadline to file a consolidated complaint until January 29, 2024, and (ii) otherwise staying all other proceedings in the case (including the defendants’ deadline to respond to the consolidated complaint) until February 12, 2024. On May 3, 2024, the plaintiffs filed a consolidated complaint.
On August 31, 2023, the plaintiff filed a motion to lift the stay. On October 6, 2023, the Company filed an opposition to plaintiff’s motion to lift the stay. Plaintiff filed his reply on October 17, 2023.
On October 6, 2023, the Company filed an opposition to plaintiff’s motion to lift the stay. Plaintiff filed his reply on October 17, 2023.
Plaintiffs seek declaratory and injunctive relief, as well as an award of monetary damages and attorneys’ fees. On February 7, 2022, the Maryland Court entered an order consolidating the Meyer and Yung Actions (the “First Consolidated Derivative Action”). The plaintiffs in the First Consolidated Derivative Action filed their consolidated derivative complaint on April 25, 2022.
On February 7, 2022, the Maryland Court entered an order consolidating the Meyer and Yung Actions (the “First Consolidated Derivative Action”). The plaintiffs in the First Consolidated Derivative Action filed their consolidated derivative complaint on April 25, 2022.
The court also scheduled a settlement hearing to consider final approval of the settlement for May 23, 2024. After the Sinnathurai Action was filed, eight derivative lawsuits were filed: (i) Robert E. Meyer v. Stanley C. Erck, et al., No. 8:21-cv-02996-TDC (the “Meyer Action”), (ii) Shui Shing Yung v. Stanley C.
The parties ultimately negotiated a settlement, which the Maryland Court approved on May 23, 2024. The Maryland Court closed the Sinnathurai Action on May 24, 2024. After the Sinnathurai Action was filed, eight derivative lawsuits were filed: (i) Robert E. Meyer v. Stanley C. Erck, et al., No. 8:21-cv-02996-TDC (the “Meyer Action”), (ii) Shui Shing Yung v. Stanley C.
Although the outcomes of these legal proceedings are inherently difficult to predict, management does not expect the resolution of these legal proceedings to have a material adverse effect on our financial position, results of operations, or cash flows.
Although the outcomes of these other legal proceedings are inherently difficult to predict, we do not expect the resolution of these other legal proceedings to have a material adverse effect on our financial position, results of operations, or cash flows. 66 Table o f Contents PART II Item 4. MINE SAFETY DISCLOSURES Not applicable.
On November 7, 2023, the court entered an order granting the parties’ request to stay the Second Consolidated Derivative Action for up to six months from the date of entry of the order. This includes staying the deadline for the individual defendants to respond to the consolidated amended complaint.
On November 7, 2023, the court entered an order granting the parties’ request to stay the Second Consolidated Derivative Action for up to six months from the date of entry of the order, and, on April 15, 2024, the court entered a further order extending the stay until June 6, 2024.
The plaintiffs assert derivative claims arising out of substantially the same alleged facts and circumstances as the Sinnathurai Action. Collectively, the derivative complaints assert claims for breach of fiduciary duty, insider selling, unjust enrichment, violation of federal securities law, abuse of control, waste, and mismanagement.
Collectively, the derivative complaints assert claims for breach of fiduciary duty, insider selling, unjust enrichment, violation of federal securities law, abuse of control, waste, and mismanagement. Plaintiffs seek declaratory and injunctive relief, as well as an award of monetary damages and attorneys’ fees.
Defendants filed their reply brief in further support of their motion to dismiss on May 11, 2023. On August 21, 2023, the court entered an order granting in part and denying in part the motion to dismiss; the court allowed claims for alleged insider selling under Brophy v. Cities Service Co., et al., 70 A.2d 5 (Del.
Defendants filed their reply brief in further support of their motion to dismiss on May 11, 2023. On August 21, 2023, the court entered an order granting in part and denying in part the motion to dismiss. On September 5, 2023, the Company filed an Answer to the consolidated amended complaint.
Ch. 1949) and unjust enrichment claims to proceed, but dismissed the remaining claims in the second consolidated amended complaint. On September 5, 2023, the Company filed an Answer to the consolidated amended complaint. On September 6, 2023, the court entered an order granting the individual defendants an extension of time to file their answer until November 6, 2023.
On September 6, 2023, the court entered an order granting the individual defendants an extension of time to file their answer until November 6, 2023.
On January 18, 2023, defendants filed a motion to stay the Mesa Action pending a final judgment in the Second Consolidated Derivative Action. The plaintiff filed his opposition on February 8, 2023. Defendants filed their reply on February 22, 2023. On February 28, 2023, the court granted the defendants’ motion to stay.
On February 28, 2023, the court granted the defendants’ motion and stayed the Mesa Action pending the entry of a final, non-appealable judgment in the Second Consolidated Derivative Action. On August 31, 2023, the Mesa plaintiffs filed a motion to lift the stay in the Mesa Action.
The parties continue to discuss next steps in the litigation following the Maryland Court’s ruling on the motion to dismiss the Second Consolidated Derivative Action. The court entered that order on July 17, 2023. On November 30, 2023, the court entered an order consolidating the Kirst and Needelman Actions.
On November 30, 2023, the court entered an order consolidating the Kirst and Needelman Actions.
Removed
On January 26, 2022, the Maryland Court entered an order designating David Truong, Nuggehalli Balmukund Nandkumar, and Jeffrey Gabbert as co-lead plaintiffs in the Sinnathurai Action.
Added
The derivative lawsuits name members of the Company’s board of directors and certain members of senior management as defendants. The Company is deemed a nominal defendant. The plaintiffs assert derivative claims arising out of substantially the same alleged facts and circumstances as the Sinnathurai Action.
Removed
The co-lead plaintiffs filed a consolidated amended complaint on March 11, 2022, alleging that the defendants made certain purportedly false and misleading statements concerning the Company’s ability to manufacture prototype vaccine on a commercial scale and to secure the prototype vaccine’s regulatory approval.
Added
On June 7, 2024, the court entered another order extending the stay until August 5, 2024. On August 19, 2024, the court entered another order extending the stay until November 4, 2024, to allow the SLC and the parties to continue then-ongoing mediation efforts.
Removed
The amended complaint defines the purported class as those stockholders who purchased the Company’s securities between February 24, 2021 and October 19, 2021. On April 25, 2022, the defendants filed a motion to dismiss the consolidated amended complaint. On December 12, 2022, the Maryland Court issued a ruling granting in part and denying in part defendants’ motion to dismiss.
Added
On November 1, 2024, the parties notified the court that a settlement in principle had been reached and requested the stay to be extended until the definitive settlement agreement was filed.
Removed
The Maryland Court dismissed all claims against two individual defendants and claims based on certain public statements challenged in the consolidated amended complaint. The Maryland Court denied the motion to dismiss as to the remaining claims and defendants, and directed the Company and other remaining defendants to answer within fourteen days.
Added
On November 22, 2024, the SLC filed its Unopposed Motion for Preliminary Approval of Derivative Settlement, Approval of Form and Manner of Notice, and Setting Hearing Date on Final Approval of Settlement and supporting documents.
Removed
On December 27, 2022, the Company filed its answer and affirmative defenses. On March 16, 2023, the plaintiffs filed a motion for class certification and to appoint class representatives and counsel.
Added
Under the terms of the proposed settlement, individual defendants Erck and Herrmann agreed to pay or cause their insurers to pay $6.8 million to Novavax in exchange for a release of claims. In addition, Novavax and its Board of Directors agreed to adopt and implement certain governance provisions identified in the settlement stipulation.
Removed
Due to the Maryland Court’s ruling on the dismissal motion, the motion sought to certify a class of stockholders who purchased the Company’s securities between May 11, 2021, and October 19, 2021. The Company filed its opposition to the plaintiffs’ motion on September 22, 2023.
Added
On December 12, 2024, the court entered an order granting preliminary approval of the derivative settlement and setting a date for a hearing on the final approval of the settlement. The hearing for final consideration of the proposed settlement is presently scheduled to be held on March 7, 2025, at 9:30 a.m.
Removed
On December 4, 2023, the parties agreed to a binding settlement in principle (the “Proposed Settlement”) to fully resolve the surviving claims in the Sinnathurai Action.
Added
EST at the United States District Court for the District of Maryland, Southern Division, 650 Cherrywood Lane, Greenbelt, MD 20770. A copy of the settlement agreement, together with the Notice, can be found on the “Investor Hub” section of Novavax’s website. The date and time of the final fairness hearing may change.
Removed
Under the Proposed Settlement’s terms, the Company agreed to pay $47 million into a settlement fund, which will be funded by the Company’s directors and officers’ liability insurance and paid to members of a putative settlement class.
Added
Any updates to the date or time of the final fairness hearing can also be found on the “Investor Hub” section of Novavax’s website or on the Maryland Court’s website. 65 Table o f Contents The contents of Novavax’s website are not incorporated by reference into this Annual Report on Form 10-K and you should not consider information provided on Novavax’s website to be part of this Annual Report on Form 10-K.
Removed
On January 12, 2024, after the parties negotiated and executed a written agreement governing the Proposed Settlement, plaintiffs filed an unopposed motion for the Proposed Settlement’s preliminary approval. On January 23, 2024, the Maryland Court granted the motion for preliminary approval and, as requested by the parties, preliminarily certified, for the purposes of settlement only, the settlement class.
Added
On January 9, 2023, following the ruling on the motion to dismiss the Sinnathurai Action, the Delaware Court entered an order granting the Mesa Action parties’ request to set a briefing schedule in connection with a motion to stay by defendants.
Removed
The stipulation entered by the court instructs the parties to discuss whether the stay should be further extended in light of the then-current status of the SLC’s investigation.
Added
On May 14, 2024, the parties filed a stipulation staying the action until June 6, 2024. On July 12, 2024, the court entered an order staying the action until August 5, 2024. On September 24, 2024, the court entered another order staying the action until November 4, 2024.
Removed
On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA based on Gavi’s failure to procure the purchase of 350 million doses of prototype vaccine from the Company as required by the Gavi APA. As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses.
Added
On November 4, 2024, the parties filed a stipulation requesting a status conference with the court and further requesting that the action remain stayed until such status conference takes place. To date, the court has not scheduled a status conference. We are also involved in various other legal proceedings arising in the normal course of business.
Removed
On December 2, 2022, Gavi issued a written notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the Gavi APA.
Removed
Gavi also contended that, based on its purported termination of the Gavi APA, it was entitled to a refund of the Advance Payment Amount less any amounts that have been credited against the purchase price for binding orders placed by a buyer participating in the COVAX Facility.
Removed
Since December 31, 2022, the remaining Gavi Advance Payment Amount, which is $696.4 million as of December 31, 2023, pending resolution of the dispute with Gavi related to a return of the remaining Advance Payment Amount, has been classified within Other current liabilities in the Company’s consolidated balance sheet.
Removed
On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above. The Company filed its Answer and Counterclaims on March 2, 2023. On April 5, 2023, Gavi filed its Reply to the Company’s Counterclaims.
Removed
On February 16, 2024, the Company and Gavi entered into a Termination and Settlement Agreement (the “Settlement Agreement”) terminating the Gavi APA, which related to the supply of the Company’s vaccine against SARS-COV-2 for the prevention of COVID-19, 66 Table of Contents settling the arbitration proceedings initiated by Gavi against the Company relating to the APA and releasing both parties of all claims arising from, under or otherwise in connection with the APA.
Removed
Pursuant to the Settlement Agreement, the Company is responsible for payment to Gavi of (i) an initial settlement payment of $75 million, which the Company paid on February 20, 2024, and (ii) deferred payments, in equal annual amounts of $80 million payable each calendar year through a deferred payment term ending December 31, 2028.
Removed
The deferred payments are due in variable quarterly installments beginning in the first quarter of 2024 and total $400 million during the deferred payment term.
Removed
Such deferred payments may be reduced through Gavi’s use of an annual vaccine credit equivalent to the unpaid balance of such deferred payments each year, which may be applied to qualifying sales of any of the Company’s vaccines funded by Gavi for supply to certain low-income and lower-middle income countries.
Removed
The Company has the right to price the vaccines offered to such low-income and lower-middle income countries in its discretion, and, when utilized by Gavi, the Company will credit the actual price per vaccine paid against the applicable credit.
Removed
The Company intends to price vaccines offered via the tender process, consistent with its shared goal with Gavi to provide equitable access to those countries. On February 22, 2024, the claims and counterclaims were dismissed with prejudice.
Removed
On September 30, 2022, the Company, FUJIFILM Diosynth Biotechnologies UK Limited (“FDBK”), FUJIFILM Diosynth Biotechnologies Texas, LLC (“FDBT”), and FUJIFILM Diosynth Biotechnologies USA, Inc.
Removed
(“FDBU” and together with FDBK and FDBT, “Fujifilm”) entered into a Confidential Settlement Agreement and Release (the “Fujifilm Settlement Agreement”) regarding amounts due to Fujifilm in connection with the termination of manufacturing activity at FDBT under the Commercial Supply Agreement (the “CSA”) dated August 20, 2021 and Master Services Agreement dated June 30, 2020 and associated statements of work (the “MSA”) by and between the Company and Fujifilm.
Removed
The MSA and CSA established the general terms and conditions applicable to Fujifilm’s manufacturing and supply activities related to the Company’s prototype vaccine under the associated statements of work. Pursuant to the Fujifilm Settlement Agreement, the Company agreed to pay up to $185.0 million (the “Settlement Payment”) to Fujifilm in connection with cancellation of manufacturing activity at FDBT.
Removed
Under the Fujifilm Settlement Agreement, the final two quarterly installments due to Fujifilm were subject to Fujifilm’s obligation to use commercially reasonable efforts to mitigate losses associated with the vacant manufacturing capacity caused by the termination of manufacturing activities at FDBT under the CSA.
Removed
Any replacement revenue achieved by Fujifilm’s mitigation efforts between July 1, 2023 and December 31, 2023 would offset the final two settlement payments owed by the Company.
Removed
On October 2, 2023, the Company sent a notice of breach under the Fujifilm Settlement Agreement to Fujifilm setting forth the Company’s position that Fujifilm had not used commercially reasonable efforts to mitigate losses.
Removed
The Company withheld two installments of $34.3 million due to Fujifilm on September 30, 2023 and December 31, 2023, pending resolution of the issues identified in the notice of breach. On October 30, 2023, FDBT filed a demand for arbitration with Judicial Arbitration and Mediation Services (“JAMS”) seeking payment of the third quarter installment of the Settlement Payment.
Removed
An arbitration hearing has been scheduled for May 2024. The Company is also involved in various legal proceedings arising in the normal course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed3 unchanged
Biggest changeFiscal year ending December 31. 68 Table of Contents Value of $100 invested on December 31, 2018 in stock or index, including reinvestment of dividends, for fiscal years ended: December 31, 2018 2019 2020 2021 2022 2023 Novavax, Inc. $ 100 $ 10.82 $ 303.02 $ 388.78 $ 27.93 $ 13.04 NASDAQ Composite $ 100 $ 136.69 $ 198.10 $ 242.03 $ 163.28 $ 236.17 Russell 2000 Growth Biotechnology $ 100 $ 145.95 $ 226.85 $ 157.88 $ 115.02 $ 131.97 This graph is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Biggest changeValue of $100 invested on December 31, 2019 in stock or index, including reinvestment of dividends, for fiscal years ended: December 31, 2019 2020 2021 2022 2023 2024 Novavax, Inc. $ 100.00 $ 2,801.76 $ 3,594.72 $ 258.29 $ 120.60 $ 202.01 NASDAQ Composite $ 100.00 $ 143.64 $ 174.36 $ 116.65 $ 167.30 $ 215.22 Russell 2000 Growth Biotechnology $ 100.00 $ 155.43 $ 108.17 $ 78.81 $ 92.76 $ 94.07 This graph is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the Nasdaq Global Select Market under the symbol “NVAX.” Our common stock was held by approximately 177 stockholders of record as of February 23, 2024, one of which is Cede & Co., a nominee for Depository Trust Company (“DTC”).
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the Nasdaq Global Select Market under the symbol “NVAX.” Our common stock was held by approximately 164 stockholders of record as of February 18, 2025, one of which is Cede & Co., a nominee for Depository Trust Company (“DTC”).
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2018 to December 31, 2023.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2019 to December 31, 2024.
COMPARISON OF 5 YEAR CUMULATIVE RETURN* Among Novavax Inc., the NASDAQ Composite index, and the Russell 2000 Growth Biotechnology Index *$100 invested on 12/31/18 in stock or index, including reinvestment of dividends.
COMPARISON OF 5 YEAR CUMULATIVE RETURN* Among Novavax Inc., the NASDAQ Composite index, and the Russell 2000 Growth Biotechnology Index 67 Table o f Contents *$100 invested on 12/31/19 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

79 edited+91 added−84 removed36 unchanged
Biggest changeSuch forward-looking statements include, without limitation, statements about our capabilities, goals, expectations regarding future revenue and expense levels, and capital raising activities; our operating plans and prospects, including our ability to continue as a going concern through one year from the date of Novavax’ audited financial statements for the year ended December 31, 2023; our global restructuring and cost reduction plan (“Restructuring Plan”), which includes a more focused investment in our COVID-19 commercial program (which currently includes Nuvaxovid™ prototype COVID-19 vaccine ("NVX-CoV2373” or “prototype vaccine”) and Nuvaxovid™ updated COVID-19 vaccine (“NVX-CoV2601” or “updated vaccine”) collectively referred to as our (“COVID-19 Vaccine”)), potential market sizes and demand for our product candidates; the efficacy, safety, and intended utilization of our product candidates; the development of our clinical-stage product candidates and our recombinant vaccine and adjuvant technologies; the development of our preclinical product candidates; our expectations related to enrollment in our clinical trials; the conduct, timing, and potential results from clinical trials and other preclinical studies; plans for and potential timing of regulatory filings; our expectation of manufacturing capacity, timing, production, distribution, and delivery for our COVID-19 Vaccine by us and our partners; our estimate of the number of individuals who may potentially be reached by our COVID-19 Vaccine; our expectations with respect to the anticipated ongoing development and commercialization or licensure of the COVID-19 Vaccine, ongoing development of COVID-19 variant strain-containing monovalent or bivalent formulation, efforts to expand our COVID-19 Vaccine label worldwide as a booster, and to various age groups and geographic locations; the expected timing, content, and outcomes of regulatory actions; funding from the U.S. government partnership formerly known as Operation Warp Speed under the USG Agreement, the U.S.
Biggest changeSuch forward-looking statements include, without limitation, statements about our capabilities, goals, expectations regarding future revenue and expense levels, and capital raising activities; our corporate growth strategy and key value drivers; our technology platform; our COVID-19 program (which currently includes our Nuvaxovid™ prototype COVID-19 vaccine ("NVX-CoV2373” or “prototype COVID-19 vaccine”), our Nuvaxovid™ COVID-19 vaccine for the 2023-2024 vaccination season (“XBB COVID-19 Vaccine”) and our Nuvaxovid™ updated COVID-19 vaccine for the 2024-2025 vaccination season (“NVX-CoV2705” or “updated COVID-19 vaccine”) collectively referred to as our (“COVID-19 Vaccine”)); our operating plans and prospects, including our ability to continue as a going concern through one year from the date of Novavax’ audited financial statements for the year ended December 31, 2024; our global restructuring and cost reduction plan (“Restructuring Plan”), which includes a more focused investment in our COVID-19 vaccine; our cash flow forecast and project revenue, including potential royalties and milestones pursuant to our collaboration and license agreement (the “Sanofi CLA”) with Sanofi Pasteur Inc.
Additional information concerning factors that could cause actual results to differ materially from those in our forward-looking statements is described under Part I, Item 1A, “Risk Factors” of this Annual Report on Form 10-K. For our discussion of the year ended December 31, 2022, compared to the year ended December 31, 2021, please read Item 7.
Additional information concerning factors that could cause actual results to differ materially from those in our forward-looking statements is described under Part I, Item 1A, “Risk Factors” of this Annual Report on Form 10-K. For our discussion of the year ended December 31, 2023, compared to the year ended December 31, 2022, please read Item 7.
We recognize revenue from product sales related to these APA’s based on the transaction price per dose calculated in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, at the point in time when control of the product transfers to the customer and customer acceptance has occurred, unless such acceptance provisions are deemed perfunctory.
We recognize revenue from product sales related to these APA’s based on the transaction price per dose calculated in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), at the point in time when control of the product transfers to the customer and customer acceptance has occurred, unless such acceptance provisions are deemed perfunctory.
This estimation process includes a review of: • expenses incurred under agreements with contract research organizations (“CROs”) that conduct our clinical trials and third party consultants; and • the cost of developing and manufacturing vaccine components under third-party CMOs and contract development and manufacturing organizations (“CDMOs”) agreements, including expenses incurred for the procurement of raw materials, laboratory supplies and equipment.
This estimation process includes a review of: • expenses incurred under agreements with contract research organizations (“CROs”) that conduct our clinical trials and third party consultants; and • the cost of developing and manufacturing vaccine components under third-party contract manufacturing organizations (“CMOs”) and contract development and manufacturing organizations (“CDMOs”) agreements, including expenses incurred for the procurement of raw materials, laboratory supplies and equipment.
Pursuant to the Gavi Settlement Agreement, we are responsible for payment to Gavi of (i) an initial settlement payment of $75 million, which we paid on February 20, 2024, and (ii) deferred payments, in equal annual amounts of $80 million payable each calendar year through a deferred payment term ending December 31, 2028.
Pursuant to the Gavi Settlement Agreement, we are responsible for payment to Gavi of (i) an initial settlement payment of $75 million, which we paid in February 2024, and (ii) deferred payments, in equal annual amounts of $80 million payable each calendar year through a deferred payment term ending December 31, 2028.
The supply agreements typically contain terms that include upfront payments intended to assist us in funding investments related to building out and operating our manufacturing and distribution network, among other expenses, in support of our global supply commitment, and are applied to billings upon delivery of COVID-19 Vaccine.
The APAs typically contain terms that include upfront payments intended to assist us in funding investments related to building out and operating our manufacturing and distribution network, among other expenses, in support of our global supply commitment, and are applied to billings upon delivery of COVID-19 Vaccine.
Results of Operations for Fiscal Years 2023 and 2022 The following is a discussion of our historical consolidated financial condition and results of operations, and should be read in conjunction with the consolidated financial statements and notes thereto set forth in this Annual Report on Form 10-K.
Results of Operations for Fiscal Years 2024 and 2023 The following is a discussion of our historical consolidated financial condition and results of operations, and should be read in conjunction with the consolidated financial statements and notes thereto set forth in this Annual Report on Form 10-K.
We have the right to price the vaccines offered to such low-income and lower-middle income countries at our discretion, and, when utilized by Gavi, we will credit the actual price per vaccine paid against the applicable credit.
We have the right to price the vaccines offered to such low-income and lower-middle income countries in our discretion, and, when utilized by Gavi, we will credit the actual price per vaccine paid against the applicable credit.
Our assumptions about expected future demand are inherently uncertain and if we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of inventory write down that we report in a particular period. We began to capitalize inventory in 2022.
Our assumptions about expected future demand are inherently uncertain and if we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of inventory write down that we report in a particular period.
Management's Discussion and Analysis of Financial Condition and Results of Operations located in Annual Report on Form 10-K for the year ended December 31, 2022.
Management's Discussion and Analysis of Financial Condition and Results of Operations located in Annual Report on Form 10-K for the year ended December 31, 2023.
The deferred payments are due in variable quarterly installments beginning in the first quarter of 2024 and total $400 million during the deferred payment term.
The deferred payments are due in variable quarterly installments beginning in the second quarter of 2024 and total $400 million during the deferred payment term.
Specifically, if an APA includes a provision whereby the customer may request a discount, return, or refund, or includes a term that may have the effect of decreasing the price per dose of previously delivered shipments, revenue is constrained based on an estimate of the impact of the transaction price until it is probable that a significant reversal in revenue recognized will not occur.
Specifically, if an APA includes a provision whereby the customer may request a discount, return, or refund, or includes a term that may have the effect of decreasing the price per 72 Table o f Contents dose of previously delivered shipments, revenue is constrained based on an estimate of the impact of the transaction price until it is probable that a significant reversal in revenue recognized will not occur.
If we are unable to obtain additional capital, we will assess our capital resources and may be required to delay, reduce the scope of, or eliminate some or all of our operations, or further downsize our organization, any of which may have a material adverse effect on our business, financial condition, results of operations, and ability to operate as a going concern.
If we are unable to obtain additional capital, we will assess our capital resources and may be required to delay, reduce the scope of, or eliminate some or all of our operations, or further downsize our organization, any of which may have a material adverse effect on our business, financial condition, results of operations.
These estimates, particularly estimates relating to accounting for product sales revenue, pre-launch inventory, inventory realizability, and research and development expenses have a material impact on our consolidated financial statements and are discussed in detail throughout our analysis of the results of operations discussed below.
These estimates, particularly estimates relating to accounting for product sales revenue, licensing and transition services revenue, inventory realizability, and research and development expenses have a material impact on our consolidated financial statements and are discussed in detail throughout our analysis of the results of operations discussed below.
The estimation process requires us to make significant judgments and estimates in determining the services incurred as of the balance sheet date, which may result in either a prepaid or an accrual balance. As actual costs become known, we adjust our estimates.
The estimation process requires us to make 74 Table o f Contents significant judgments and estimates in determining the services incurred as of the balance sheet date, which may result in either a prepaid or an accrual balance. As actual costs become known, we adjust our estimates.
Liquidity Matters and Capital Resources Our future capital requirements depend on numerous factors including, but not limited to, revenue from our product sales and royalties under licensing arrangements with our strategic partners; repayments under our grant agreements; our projected activities related to the development and commercial support of our COVID-19 Vaccine and our CIC vaccine candidate, including significant commitments under various CRO, CMO, and CDMO agreements; the progress of preclinical studies and clinical trials; the time and costs involved in obtaining regulatory approvals; the costs of filing, prosecuting, defending, and enforcing patent claims and other intellectual property rights; and other manufacturing, sales, and distribution costs.
Liquidity Matters and Capital Resources Our future capital requirements depend on numerous factors including, but not limited to, revenue from our product sales, milestone payments, royalties and reimbursements under licensing arrangements with our strategic partners; our projected activities related to the development and commercial support of our COVID-19 Vaccine and our CIC and stand-alone influenza vaccine candidates, including significant commitments under various CRO, CMO, and CDMO agreements; the progress of preclinical studies and clinical trials; the time and costs involved in obtaining regulatory approvals; the costs of filing, prosecuting, defending, and enforcing patent claims and other intellectual property rights; and other manufacturing, sales, and distribution costs.
The timing to fulfill performance obligations related to supply agreements will depend on timing of product manufacturing, receipt of marketing authorizations for additional indications, delivery of doses based on customer demand, and the ability of the customer to request variant vaccine in place of the prototype vaccine under certain of our APAs.
The timing to fulfill performance obligations related to APAs will depend on timing of product manufacturing, receipt of marketing authorizations for additional indications, delivery of doses based on customer demand, and the ability of the customer to request variant vaccine under certain of our APAs.
We began to capitalize inventory in 2022. Inventory Realizability We periodically analyze our inventories for excess amounts or obsolescence and write down obsolete or otherwise unmarketable inventory to its estimated net realizable value.
Inventory Realizability We periodically analyze our inventories for excess amounts or obsolescence and write down obsolete or otherwise unmarketable inventory to its estimated net realizable value.
In addition, we and Gavi entered into a security agreement pursuant to which we granted Gavi a security interest in accounts receivable from SIIPL under the SIIPL R21 Agreement (see Note 4 to our consolidated financial statements for more details on SIIPL R21 Agreement), which will continue for the deferred payment term of the Gavi Settlement Agreement.
In addition, we and Gavi entered into a security agreement pursuant to which we granted Gavi a security interest in accounts receivable from SII under the SII R21 Agreement (see Note 3 to our accompanying consolidated financial statements), which will continue for the deferred payment term of the Gavi Settlement Agreement.
Income Tax Expense: During the years ended December 31, 2023 and 2022, we recognized $2.0 million and $4.3 million of income tax expense, respectively, related to federal, state, and foreign income taxes.
Income Tax Expense: During the years ended December 31, 2024 and 2023, we recognized $10.9 million and $2.0 million of income tax expense, respectively, related to federal, state, and foreign income taxes.
Our prepaid and accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from CROs, CMOs, CDMOs, and third-party service providers. Due to the nature of the estimation process, there may be a difference between estimated costs and actual costs incurred.
Our prepaid and accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from CROs, CMOs, CDMOs, and third-party service providers. Due to the nature of the estimation process, there may be a difference between estimated costs and actual costs incurred. Historically, we have not experienced any material differences in prior periods.
Failure to timely meet regulatory milestones, or achieve product volume or delivery timing obligations under our APAs may require us to refund portions of upfront or other payments or result in reduced future payments, which could adversely impact our ability to realize revenue from our unsatisfied performance obligations.
Failure to timely meet regulatory milestones, obtain timely supportive recommendations from governmental advisory committees, or achieve product volume or delivery timing obligations under our APAs may require us to refund portions of upfront or other payments or result in reduced future payments, which could adversely impact our ability to realize revenue from our unsatisfied performance obligations or result in the reversal of previously recognized revenue.
As of December 31, 2023, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties under the licensing agreements, was approximately $2 billion, of which $863.5 million is included in Deferred revenue on our 78 Table of Contents consolidated balance sheet.
As of December 31, 2024, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties under the licensing agreements, was approximately $1.3 billion, of which $1.1 billion is included in Deferred revenue on our consolidated balance sheet.
We estimate chargebacks, discounts, and fees we will owe and deduct these amounts from gross product sales at the time the revenue is recognized based on the contractual terms and our expectations regarding future customer behaviors. • Product returns: We offer U.S. customers the right to return COVID-19 Vaccine.
We estimate chargebacks, discounts, and fees we will owe and deduct these amounts from gross product sales at the time the revenue is recognized based on the contractual terms and our expectations regarding future customer behaviors. • Product returns: We offer wholesale distributors and indirect customers the right to return expired doses.
Generally, forward-looking statements can be identified through the use of words or phrases such as “believe,” “may,” “could,” “will,” “would,” “possible,” “can,” “estimate,” “continue,” “ongoing,” “consider,” “anticipate,” “intend,” “seek,” “plan,” “project,” “expect,” “should,” “would,” “aim,” or “assume,” the negative of these terms, or other comparable terminology, although not all forward-looking statements contain these words.
Generally, forward-looking statements can be identified through the use of words or phrases such as “believe,” “may,” “could,” “will,” “would,” “possible,” “can,” “estimate,” “continue,” “ongoing,” “consider,” “anticipate,” “intend,” “seek,” “plan,” “project,” “expect,” “should,” “would,” “aim,” or “assume,” the negative of these terms, or other comparable terminology, although not all forward-looking statements contain these words. 68 Table o f Contents Forward-looking statements are neither historical facts nor assurances of future performance.
As of December 31, 2023, $82.5 million related to product returns and $20.6 million related to wholesale distributor fees, discounts, 73 Table of Contents and chargebacks were included in Other current liabilities and $2.6 million was included in Accounts receivable on our consolidated balance sheet.
As of December 31, 2023, $82.5 million related to product returns and $20.6 million related to wholesale distributor fees, discounts, and chargebacks were included in Accrued expenses and $2.6 million was included in and reduced Accounts receivable on our consolidated balance sheet.
As of December 31, 2023, the remaining balance available under the August 2023 Sales Agreement was approximately $242 million. During the year ended December 31, 2022, we sold 2.2 million shares of our common stock resulting in net proceeds of approximately $179 million , under our June 2021 Sales Agreement.
During the year ended December 31, 2024, we sold 12.2 million shares of our common stock under our August 2023 Sales Agreement, resulting in net proceeds of approximately $188 million. As of December 31, 2024, the remaining balance available under the August 2023 Sales Agreement was approximately $51 million.
The Canadian government may terminate the Canada APA, as amended, if we fail to receive regulatory approval for our COVID-19 Vaccine using bulk antigen produced at BMC on or before December 31, 2024.
The Canadian government may terminate the Canada APA, as amended, as we failed to receive regulatory approval for our COVID-19 Vaccine using bulk antigen produced at Biologics Manufacturing Centre Inc. (“BMC”) on or before December 31, 2024.
In August 2023, pursuant to the Securities Subscription Agreement with SK, we agreed to sell and issue to SK 6.5 million shares of our common stock at a price of $13.00 per share (the “Shares”) in a Private Placement for aggregate gross proceeds to us of approximately $84.5 million.
("SK"), pursuant to which we agreed to sell and issue to SK, in a private placement (the "Private Placement"), 6.5 million shares of our common stock at a price of $13.00 per share (the “SK Shares”) for aggregate gross proceeds to us of approximately $84.5 million. The closing of the Private Placement occurred on August 10, 2023.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs and expectations about the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions.
Instead, they are based only on our current beliefs and expectations about the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions.
We anticipate our future operations to be funded primarily by revenue from product sales, our cash and cash equivalents, and other potential funding sources including equity financings, which may include at the market offerings under our August 2023 Sales Agreement, debt financings, collaborations, strategic alliances, asset sales, and marketing, distribution or licensing arrangements.
We anticipate our future operations to be funded primarily by milestone payments, royalties, transition services and technology transfer under the Sanofi CLA, revenue and/or royalties from product sales, our cash and cash equivalents and investments in marketable securities, and other potential funding sources including equity financings, which may include at the market offerings, debt financings, collaborations, strategic alliances, asset sales, and marketing, distribution or licensing arrangements.
Immediately upon authorization, our updated vaccine has also been included in the recommendations issued by the CDC in September 2023. Doses became available within the U.S. at many major pharmacy retailers, following the Center for Biologics Evaluation and Research release of vaccine batches. We have established reserves for gross-to-net deductions for amounts that we expect to return to our customers.
Doses became available within the U.S. at many major pharmacy retailers, following the Center for Biologics Evaluation and Research release of vaccine batches. We have established reserves for gross-to-net deductions for amounts that we expect to return to our customers.
Also in the Gavi Settlement Agreement, we grant Gavi an additional credit of up to $225 million, which may be applied against any additional qualifying sales, exceeding the $80 million deferred payment amount in any calendar year, of our vaccines in such countries during such deferred payment term.
Also, pursuant to the Gavi Settlement Agreement, we granted Gavi an additional credit of up to $225 million that may be applied against qualifying sales of any of our vaccines for supply to such low-income and lower-middle income countries that exceed the $80 million deferred payment amount in any calendar year during the deferred payment term.
The amount of such obligations is dependent on the timing of termination and the terms of the relevant agreement, and cannot be reasonably estimated. Our current obligations under non-cancelable purchase agreements are reflected on our consolidated balance sheets. In addition to the above obligations, we enter into a variety of agreements and financial commitments in the normal course of business.
Our current obligations under non-cancelable purchase agreements are reflected on our consolidated balance sheets. In addition to the above obligations, we enter into a variety of agreements and financial commitments in the normal course of business.
On February 16, 2024, we and Gavi entered into a Termination and Settlement Agreement (the “Gavi Settlement Agreement”) terminating the Gavi APA, settling the arbitration proceedings, and releasing both parties of all claims arising from, under or otherwise in connection with the Gavi APA.
As of December 31, 2023, the remaining Gavi Advance Payment Amount was $696.4 million. In February 2024, we and Gavi entered into a Termination and Settlement Agreement (the “Gavi Settlement Agreement”) terminating the Gavi APA, settling the arbitration proceedings, and releasing both parties of all claims arising from, under, or otherwise in connection with the Gavi APA.
We completed this public offering concurrent with the issuance of the 2027 Notes (see Note 10 to our consolidated financial statements). Critical Accounting Policies and Use of Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
Critical Accounting Policies and Use of Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
Ltd. and Serum Life Sciences Limited for co-formulation and filling and PCI Pharma Services for finishing our COVID-19 vaccines and the impact of any delays or disruptions in their operations on the delivery of customer orders; difficulty obtaining scarce raw materials and supplies; resource constraints, including human capital and manufacturing capacity, constraints on the ability of Novavax to pursue planned regulatory pathways, alone or with partners, in multiple jurisdictions simultaneously, leading to staggering of regulatory filings, and potential regulatory actions; challenges in implementing our global restructuring and cost reduction plan; our ability to timely deliver doses; challenges in obtaining commercial adoption and market acceptance of our updated COVID-19 vaccine or any COVID-19 variant strain-containing formulation; challenges meeting contractual requirements under agreements with multiple commercial, governmental, and other entities, including requirements to deliver doses that may require Novavax to refund portions of upfront and other payments previously received or result in reduced future payments pursuant to such agreements; challenges related to the seasonality of vaccinations against COVID-19; and other risks and uncertainties identified in Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-K, which may be detailed and modified or updated in other documents filed with the SEC from time to time, and are available at www.sec.gov and at www.novavax.com.
(“SII”) and Serum Life Sciences Limited (“SLS” and together with SII, “Serum”) for co-formulation and filling our COVID-19 vaccine and the impact of any delays or disruptions in their operations; difficulty obtaining scarce raw materials and supplies, including for our proprietary adjuvant; resource constraints, including human capital and manufacturing capacity, constraints on our ability to pursue planned regulatory pathways, alone or with partners; challenges in implementing the Restructuring Plan; our ability to timely deliver doses; challenges in obtaining commercial adoption and market acceptance of our COVID-19 vaccine, any COVID-19 variant strain-containing formulation, our CIC vaccine candidate, our stand-alone influenza vaccine candidate or our other product candidates; challenges meeting contractual requirements under agreements with multiple commercial, governmental, and other entities, including requirements to deliver doses that may require us to refund portions of upfront and other payments previously received or result in reduced future payments pursuant to such agreements; challenges related to the seasonality of vaccinations against COVID-19; challenges related to the demand for vaccinations against COVID-19 or influenza; challenges in identifying and successfully pursuing innovation expansion opportunities; our expectations as to expenses and cash needs may prove not to be correct for reasons such as changes in plans or actual events being different than our assumptions; and other risks and uncertainties identified in Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-K, which may be detailed and modified or updated in other documents filed with the SEC from time to time, and are available at www.sec.gov and at www.novavax.com.
The decrease in product sales is primarily due to a decreased quantity of dose sales of COVID-19 Vaccine during the year ended December 31, 2023 as compared to 2022. Product sales for 2023 related to revenue from commercial sales of COVID-19 Vaccine, which commenced in 2022.
The decrease in product sales is primarily due to a decreased quantity of dose sales of COVID-19 Vaccine under our APA agreements during the year ended December 31, 2024 as compared to 2023.
For an in-depth discussion of each of our significant accounting policies, including our critical accounting policies and further information regarding estimates and assumptions involved in their application, see Note 2 to the accompanying consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. 72 Table of Contents Revenue Recognition, Product Sales - Advance Purchase Agreements Product sales include sales associated with COVID-19 Vaccine supply agreements, sometimes referred to as advance purchase agreements (“APAs”), with various international governments.
For an in-depth discussion of each of our significant accounting policies, including our critical accounting policies and further information regarding estimates and assumptions involved in their application, see Note 2 to the accompanying consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
The timing and amount of any loan repayments is currently uncertain. We continue to assess our manufacturing needs and modify our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated demand for, COVID-19 Vaccine, and in doing so recognize that significant costs may be incurred.
On February 22, 2024, the claims and counterclaims were dismissed with prejudice. We continue to assess our manufacturing needs and modify our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated demand for, COVID-19 Vaccine, and in doing so recognize that significant costs may be incurred.
We recognize revenue upon title transfer (which is typically at time of delivery), provided all other revenue recognition criteria have been met. The transaction price includes estimates of variable consideration for which reserves are established that primarily result from invoice discounts for prompt payment, wholesale distributor fees, chargebacks, and product returns (collectively, “gross-to-net deductions”).
The transaction price includes estimates of variable consideration for which reserves are established that primarily result from invoice discounts for prompt payment, wholesale distributor fees, chargebacks, and product returns (collectively, “gross-to-net deductions”).
Historically, we have not experienced any material differences in prior periods. 74 Table of Contents Recent Accounting Pronouncements See “Note 2―Summary of Significant Accounting Policies” included in our Notes to Consolidated Financial Statements (under the caption “ Recent Accounting Pronouncements ”).
Recent Accounting Pronouncements See “Note 2―Summary of Significant Accounting Policies” included in our Notes to Consolidated Financial Statements (under the caption “ Recent Accounting Pronouncements ”).
In accordance with ASC Topic 205-40, Presentation of Financial Statements - Going Concern, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.
In accordance with Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements - Going Concern , we evaluated our ability to continue as a going concern within one year after the date that the accompanying consolidated financial statements are issued.
During 2023, other income, net increased primarily due to the favorable impact in 2023 as compared to 2022 of exchange rates on foreign currency denominated balances, including an intercompany loan with Novavax CZ, and an increase in investment income due to higher interest rates.
The increase in other income (expense), net is primarily due to the gain on the disposition of Novavax CZ assets, the favorable impact in 2024 as compared to 2023, of exchange rates on foreign currency denominated balances, including an intercompany loan with Novavax CZ, and additional interest income on Cash and cash equivalents and Marketable securities balances, partially offset by additional interest expense.
For the 2023-2024 vaccination season, we depend exclusively on SIIPL and SLS for co-formulation and filling (other than in Europe), and PCI Pharma Services for finishing COVID-19 Vaccine in Europe. For the 2024-2025 vaccination season, we are seeking to expand our supply chain network and introduce new single-dose vial or pre-filled syringe product presentations in certain markets.
For the 2023-2024 vaccination season, we depended exclusively on Serum for co-formulation and filling and finishing. For the 2024-2025 vaccination season, we expanded our supply chain network and introduced new single-dose vial and pre-filled syringe product presentations in certain markets.
The decrease in net loss was primarily due to the decline in cost of sales and research and development expenses associated with our COVID-19 Vaccine, partially offset by a decrease in revenue from product sales. The increase in weighted average shares outstanding for 2023 is primarily a result of sales of our common stock.
The decrease in net loss during the years ended December 31, 2024, was primarily due to a decrease in total expenses, partially offset by a decrease in total revenue. The increase in weighted average shares outstanding for 2024 is primarily a result of sales of our common stock.
The decrease was primarily due to a reduction in overall expenditures relating to development 76 Table of Contents activities on coronavirus vaccines, including our COVID-19 Vaccine and CIC, as summarized in the table below (in thousands): 2023 2022 Research and Development Expenses (in thousands): Coronavirus vaccines $ 413,448 $ 848,042 Other vaccine development programs 3,241 9,821 Total direct external research and development expense 416,689 857,863 Employee expenses 169,378 180,168 Stock-based compensation expense 41,211 66,565 Facility expenses 62,736 60,428 Other expenses 47,488 70,254 Total research and development expenses $ 737,502 $ 1,235,278 Research and development expenses for coronavirus vaccines for the year ended December 31, 2023 and 2022 decreased to $413.4 million from $848.0 million primarily as a result of a reduction in manufacturing and support costs due, in part, to a reduction in our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated demand for, COVID-19 Vaccine, including under manufacturing supply agreements with CMOs and CDMOs, and a reduction in clinical study costs and the commercialization of internal manufacturing capabilities.
The decrease was primarily due to a reduction in overall expenditures relating to development 76 Table o f Contents activities on coronavirus vaccines, including our COVID-19 Vaccine and CIC, as summarized in the table below (in thousands): 2024 2023 Research and Development Expenses (in thousands): Coronavirus vaccines $ 122,445 $ 413,448 Other vaccine development programs 4,632 3,241 Total direct external research and development expense 127,077 416,689 Employee expenses 142,860 169,378 Stock-based compensation expense 20,868 41,211 Facility expenses 52,580 62,736 Other expenses 47,784 47,488 Total research and development expenses $ 391,169 $ 737,502 Research and development expenses for coronavirus vaccines for the year ended December 31, 2024 and 2023 decreased to $122.4 million from $413.4 million primarily as a result of a reduction in coronavirus vaccines clinical and support costs.
As of December 31, 2023, gross-to-net reserve balances are $84.6 million related to product returns and $21.1 million related to wholesale distributor fees, discounts, and chargebacks, of which $103.1 million is included in Accrued expenses and $2.6 million is included in Accounts receivable on our consolidated balance sheet.
As of December 31, 2024, $77.1 million and $10.1 million related to product returns, wholesale distributor fees, discounts, and chargebacks were included in Accrued expenses and Accounts payable, respectively, and $50.6 million was included in and reduced Accounts receivable on our consolidated balance sheet.
Net Loss: 2023 2022 Change Net Loss (in thousands, except per share information): Net loss $ (545,062) $ (657,939) $ 112,877 Net loss per share, basic and diluted $ (5.41) $ (8.42) $ 3.01 Weighted average shares outstanding, basic and diluted 100,768 78,183 22,585 Net loss for 2023 was $545.1 million, or $5.41 per share, as compared to $657.9 million, or $8.42 per share, for 2022, a decrease of $112.9 million, or $3.01 per share.
Net Loss: 2024 2023 Change Net Loss (in thousands, except per share information): Net loss $ (187,499) $ (545,062) $ 357,563 Net loss per share, basic and diluted $ (1.23) $ (5.41) $ 4.18 Weighted average shares outstanding, basic and diluted 152,190 100,768 51,422 Net loss for 2024 was $187.5 million, or $1.23 per share, as compared to $545.1 million, or $5.41 per share, for 2023, a decrease of $357.6 million, or $4.18 per share.
In August 2023, we entered into a Securities Subscription Agreement (the “Subscription Agreement”) with SK, pursuant to which we agreed to sell and issue to SK, in a private placement (the “Private Placement”), 6.5 million shares of our common stock, par value $0.01 per share at a price of $13.00 per share for aggregate gross proceeds to us of approximately $84.5 million.
In May 2024, we also entered into a securities subscription agreement (the "Sanofi Subscription Agreement") with Sanofi, pursuant to which we sold and issued to Sanofi, in a private placement, 6.9 million shares of our common stock, at a price of $10.00 per share, for aggregate gross proceeds to us of $68.8 million.
See “Note 10—Long-term Debt” included in our Notes to Consolidated Financial Statements for additional information related to our convertible notes. (2) Purchase commitments primarily represent our non-cancelable fixed payment obligations under certain CMO, CDMO, and laboratory supply agreements that we are not contractually able to terminate for convenience. Certain agreements provide for termination rights subject to termination fees.
(2) Purchase commitments primarily represent our non-cancelable fixed payment obligations under certain CMO, CDMO, and laboratory supply agreements that we are not contractually able to terminate for convenience. Certain agreements provide for termination rights subject to termination fees. Under such agreements, we are contractually obligated to make payments to vendors, mainly to reimburse them for their estimated unrecoverable expenses incurred.
We plan to continue developing other vaccines and product candidates, such as our potential combination vaccines candidates, which are in various stages of development. We have entered into supply agreements, sometimes referred to as APAs, with the EC and various countries globally. We also have license agreements.
We plan to continue developing other vaccines and product candidates, such as our potential combination vaccine and stand-alone influenza vaccine candidates, which are in various stages of development.
The following table summarizes cash flows for 2023 and 2022: 2023 2022 Change Net cash (used in) provided by: Operating activities $ (713,967) $ (415,937) $ (298,030) Investing activities (58,806) (92,985) 34,179 Financing activities 4,466 324,988 (320,522) Effect on exchange rate on cash, cash equivalents, and restricted cash 3,272 4,520 (1,248) Net increase in cash, cash equivalents, and restricted cash (765,035) (179,414) (585,621) Cash, cash equivalents, and restricted cash at beginning of year 1,348,845 1,528,259 (179,414) Cash, cash equivalents, and restricted cash at end of year $ 583,810 $ 1,348,845 $ (765,035) Net cash used in operating activities was $714.0 million for 2023, as compared to cash used in operating activities of $415.9 million in 2022.
The following table summarizes cash flows for 2024 and 2023: 2024 2023 Change Net cash (used in) provided by: Operating activities $ (87,263) $ (713,967) $ 626,704 Investing activities (204,038) (58,806) (145,232) Financing activities 260,583 4,466 256,117 Effect on exchange rate on cash, cash equivalents, and restricted cash (7,800) 3,272 (11,072) Net decrease in cash, cash equivalents, and restricted cash (38,518) (765,035) 726,517 Cash, cash equivalents, and restricted cash at beginning of year 583,810 1,348,845 (765,035) Cash, cash equivalents, and restricted cash at end of year $ 545,292 $ 583,810 $ (38,518) Net cash used in operating activities was $87.3 million for 2024, as compared to cash used in operating activities of $714.0 million in 2023.
Going Concern The accompanying consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K have been prepared assuming that we will continue as a going concern within one year after the date that the financial statements are issued and contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.
The increase in cash provided by financing activities is primarily as a result of the 2023 repayment of $325.0 million of our 3.75% Convertible notes in 2023, partially offset by lower proceeds from the sale of shares under our August 2023 Sales Agreement and Sanofi Subscription Agreement, totaling $263.3 million in 2024, as compared with proceeds from the sale of shares under our June 2021 Sales Agreement and August 2023 Sales Agreement and the sale of SK Shares, totaling $360.2 million in 2023. 82 Table o f Contents Going Concern The accompanying consolidated financial statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K have been prepared assuming that we will continue as a going concern within one year after the date that the financial statements are issued and contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.
Our estimates of product returns are subject to significant uncertainty. Actual customer product returns could vary significantly from our estimates, resulting in changes to the estimates in subsequent periods.
Estimated returns for COVID-19 Vaccine are determined considering levels of inventory in the distribution channel, projected market demand, utilization data, returns claims received, and product shelf life. Our estimates of product returns are subject to significant uncertainty. Actual customer product returns could vary significantly from our estimates, resulting in changes to the estimates in subsequent periods.
The increase in cash used in operating activities is primarily due to the timing of payments to vendors and cash receipts from customers, primarily APAs. Net cash used in investing activities was $58.8 million for 2023, as compared to $93.0 million in 2022.
The decrease in cash used in operating activities is primarily due to the non-refundable upfront payment under the Sanofi CLA and an overall decrease in operating expenses period-over-period, partially offset by the timing of payments to vendors. Net cash used in investing activities was $204.0 million for 2024, as compared to $58.8 million in 2023.
The decrease in cash used in investing activities is primarily due to lower expenditures on equipment and leasehold improvements. Capital expenditures for the years ended December 31, 2023 and 2022 were $53.8 million and $89.1 million, respectively. Net cash provided by financing activities was $4.5 million for 2023, as compared to $325.0 million in 2022.
The increase in cash used in investing activities is primarily due to our investment in marketable securities, partially offset by proceeds on the disposition of Novavax CZ assets of 192.6 million and lower expenditures on equipment and leasehold improvements. Capital expenditures for the years ended December 31, 2024 and 2023 were $13.1 million and $53.8 million, respectively.
Revenue 2023 2022 Change Revenue (in thousands): Product sales $ 531,389 $ 1,554,961 $ (1,023,572) Grants 427,323 382,921 44,402 Royalties and other 24,993 43,990 (18,997) Total revenue $ 983,705 $ 1,981,872 $ (998,167) Revenue for the year ended December 31, 2023 was $983.7 million as compared to $2.0 billion for the year ended December 31, 2022, a decrease of $1.0 billion.
Revenue 2024 2023 Change Revenue (in thousands): Product sales $ 190,212 $ 531,389 $ (341,177) Licensing, royalties, and other 491,950 24,993 466,957 Grants — 427,323 (427,323) Total revenue $ 682,162 $ 983,705 $ (301,543) Revenue for the year ended December 31, 2024 was $682.2 million as compared to $983.7 million for the year ended December 31, 2023, a decrease of $301.5 million.
Such risks and uncertainties include, without limitation, our ability to successfully manufacture, distribute, or market our updated COVID-19 vaccine in a single dose vial or pre-filled syringe product presentation for the 2024-2025 vaccination season; challenges satisfying, alone or together with partners, various safety, efficacy, and product characterization 69 Table of Contents requirements, including those related to process qualification, assay validation, and stability testing, necessary to satisfy applicable regulatory authorities; challenges or delays in conducting clinical trials; challenges or delays in obtaining regulatory authorization for our product candidates, including our updated COVID-19 vaccine in time for the 2024-2025 vaccination season or for future COVID-19 variant strain changes; manufacturing, distribution or export delays or challenges; our substantial dependence on Serum Institute of India Pvt.
FDA”) for the 2024-2025 vaccination season; challenges related to our partnership with Sanofi and in pursuing additional partnership opportunities; challenges satisfying, alone or together with partners, various safety, efficacy, and product characterization requirements, including those related to process qualification, assay validation, and stability testing, necessary to satisfy applicable regulatory authorities; challenges or delays in conducting clinical trials, or studies for our product candidates; challenges or delays in obtaining regulatory authorization for our product candidates, including for future COVID-19 variant strain changes, our CIC vaccine candidate, our stand-alone influenza vaccine candidate or other product candidates, including as a result of resource constraints at regulatory authorities including the U.S.
The decrease in revenue is primarily due to a decreased quantity of dose sales of COVID-19 Vaccine. Product sales Product sales for 2023 were $531.4 million as compared to $1.6 billion for 2022, a decrease of $1.0 billion.
The decrease in revenue is due to a decrease in revenue under the USG Agreement and in the quantity of dose sales of COVID-19 Vaccine, partially offset by licensing, royalties, and other revenue from the Sanofi CLA. Product sales Product sales for 2024 were $190.2 million as compared to $531.4 million for 2023, a decrease of $341.2 million.
Expenses: 2023 2022 Change Expenses (in thousands): Cost of sales $ 343,768 $ 902,639 $ (558,871) Research and development 737,502 1,235,278 (497,776) Selling, general, and administrative 468,946 488,691 (19,745) Total expenses $ 1,550,216 $ 2,626,608 $ (1,076,392) Cost of Sales Cost of sales was $343.8 million, or 65% of product sales, for the year ended December 31, 2023, including expense of $145.9 million related to excess, obsolete, or expired inventory and losses on certain firm purchase commitments, $6.1 million ROU asset impairment charges for CMO manufacturing capacity of excess quantities, $64.0 million related to unutilized manufacturing capacity, and a credit of $40.2 million related to negotiated reductions to certain previously recognized firm purchase commitments.
Cost of sales for 2023 included expense of $145.9 million related to excess, obsolete, or expired inventory and losses on firm purchase commitments, $6.1 million ROU asset impairment charges for CMO manufacturing capacity of excess quantities, $64.0 million related to unutilized manufacturing capacity, and a credit of $40.2 million related to negotiated reductions to certain previously recognized firm purchase commitments.
Revenue Recognition, Product Sales - U.S. Commercial In the fourth quarter of 2023, we commenced sales of COVID-19 Vaccine to the U.S. commercial market. Product sales in the U.S. are primarily made through large pharmaceutical wholesale distributors at the wholesale acquisition cost (“WAC”).
Revenue Recognition, Product Sales - U.S. Commercial Product sales in the U.S. are primarily made through large pharmaceutical wholesale distributors at the wholesale acquisition cost (“WAC”). We recognize revenue upon title transfer (which is typically at time of delivery), provided all other revenue recognition criteria have been met.
We have developed an updated COVID-19 vaccine for the 2023-2024 vaccination season. In October 2023, the U.S. FDA granted emergency use authorization (“EUA”) for our updated vaccine for active immunization to prevent COVID-19.
We have developed and manufactured our updated COVID-19 vaccine for the 2024-2025 vaccination season for use in individuals aged 12 and older. Our updated vaccine received Emergency Use Authorization (“EUA”) from the U.S. FDA in August 2024, along with several additional global regulatory authorizations for use in the 2024-2025 vaccination season.
As of February 2024, the Company is in discussions with the Authority regarding the treatment of the remaining upfront amount previously received of $112.5 million, which is reflected in Other current liabilities on our consolidated balance sheet.
As of December 31, 2024, the remaining upfront payment previously received from the authority is classified as $36.4 million of other current liabilities and $58.8 million of Other non-current liabilities on our consolidated balance sheet.
The closing of the Private Placement occurred on August 10, 2023 (see Note 4 to our consolidated financial statements). We have an APA with the Commonwealth of Australia for the purchase of doses of COVID-19 Vaccine (the “Australia APA”).
We have an APA with the Commonwealth of Australia (“Australia”) for the purchase of doses of COVID-19 Vaccine (the “Australia APA”). In December 2024, we entered into an amendment to the Australia APA with Australia.
Under such agreements, we are contractually obligated to make payments to vendors, mainly to reimburse them for their estimated unrecoverable expenses incurred. As of December 31, 2023, these agreements are active ongoing arrangements and we expect to receive value from these arrangements in the future.
As of December 31, 2024, these agreements are active ongoing arrangements and we expect to receive value from these arrangements in the future. The amount of such obligations is dependent on the timing of termination and the terms of the relevant agreement, and cannot be reasonably estimated.
Such upfront payments generally become non-refundable upon our achievement of certain development, regulatory, and commercial milestones. On October 3, 2023, our updated vaccine received EUA from the U.S. FDA for active immunization to prevent COVID-19 in individuals aged 12 and older.
The timing to fulfill performance obligations related to the Sanofi CLA will depend on the timing of costs incurred relative to total expected costs. In August 2024, our updated COVID-19 vaccine received EUA from the U.S. FDA for active immunization to prevent COVID-19 in individuals aged 12 and older.
Any delays or disruptions in these suppliers’ operations could prevent or delay the delivery of customer orders.
Any delays or disruptions in these suppliers’ operations could prevent or delay the delivery of customer orders. As of December 31, 2024, we had $545.3 million in cash and cash equivalents and restricted cash and $392.9 million in marketable securities as compared to $583.8 million in cash and cash equivalents and restricted cash as of December 31, 2023.
While our current cash flow forecast for the one-year going concern look forward period estimates that we have sufficient capital available to fund operations, this forecast is subject to significant uncertainty, including as it relates to revenue for the next twelve months and our ability to execute on certain cost-reduction initiatives.
Based on our current cash, cash equivalents and marketable securities balances and our current cash flow forecast for the one-year going concern look forward period, we concluded that we expect to have sufficient capital available to fund our operations for the one-year period from the date that these financial statements are issued.
Our plans may include raising additional capital through a combination of equity financings, which may include at the market offerings under our August 2023 Sales Agreement, debt financings, collaborations, strategic alliances, asset sales and marketing, distribution, or licensing arrangements. New financings may not be available to us on commercially acceptable terms, or at all.
Additionally, our plans include our ongoing restructuring and cost reduction measures (see Note 18 to our accompanying consolidated financial statements), and may also include raising additional capital through a combination of additional equity and debt financing, collaborations, strategic alliances, asset sales, and marketing, distribution, or licensing arrangements.
The decrease in selling, general, and administrative expenses is primarily due to cost containment measures to reduce our operating spend including a decrease in professional fees and advertising and promotion costs in support of our COVID-19 commercial program, partially offset by restructuring expenses.
The decrease in selling, general, and administrative expenses is primarily due to cost containment measures to reduce our operating spend, including a decrease in advertising and promotion costs in support of our COVID-19 commercial program, employee expenses, and professional fees, partially offset by restructuring expenses. 77 Table o f Contents Other Income (Expense), Net: 2024 2023 Change Other income (expense) (in thousands): Interest expense $ (20,075) $ (14,416) $ (5,659) Gain on disposition of Novavax CZ assets 51,949 — 51,949 Other income 40,442 37,896 2,546 Total other income (expense), net $ 72,316 $ 23,480 $ 48,836 We had total net other income of $72.3 million for 2024 compared to total net other income of $23.5 million for 2023, an increase of $48.8 million.
As of December 31, 2023, $102.8 million was classified as short-term Deferred revenue and $485.3 million was classified as long-term Deferred revenue with respect to the Canadian APA on our consolidated balance sheet.
As of December 31, 2024, $15.6 million was classified as current Deferred revenue and $118.2 million was classified as non-current Deferred revenue with respect to the Australia APA in our consolidated balance sheet, which will be recognized in product revenue as doses are delivered to Australia.
Revenue for the years ended December 31, 2023 and 2022 was primarily comprised of revenue from product sales of COVID-19 Vaccine and services performed under our U.S. government agreement with Advanced Technology International (“USG Agreement”), the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with the partnership formerly known as Operation Warp Speed.
Revenue for the year ended December 31, 2024, was primarily comprised of revenue from licensing and product sales of COVID-19 Vaccine. Revenue for the year ended December 31, 2023, was primarily comprised of revenue from product sales of COVID-19 Vaccine and services performed under our USG Agreement.
Subsequently, for the year ended, December 31, 2022 we recorded inventory write-downs of $447.6 million and losses on firm purchase commitments of inventory of $155.9 million to the extent the cost cannot be recovered based on estimates about future demand.
For the year ended December 31, 2024, we recorded inventory write-downs of $21.0 million and losses on firm purchase commitments of inventory of $7.4 million. In addition, for the year ended December 31, 2024, we recorded recoveries on firm purchase commitments of $0.7 million related primarily to negotiated reductions to previously recognized firm purchase commitments.
During 2023, we incurred a net loss of $545.1 million and had net cash flows used in operating activities of $714.0 million.
At December 31, 2024, we had $530.2 million in cash and cash equivalents, $392.9 million in marketable securities, and had negative working capital of $25.5 million. During 2024, we incurred a net loss of $187.5 million and had net cash flows used in operating activities of $87.3 million.
Research and Development Expenses Research and development expenses decreased to $737.5 million for 2023 as compared to $1.2 billion for 2022, a decrease of $497.8 million.
The cost of sales as a percentage of product sales may fluctuate in the future as a result of changes to our customer mix, quantity of dose sales, or standard costs. Research and Development Expenses Research and development expenses decreased to $391.2 million for 2024 as compared to $737.5 million for 2023, a decrease of $346.3 million.
Under the terms of the Gavi APA, we received an upfront payment of $350.0 million from Gavi in 2021 and an additional payment of $350.0 million in 2022 related to our achieving EUL for our prototype vaccine by the WHO (the “Advance Payment Amount”).
We entered into an APA with the Vaccine Alliance (“Gavi”) in May 2021 (the “Gavi APA”), pursuant to which we received upfront payments of $700 million from Gavi (the “Advance Payment Amount”) to be applied against purchases of our prototype vaccine by certain countries participating in the COVAX Facility.
As of December 31, 2023, we had $583.8 million in cash and cash equivalents and restricted cash as compared to $1.3 billion as of December 31, 2022. 81 Table of Contents We funded our operations in 2023 primarily with cash and cash equivalents, upfront payments under APAs, revenue from product sales, royalties under licensing arrangements with our strategic partners, and proceeds from the sale of common stock, together with revenue under the USG Agreement that support our COVID-19 Vaccine development activities.
We funded our operations in 2024 primarily with cash and cash equivalents, marketable securities, non-refundable upfront payment under the Sanofi CLA and Sanofi Subscription Agreement, proceeds from the sale of securities under our August 2023 Sales Agreement, upfront payments under APAs, and revenue from product sales.
For 2024, we expect research and development expenses to decrease as compared to 2023 as we continue to assess our manufacturing needs and modify our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated demand for, COVID-19 Vaccine and as additional manufacturing activities that were previously recognized as research and development expenses begin to meet the criteria for capitalization as inventory. 77 Table of Contents Selling, General, and Administrative Expenses Selling, general, and administrative expenses decreased to $468.9 million for 2023 from $488.7 million for 2022, a decrease of $19.7 million.
For 2025, we expect research and development expenses to decrease as compared to 2024 as we continue to right-size our operating expenses as part of our cost reduction initiative. Selling, General, and Administrative Expenses Selling, general, and administrative expenses decreased to $337.2 million for 2024 from $468.9 million for 2023, a decrease of $131.8 million.
Removed
Department of Defense (“DoD”), and CEPI; funding under our APAs and supply agreements and amendments to, termination of, discussion regarding, or legal disputes relating to any such agreement; our available cash resources and usage and the availability of financing generally; plans regarding partnering activities and business development initiatives; and other matters referenced herein.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are subject to certain risks that may affect our results of operations, cash flows, and fair values of assets and liabilities, including volatility in foreign currency exchange rates and interest rate movements.
Biggest changeQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are subject to certain risks that may affect our results of operations, cash flows, and fair values of assets and liabilities, including volatility in foreign currency exchange rates and interest rate movements. 83 Table o f Contents Foreign Currency Exchange Risk Although we are headquartered in the U.S. our results of operations, including our foreign subsidiaries’ operations, are subject to foreign currency exchange rate fluctuations, primarily the U.S. dollar against the Euro, Swedish Krona and Czech Koruna.
As such, we do not believe that we are exposed to any material interest rate risk as a result of our borrowing activities. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is set forth on pages F-1 to F-45. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
As such, we do not believe that we are exposed to any material interest rate risk as a result of our borrowing activities. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is set forth on pages F-1 to F-47. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
A 10% decline in the foreign exchange rates (primarily against the U.S. dollar) relating to our foreign subsidiaries would result in a decline of stockholders’ equity (deficit) of approximately $52 million as of December 31, 2023. 84 Table of Contents Market and Interest Rate Risk The primary objective of our investment activities is preservation of capital, with the secondary objective of maximizing income.
A 10% decline in the foreign exchange rates (primarily against the U.S. dollar) relating to our foreign subsidiaries would result in a increase in stockholders’ deficit of approximately $57 million as of December 31, 2024. Market and Interest Rate Risk The primary objective of our investment activities is preservation of capital, with the secondary objective of maximizing income.
Removed
Foreign Currency Exchange Risk Although we are headquartered in the U.S. our results of operations, including our foreign subsidiaries’ operations, are subject to foreign currency exchange rate fluctuations, primarily the U.S. dollar against the Euro, Pound Sterling, Swedish Krona, and Czech Koruna.

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