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Cantor Global Healthcare Conference 2025

Sep 4, 2025

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

... All right.

John Jacobs
President and CEO, Novavax

I remember we were eating years ago, and Boris Johnson was there, and he had the wool socks, and they kept sliding down, and you could see his leg when he was up on the stage. So I make sure I have a little bit of traction in my socks.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

All right. I was gonna say, is it my socks?

John Jacobs
President and CEO, Novavax

Yeah.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

But that's all right. Is this on video, or is it just?

John Jacobs
President and CEO, Novavax

Audio.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

All right, so it doesn't matter. Welcome to the Cantor Global Healthcare Conference. I am Pete Stavropoulos, a biotech analyst at Cantor. With us we have Novavax, and I'm pleased to introduce the company. Let's start off with a brief introduction of yourselves and a brief description of the company.

John Jacobs
President and CEO, Novavax

Thank you, Pete. John Jacobs, CEO.

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

I'm Ruxandra Draghia. I head R&D.

James Kelly
EVP and CFO, Novavax

Jim Kelly, I'm the CFO. Thanks for having us, by the way.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Thank you for joining us.

John Jacobs
President and CEO, Novavax

Thanks for-

James Kelly
EVP and CFO, Novavax

Thank you.

John Jacobs
President and CEO, Novavax

Having us, Pete. Look, you know, we lead Novavax. We're an innovative biotech that has a unique technology platform. We focus on vaccine development. Over the last 2.5 years, we've taken the company on quite a significant journey post-pandemic, where we've converted it, together as a leadership team, to an organization that's focused on driving our technology forward to create value, so we were a company that had one product, which emerged from the tech platform to help take on a global pandemic. The company had built a vertically integrated structure that came with high expense and great opportunity.

Through the pandemic, they generated a successful vaccine, but now we've converted the company by shrinking down that expense base, really cleaning up the balance sheet and the P&L, strengthening our cash runway while maintaining our capabilities, and focusing on multiple opportunities for value creation through the out-licensure of our technology, through partnering. A strong example is the Sanofi deal, and then also through a new R&D pipeline that Ruxandra is helping to lead development on four new assets, each of which could compete in multi-billion dollar marketplaces, assuming success. We're also exploring beyond vaccination of respiratory diseases and bacterial diseases. We're taking a look at oncology, and we think there's.. We're optimistic about what we're seeing early coming out of the lab in our oncology experiments with Matrix-M.

So a bright future ahead for Novavax, involving potentially multiple partnerships, the further expansion of our Sanofi deal and the success there, and a new and growing pipeline that's early stage, but encouraging right now.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Okay, so, congratulations on the full approval of the COVID vaccine-

John Jacobs
President and CEO, Novavax

Thank you

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

... in 65 years and older plus population. I know there was a little bit of a delay, 1 month-2 months, but could you just remind us what the data supported that approval, what the data was that supported that approval, and how strong is it from an efficacy, but more importantly, from a safety perspective?

John Jacobs
President and CEO, Novavax

Rux, you wanna take that one?

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

That's an excellent question. Thank you for asking. So the clinical trial that actually supported our BLA approval was in almost 30,000 individuals, but this is on the top of already existing data. We have more than 50,000 individuals that have been enrolled in different clinical trials, in the safety database, in the general population, vaccination of about five million individuals. I would like to remind everyone that our vaccine, it's an innovative technology. We do have a protein-based antigen, but then we have the adjuvant Matrix-M. We have evaluated Matrix-M in the context of these clinical trials, but also with different other platforms. And the data, as far as the safety, the reactogenicity, has been proven very favorable compared to other vaccine platforms. All that body of evidence have been extensively published.

We have lots of papers out there. We have done also, not only clinical trial analysis, but real-world evidence analysis. So again, the data that is supporting our vaccine is really comprehensive.

James Kelly
EVP and CFO, Novavax

In your question, you noted the label for over 64. Our label is 65-plus

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Right

James Kelly
EVP and CFO, Novavax

In addition to that, 18- 64, with at least one risk factor.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yeah.

James Kelly
EVP and CFO, Novavax

Yeah.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

But that's, that's broadly across all COVID vaccines?

John Jacobs
President and CEO, Novavax

Correct.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

So just... Yeah.

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Correct.

James Kelly
EVP and CFO, Novavax

That's right.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

It's nothing specific for you,

James Kelly
EVP and CFO, Novavax

That-

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Of course

John Jacobs
President and CEO, Novavax

... and we believe that represents the majority of people who've chosen to get a vaccine in the last two seasons.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yes. Right.

John Jacobs
President and CEO, Novavax

The cohorts of people who choose to sign up tend to be those that are either older or have risk factors and are concerned about that and want a vaccination.

James Kelly
EVP and CFO, Novavax

That's exactly right.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

So part of the approval includes a post-marketing commitment. You know, what exactly was the request, and where do you stand on this?

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

So, with the approval of the BLA came one post-marketing commitment. That has also evolved in the last few months. A couple of other post-marketing commitments have been added, but it was not surprising. Post-marketing commitments are something that occur for all vaccines that are approved. Be it, for instance, the one that have been added just very recently, which is really an evaluation of the seasonal vaccine. Yeah? This is something that occurs actually in a couple of hundreds of people every year to prove that your vaccine, it's an immuno bridging type of study. The original one was linked to a younger population, the 50-64. And again, these are not elements that are surprising.

That type of post-marketing commitments are really routine for vaccine manufacturers.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

... Okay, so, you know, Sanofi will be taking over responsibilities on the Nuvaxovid. Where are you today within that process of handing it off?

John Jacobs
President and CEO, Novavax

Jim, you wanna take that?

James Kelly
EVP and CFO, Novavax

Hey, sure. So Sanofi has taken the commercial leadership role for Nuvaxovid, and this is in the U.S., select other ex-U.S. markets. So we're thrilled. I mean, you're, you're talking about the leader in vaccines globally, so we couldn't be happier about who we're partnering with. So they're well-positioned to drive commercialization beginning this fall forward. A couple important steps are gonna happen related to this transition. Later this fall, we're gonna be transitioning the MAH for both U.S. and Europe to Sanofi, and you might remember that's gonna trigger $50 million in milestone payments to us. However, in addition to that, we're continuing to prepare Sanofi to do manufacturing on their own.

There's a tech transfer that's occurring this year into the end of next year, where we'll teach Sanofi how to manufacture on their own, at the end of which, another $75 million milestone that we're anticipating, at the end of next year. In the background, however, we continue to support, operationally, Sanofi, and we're reimbursed for our efforts. The post-marketing commitment study that you just heard Ruxandra describe, excellent. Where that's gonna occur, it's ordinary course. To the extent we have an operating role, Sanofi is reimbursing us, and I mapped that all out in our most recent guidance.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

And then when it comes to, future strain selection and so forth, whose responsibility is that? Is it joint? Is it?

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

So of course, as Sanofi is going to take over, that decision is going to belong to Sanofi more and more. For this transition year, we have worked together for the strain selection. Obviously, we are watching very closely the evolution of the variants and of the strains that are emerging, and it's a continuous process. As is the case for flu, or for COVID, these strains are actually evolving, as we speak, actually. And we are obviously on top of that.

John Jacobs
President and CEO, Novavax

It's a good partnership.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yeah.

John Jacobs
President and CEO, Novavax

We communicate routinely. It's smooth operation.

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Absolutely.

John Jacobs
President and CEO, Novavax

We support each other, and the handoff's occurring smoothly, so-

James Kelly
EVP and CFO, Novavax

And perhaps one of the most important things we've heard from Sanofi recently is, as they think about their vaccine business between now and 2030 , they see it growing. They see it growing from around $8 billion now to up to $10 billion. We're a major contributor to that, so we couldn't be happier to support them along that path, and that growth comes with both launching our Nuvaxovid in their hands, but importantly, driving to launch one, possibly two combination vaccines of our COVID with their market-leading flu. So as you see, we, you know, we're thrilled to have them as a partner. They're openly describing how they're driving growth, including a major driver from our-

John Jacobs
President and CEO, Novavax

Yeah.

James Kelly
EVP and CFO, Novavax

... partnership, and so more to come.

John Jacobs
President and CEO, Novavax

Jim, we, you know, we want the audience to remember as well that Sanofi has access to our Matrix-M adjuvant piece-

James Kelly
EVP and CFO, Novavax

Mm-hmm.

John Jacobs
President and CEO, Novavax

... as you know, so they can develop as many new vaccines as they would like to using that adjuvant in their pipeline. And without speaking for them, they just made a significant investment in another technology platform that we see as very synergistic with our deal-

James Kelly
EVP and CFO, Novavax

Mm-hmm.

John Jacobs
President and CEO, Novavax

... and shows their commitment to the vaccine space for decades to come. So if they choose to develop new vaccines using our Matrix-M, we're eligible for $200 million in one-time milestones per new vaccine-

James Kelly
EVP and CFO, Novavax

That's right.

John Jacobs
President and CEO, Novavax

... and mid-single-digit royalties for two decades-

James Kelly
EVP and CFO, Novavax

Mm-hmmm.

John Jacobs
President and CEO, Novavax

... after each of those might launch. So there are layers to opportunity just in the Sanofi deal itself. Near-term milestones that Jim highlighted, the potential of one, maybe two combination launches, including our Nuvaxovid, royalties from Nuvaxovid sales this season and go forward, plus the potential of new vaccines developed using that adjuvant. That's pillar one of our three-pillar strategy for Novavax growth accretion. Second is new deals. So in closing that Sanofi deal, we made sure to maintain freedom to operate regarding out-licensure of Matrix-M. We gave nothing exclusively to our excellent partner in Sanofi. There's a lot of value creation opportunity there, but we maintain the freedom to out-license our tech to anyone else we want to, to develop additional vaccines. And we did note that we have-

James Kelly
EVP and CFO, Novavax

Mm-hmm.

John Jacobs
President and CEO, Novavax

... two additional top ten pharmas beyond Sanofi, who signed MTAs with our company, Material Transfer Agreements, where they're exploring the utility of Matrix-M in their own laboratories ... and their own portfolios.

James Kelly
EVP and CFO, Novavax

Mm-hmm.

John Jacobs
President and CEO, Novavax

Should they succeed, that could potentially turn into potential deals. Scope and scale yet to be determined, and when we can talk about those, we will, if they materialize, but that's pillar number two, is generate more deals using our tech. And pillar three is what Ruxandra's leading, the expansion of our R&D portfolio, four assets in development that are early clinical phase. In addition to that, an area number five is oncology platform, and we're really assessing, using AI and other approaches, the utility of Matrix-M in oncology as a platform, and we're exploring new formulations and supra particles of Matrix-M, expanding the IP of Matrix-M in doing so, for its utility in oncology as well. So we're very excited in the coming quarters to begin to unveil some of that early data in pillar number three of our growth strategy, which is pipeline R&D.

Our intention there, last point on that, is to create partnerships and out-licensures from those assets and platforms that we're working on. Not only can we out-license and partner with Matrix-M, but also in the new assets we create from our nanoparticle and Matrix-M technology platform to generate opportunity for additional partnerships there as well.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

So, Sanofi, just to be clear, they have access to Matrix-M?

John Jacobs
President and CEO, Novavax

Correct.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Is it sort of free rein? You know, they can go into any direction they want to, or are they restricted, or, you know, are there a certain number of exploratory studies that they can actually do and-

John Jacobs
President and CEO, Novavax

It's free rein. They can explore it. After a certain number of potential vaccines they may put into development, there are some access fees to the technology, but they still have access to it. So-

James Kelly
EVP and CFO, Novavax

That's right.

John Jacobs
President and CEO, Novavax

It's really unlimited in that way.

James Kelly
EVP and CFO, Novavax

Importantly, it's on a non-exclusive basis.

John Jacobs
President and CEO, Novavax

Correct.

James Kelly
EVP and CFO, Novavax

And, you know, what we recognize is that the vaccine industry is growing, right? It's $57 billion this year. It's growing to over $75 billion by 2030. It's a recent McKinsey study, and we want to be the technology behind it. So when we provide access, for example, to our Matrix, we're doing so on a non-exclusive basis because we see the utility of our technology for multiple players driving the vaccine industry growth. And the Sanofi agreement and partnership, just the first example.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

You know, can you touch on, you know, Sanofi's expertise and capabilities that could be leveraged to help distribute Nuvaxovid into the market?

James Kelly
EVP and CFO, Novavax

Certainly. You know, and maybe I'll point to where they are with the enhanced flu vaccine business. You know, we're looking at with their high-dose Fluzone, even with their Flublok in older adults, they have 2/3 market share in the U.S. They are the lead respiratory vaccine company globally and have a dominant position in the U.S. And this is a function not only of the strength of the products, but also their portfolio. I think you know how important contracting is.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Mm-hmm.

James Kelly
EVP and CFO, Novavax

In addition to that, they have an exceptional proprietary distribution, a distribution that they use not only for themselves, but frankly, other pharma companies leverage it. It's firewalled off in a manner. We couldn't have a better partner. So we believe our vaccine, Nuvaxovid, and future vaccines are in great hands. What they have said about this coming season, 'cause of course we can't speak for them, is that it's a learning year for them, and I should probably clarify that. We get a lot of questions about that. In order to be prepared for any given season, the contracting occurs, gosh, it begins in the prior fourth quarter-

John Jacobs
President and CEO, Novavax

Yeah.

James Kelly
EVP and CFO, Novavax

... through about April. For our vaccine, as we're transitioning to Sanofi this year, well, we didn't have our BLA yet during that contracting window, and you might have seen in our most recent authorization, hey, we got that six-month dating on our product. That was critical. So Sanofi's coming into this year saying: "Great, this is a learning year for us. We'll just kind of get all those things lined up. We'll get ready." 2026 is their year where they've got the time, they've got the product profile-

John Jacobs
President and CEO, Novavax

Yeah.

James Kelly
EVP and CFO, Novavax

... and so we're really looking forward to not just what they're doing this year, but when they've got the full strength of their capabilities to put towards the 2026 and beyond.

John Jacobs
President and CEO, Novavax

Yeah, the conversations getting ready for 2026 begin in the next few weeks even-

James Kelly
EVP and CFO, Novavax

Yeah

John Jacobs
President and CEO, Novavax

... to prepare for the next season, and now under full licensure with the full product profile in hand and approved. And this was the first time, by the way, a couple of firsts for Novavax. We got our BLA licensure, so no longer under Emergency Use Authorization. And it's the first time with our COVID vaccine, we were approved at the same time as mRNAs-

James Kelly
EVP and CFO, Novavax

Mm-hmm.

John Jacobs
President and CEO, Novavax

... by the regulatory authorities heading into this season, so again, learning year for Sanofi, baton handoff year. We just got all those pieces in place now, but next year will be their full showcase on what they're capable of from the very beginning of the start to the finish-

James Kelly
EVP and CFO, Novavax

Right

John Jacobs
President and CEO, Novavax

... on a season.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

So, you know, even 5+ years after the onset of COVID, you know, what do you see as the market opportunity for these vaccines, both in the U.S. and the rest of the world? And I'm not talking specific to yours, but overall, broadly.

John Jacobs
President and CEO, Novavax

Yeah, overall, I mean, I think you saw the U.S. stabilize the last couple of seasons around that high 30s to low 40, regarding millions of people getting the shot.

James Kelly
EVP and CFO, Novavax

That's right.

John Jacobs
President and CEO, Novavax

And that stabilized. The global market was roughly $9 billion or so, Jim, in value-

James Kelly
EVP and CFO, Novavax

That's exactly right.

John Jacobs
President and CEO, Novavax

... in the most recent season. But what we're really excited about is combination therapy, Pete. W here we see, and if you look at some of Sanofi's comments in the public domain and others, Moderna, et cetera, about combination therapy, and we see strong consumer preference and physician preference in our own research for having combination options and frankly, non-mRNA-

James Kelly
EVP and CFO, Novavax

Exactly

John Jacobs
President and CEO, Novavax

... options as well. We offer a protein-based non-mRNA option, and the only one on the COVID side. As Jim mentioned before, Sanofi is the global leader in flu. They know how to do it. They're world leaders in vaccine technology and development. We're so excited to be able to ride on that journey with them in combination with that world-leading flu vaccine. In fact, my mother-in-law gets their vaccine every year. She's 82 years old, right? That high dose from Sanofi, and she feels protected, and she is protected by it. We get to ride with them in combination vaccines, potentially out into the future, and as so many consumers go every year to get that flu shot, up to 50% of folks who got a COVID shot or so got a flu shot, according to the-

James Kelly
EVP and CFO, Novavax

Mm-hmm.

John Jacobs
President and CEO, Novavax

... U.S. database. When you lift COVID by attaching it to flu. 'Cause you get that option to have it all in one shot studied as a combination specifically for that purpose. So Sanofi's projecting significant growth in the COVID marketplace based on that, and we couldn't have, as Jim said, a better partner-

James Kelly
EVP and CFO, Novavax

Yeah

John Jacobs
President and CEO, Novavax

With a world-leading flu vaccine to put our differentiated protein-based COVID vaccine together with for that future, and we think that bodes well for growth in the COVID market in years to come. Very hard to put a crystal ball on that and give you numbers and percentages today with everything going on, but we're excited about the potential of combination, what that may do in the future.

James Kelly
EVP and CFO, Novavax

John?

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

The 2030 $75 billion vaccine market is partially built off into that.

John Jacobs
President and CEO, Novavax

Yeah.

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

We need to remember that 2030 is not very far away. We are almost in 2026, so it's going to take only about four years or five years to get from where we are today to that very-

John Jacobs
President and CEO, Novavax

The potential growth-

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Potential growth-

John Jacobs
President and CEO, Novavax

... in the global market for vaccines.

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

of the global market. So and we do believe very strongly that these combination vaccines, and the fact that some of these vaccines are getting approved, are going to be part of that solution.

John Jacobs
President and CEO, Novavax

Thank you, Rux.

James Kelly
EVP and CFO, Novavax

Yeah, so-

John Jacobs
President and CEO, Novavax

Jim, you had something to add.

James Kelly
EVP and CFO, Novavax

So one thing I think that we might be able to share, 'cause it's out there in the public domain, just sort of the dimensions of our royalty rates. And so I just want to give you an order of magnitude. What does it mean cash flow-wise, both the COVID market and the combination market to us as Sanofi executes? All right, so we know the COVID market last year was approximately $9 billion. U.S. market was likely $3.5 billion-$4 billion of that. All right, for each billion dollars of sales by Sanofi of our COVID vaccine, we're able to receive royalties, approximately $200 million. All right? So you just gotta ask yourselves, where are they gonna play in terms of order of magnitude?

When you look at the combination marketplace, great update from this firm called Orgenesis at the World Vaccine Congress in D.C. in April. Okay, they estimate that the combination flu and COVID market, point estimate, about $8 billion. All right? So for each billion that, Sanofi sells of their combination of their flu and our COVID, we're eligible for about $100 million in royalties. So we're talking about the flu-enhanced flu leader who has 2/3 market share. Now, I'm not saying that's gonna be their peak market share, but you're getting order of magnitude counted in the hundreds of millions of dollars of opportunity of cash flow coming to our company.

John Jacobs
President and CEO, Novavax

That's for one combination, Jim.

James Kelly
EVP and CFO, Novavax

That's just for one combination.

John Jacobs
President and CEO, Novavax

Sure.

James Kelly
EVP and CFO, Novavax

And it is for this reason that when we talk about our lean and agile operating model, I think John describes it as a unicorn, where you get pharma-light performance on the top line, Rux driving innovation in our pipeline. But we're driving towards non-GAAP profitability as quickly as possible. You're seeing the orders of magnitude. We're saying it could be as early as 2027, but guided by, of course, market performance by Sanofi, including launch timing for their combination products.

John Jacobs
President and CEO, Novavax

Imagine a world and a market of combination flu/COVID vaccines, where you have a Moderna out there and successful in this scenario, where Sanofi has potentially two combination vaccines, each of which have our Nuvaxovid and are eligible for royalties.

James Kelly
EVP and CFO, Novavax

Mm-hmm.

John Jacobs
President and CEO, Novavax

And then you have ours potentially out-licensed to a third party, which we're in discussions for and hope to achieve.

James Kelly
EVP and CFO, Novavax

That's right.

John Jacobs
President and CEO, Novavax

So should we achieve that, in that scenario, you'd have four combination flu/COVID vaccines: two by the world leader in flu with our Nuvaxovid in it, one with our flu and Nuvaxovid by a third party, who would have the scale, scope, and desire to do that, and one by Moderna. So every time I add that up in my simple view, that's three-

James Kelly
EVP and CFO, Novavax

A lot of opportunity.

John Jacobs
President and CEO, Novavax

... out of four shots on goal for us to get a check when someone gets one of those shots, right?

James Kelly
EVP and CFO, Novavax

Yeah.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

There is CDC data that sort of suggests that 50% of the people who did receive the COVID vaccine also had the other flu in the same visit.

John Jacobs
President and CEO, Novavax

Mm-hmm.

James Kelly
EVP and CFO, Novavax

Mm-hmm.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

And so do you expect that to sort of increase, since they are actually two separate shots?

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

So again, if you're looking at the combination vaccines, both the general public and the healthcare professionals do prefer them. So more than 60% of the general public and more than 80% of healthcare professionals actually prefer combination vaccines. And as John has mentioned before, the advantage of actually designing, from the very beginning, combination vaccines, is that we are undertaking clinical trials, very rigorous clinical trials, with that combination in one shot. So it's past the point where we are getting in one arm, you know, vaccine, in the other arm, the other, which is more ad hoc combination-

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yeah

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

... if you wish. We are actually now very rigorously undertaking those clinical trials that can build that set of data that would enable that choice from both the public and the healthcare professionals.

John Jacobs
President and CEO, Novavax

Our Matrix-M adjuvant can be helpful in facilitating-

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Of course

John Jacobs
President and CEO, Novavax

... combination vaccine development, because it allows for a greater immune response with less antigen.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yes.

John Jacobs
President and CEO, Novavax

And as you know, Pete, with your background in education, as you layer on more antigen, you potentially get more side effects. Becomes more expensive also to manufacture for a company, more difficult to execute those trials. So by lowering the required antigen count, boosting immunity, Matrix-M can hopefully help to facilitate multiple combination vaccines across different vaccine platforms, not just in flu and COVID. It makes it exciting for partnering, and which further facilitates that second pillar of our growth strategy, which is additional partnerships. Rux and her team have generated data. We call her Rux, by the way. It's Ruxandra on the page. Rux and her team have generated data showing that Matrix-M could have utility across multiple vaccine platforms: polysaccharide, protein, mRNA, attenuated, et cetera. Doesn't mean it'll work every time someone works with it. Of course, nothing will-

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yes.

John Jacobs
President and CEO, Novavax

But it has the potential to have utility across all those platforms, making it even a better asset to potentially partner with.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

All right. So from a regulatory standpoint, you know, what would a CIC? What would a phase III sort of look for a CIC? You know, would it be based on immunogenicity or efficacy or both?

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Most probably both. Again, what we have done with our CIC combination, at the end of last year, we have enrolled actually a first cohort, about 2,000 individuals, to really build both the safety database for this type of combination and actually generate more of the immunogenicity data that could help us in the design, exactly as you were mentioning, of a potential clinical trial that we would undertake together with a potential partner. So, one needs to generate both immunogenicity data, and obviously, the proof is in the pudding. Yeah, you really need to show that your vaccine is safe and efficacious.

John Jacobs
President and CEO, Novavax

But again, the key for us. And well said, Ruxandra. Thank you. The key for us. See, I called you Ruxandra that time, right?

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

You see?

John Jacobs
President and CEO, Novavax

The key for us is that this will be in the hands of a partner.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yes.

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Yes.

John Jacobs
President and CEO, Novavax

That's our intention.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yeah.

John Jacobs
President and CEO, Novavax

Right, Pete? So whatever that takes, it should be in the hands of a partner that has substantial resources and the know-how, combined with our capabilities-

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Mm-hmm.

John Jacobs
President and CEO, Novavax

That we're maintaining. As we drive down our costs and infrastructure while maintaining our capabilities, we leverage our technology to drive value in the hands of others who have the capital and the resources to drive that effectively. And again, we can help. We have the expertise and the know-how on this vaccine and this tech on how to get things into development, how to take it through development, strain selection, other things. We maintain capabilities, but with a much more lean infrastructure and a more stabilized cash runway.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Okay, what are the next steps for the in-house CIC, and are you in talks?

John Jacobs
President and CEO, Novavax

The next steps are find a partner.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

All right. How do you- any discussions?

John Jacobs
President and CEO, Novavax

As we've said publicly, we're in active discussions on that, and when we get one, if we get one, we'll let you know.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

All right.

John Jacobs
President and CEO, Novavax

That's about all we can say there.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

So, we have about three- four minutes left. What are the key sort of in-house early-stage programs that you're most excited about?

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

I cannot say which child I prefer, so I can actually talk a little bit about the programs. Building on the respiratory pathogen expertise, we actually have an early RSV combination. We've talked about combination, so I'm not going to dwell on to why we have chosen that, and an early program in pandemic flu. By the way, for the pandemic flu, we just published some of the preclinical data, both in rodents and non-human primates, intravascular and intranasal in Nature Communications, so that's a very good reference, and then we do have an early program in C. diff, where obviously, the unmet medical need is very significant, and we have seen quite a number of failures as of lately.

But, we think that based on both of our-

John Jacobs
President and CEO, Novavax

You mean other companies targeting that?

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Other companies.

John Jacobs
President and CEO, Novavax

Yeah.

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Thank you, John, for making clear. It is about other companies. Using a lot of the AI machine learning modeling work, we think that we are going to have a product that is well-differentiated and hopefully much more successful. And then, we are working on a shingles vaccine. There, obviously, on the market, very big market, and very efficacious vaccine. Unfortunately, it is linked to a significant reactogenicity, and maybe about 40% of individuals who are getting the first dose of that particular vaccine are not coming to get their second dose, which is obligatory in that particular regimen. So we hope to have a vaccine that is similar in efficacy, but with a much milder reactogenicity based on the work that we have done with Matrix-M.

John Jacobs
President and CEO, Novavax

Yeah, so we're targeting multibillion-dollar market opportunities here, Pete. The top three to five areas in vaccine potential that feed into the market that Jim and Ruxandra were describing earlier and that potential growth, that's what we're targeting with our technology. So you look at shingles, excellent vaccine out there now regarding efficacy. It does have a high reactogenicity profile, so if we can improve on that, you might have a very competitive asset. So should we succeed there, that could be a really strongly competitive entry into that marketplace that we would intend to partner out.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yeah

John Jacobs
President and CEO, Novavax

And monetize as early as possible with some early results coming out of the laboratory. Secondly, C. diff. There's no vaccine out there right now. I know Pfizer's developing one that they're excited about. Companies are trying because unfortunately, my sister-in-law's best friend died from C. diff after a routine surgery at 59 years old. It woke me up to it several months ago, and how serious that really is, and there's nothing out there right now that's really effective. So we would hope if we can generate a vaccine that can be preventative on that or help someone after a surgery with that-

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Absolutely.

John Jacobs
President and CEO, Novavax

Huge public health benefit, multi-billion-dollar opportunity, we're targeting that. When you look at RSV, a billion-dollar plus marketplace right now, and as we've said earlier, combination is the way of the future. As Rux said, there's a high preference share in market research, interviews, and studies with both consumers and physicians for more convenience in a vaccine. Finding the right combinations that make sense is an art, and we're working on that, and also, we have our beautiful Matrix-M adjuvant. Not perfect, but very nice asset. Certainly helpful in development for combination vaccines, we believe, as we've said before, and excited about looking at multiple opportunities, doubles and triples on RSV and what might make sense, and then H5N1, pandemic flu. We're applying for grants.

The U.S. government is still open for business there and does have money to deploy, so we're in active discussions with them about potential grant opportunities to develop an asset to protect the U.S. population. Also in discussions with the European authorities. They're very interested in our technology platform, frankly, for many reasons. So very exciting there. Last but not least, oncology, and that's a platform play we're looking at. We're targeting platform approaches that could be more than half of tumors that lead to death. So if we're able to show some positive results there, we could have multiple opportunities and open up the doorway for the creation of potentially multiple cancer vaccines in the future with a non-mRNA option.

You know, a lot of the mRNA companies, and thankfully, and we hope they succeed as well, 'cause cancer is devastating, are working on excellent vaccines we hope that come out and help public health. We'd like to be able to do that as well with a non-mRNA option. So that's the goal.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

All right.

John Jacobs
President and CEO, Novavax

We're excited about the future at Novavax. We thank you for your time today.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yeah, one minute. You know, it's great, a lot of opportunity internally. You can also, you know, basically utilize licensing deals with Matrix-M leveraging. You know, it has a very large safety database, you know, so excited about that. But before we do leave, Jim, you've made big strides in cost-cutting and debt management. You know, how close are you to having the structure in place to actually have a sustainable and cash flow positivity?

James Kelly
EVP and CFO, Novavax

Yeah. Well, certainly. You know, as we've highlighted here today, we've got a great technology platform to invest around, and we also have exceptional partner in Sanofi, but more to come to bring cash flows into the company. We've shared with investors that, you know, we're looking and driving to non-GAAP profitability as early as 2027, and we're doing so by both supporting our partner, Sanofi, and what they do, and you heard the orders of magnitude of potential cash flow in both milestone and royalties. Then we are driving down our cost structure, and a couple important points on that. You know, we're targeting non-GAAP or combined R&D and SG&A by 2027 of $250 million. That would reflect an 85% reduction from our peak. We have done an exceptional job driving down our cost structure.

Then, in addition to that, our liabilities, our short-term liabilities, our peak, $2.6 billion. Last quarter, below $400 million. So you're watching us just literally shed cost structure, shed liabilities, and with our most recent announcement, I think you know we refinanced our convert, took $175 million-

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

Yep.

James Kelly
EVP and CFO, Novavax

... that was sitting there in 2027, took 150 of it and pushed it out to 2031. We've got a lean, agile operating model, great investments, but we're doing it in an agile way. And through some of our, you know, important non-dilutive cash raises through milestones, plus this refinancing, extending our runway along the path to that profitability. So that's what we're doing, but it's all about creating value, creating, well, life-saving vaccines.

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

All right, well, thank you very much for attending-

James Kelly
EVP and CFO, Novavax

Thank you

Peter Stavropoulos
Biotech Equity Research Analyst, Cantor

... the Cantor Healthcare Conference, and enjoyed the conversation, and looking forward to-

John Jacobs
President and CEO, Novavax

Nice to have you.

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Thank you.

John Jacobs
President and CEO, Novavax

Appreciate your questions.

Ruxandra Draghia-Akli
EVP and Head of Research and Development, Novavax

Thank you very much.

John Jacobs
President and CEO, Novavax

Thank you.

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