Okay. All right. Good afternoon. I'm Eric Joseph, Senior Biotech Analyst at JP Morgan. Our next presenting company is Novavax. I think I have the rare distinction of being probably one of the last few people to introduce our CEO, Stan Erck, to bring us through to talk to us about the company. We will be doing a Q&A after the presentation. Mics will be going around the floor, and you can also feel free to submit questions via the online digital conference book. With that, Stan.
Thank you, Eric. The comment was, I think, related to the fact that after 42 wonderful years of never having a problem being in biotech, I have retired today. I announced my retirement today. I will be with the company for another year plus and working, hoping to advise them on some of the collaborations that we've established on a global basis. You're right. It may be the last introduction at a JPMorgan meeting, but in any case. I'm gonna move through. I'm not gonna go through all the slides. You can look them up on the website. I'm gonna skip a little bit.
Data light on slides, but I can tell you a little story about the company and turn it over to Q&A, where we can be data-heavy. We've got Filip Dubovský, who's one of the best Chief Medical Officers in the business. He's an encyclopedia of our data and can answer any question you want on the vast amount of data from our clinical trials. Sitting to his left, since we've just become a commercial company this last year, John Trizzino, who's our Chief Commercial Officer, can answer all questions on those subjects as well. With that start, let me just skip to here and tell you about that. Today is three years ago today.
Three years ago today, we had a company with around 90 people in Maryland and a couple dozen people in Sweden, making an adjuvant. We had, I think, $90 million-$100 million in the bank. We had a market cap of roughly $110 million, and we had enough money. We had projected to have enough money so that we'd run out of money in May. That's where we were. We were an optimistic crew, and we had a phase III pivotal trial in flu going on, where we had data coming out, expected to come out the first week of April. That's the status we had. We had sold off our manufacturing capacity, and we had no ability to make GMP product.
one day later, one day, three years ago and one day, the gene was sequenced for something called COVID-19. In the past 10 years, we've been building vaccines based upon getting gene sequences and making proteins that are folded in a way that becomes very immunogenic. So we started on this process three years ago, minus one day, and turned our company completely to COVID from that point, and built a company that is now, as this slide shows, a company that has global capabilities. We have from the 100 people I told you about, we now have 2,000 people, excluding three of our very critical partnerships with the Serum Institute, with Takeda, and with SK bioscience.
We've devoted ourselves to build the best. I think we've built a best-in-class vaccine, and that's shown by the data that we presented in two phase III pivotal trials. We've gone from having $100 million in the bank to as high as $2 billion in the bank. Now at the end of 9/30, we have $1.3 billion. We've established global manufacturing. We are making COVID. We are making a flu vaccine, and we are starting on making a Respiratory Syncytial Virus vaccine. We are respiratory vaccines, and that is our business. Let me talk about the foundation that we've built. The description, the characterization of the vaccine, the COVID vaccine 19, is very strong on safety.
We had, like others, 90%+ safety of 90%+ efficacy of our vaccine, even when we tested it in phase III trials with circulating variants. It has a stability profile which allows it to be stored at refrigerated temperatures at 2 to 8 degrees instead of being frozen, and a very strong safety component to it as well. That's what you want as a target product profile. We've taken that and developed a commercial presence in key markets in the Americas, in Europe, and in APAC. We've got now headquarters in each of those countries. In just one year, we've received authorizations in 47 different countries for our COVID-19 vaccine. We've got a manufacturing network that can make all the needs for our product. Let me move on.
We've developed what is a competitive product profile for a vaccine of choice. The vaccine that we have has been shown, as I mentioned, safe and effective. It's also been able to demonstrate breadth of protection against all variants. We've taken our vaccine and tested it against not only the original Wuhan strain but against BA.1 and 2 and 5, and show that we can make very potent immune responses against those variants. We have a durable immune response. In our clinical trials, we've shown that we can have a vaccine that lasts and prevents infection for up to past six months. We've shown that we can make a bivalent and a monovalent variant as needed.
That's going to be important later this year as we get through what is going to be a VRBPAC meeting at the end of January, and where the FDA will determine what the direction of this year's vaccine program is going to be. We've done well in 2021, 2022. What's the opportunity look like for COVID-19? There's lots of speculation about that, what's going to be going on with COVID in future years. We believe, and I think others believe, that there's going to be an annual need for revaccination. I think that's becoming more and more clear for COVID. It's a multibillion-dollar commercial opportunity, and we think that near-term opportunities remain to support increased vaccination rates globally.
We've got the combination of waning immunity from vaccination and emerging variants, which are gonna create an ongoing need for vaccination. We will be part of this, and we expect to be gaining market share throughout this, throughout the coming years. We're developing a pipeline, and we've got COVID, which was approved everywhere over the last 12 months, most recently in the United States. We're gonna build on that, and we're going to continue to expand our label for COVID vaccine and improve it so that it's available for all age groups. We're going to continue to make variants at the direction of the FDA and other regulatory agencies.
We combine that with what I told you about three years ago, which is we had a flu vaccine which we made using the same platform technology with a recombinant nanoparticle protein combined with a Matrix adjuvant and put it together with our COVID vaccine. We started a trial one year ago with a phase I and II trial with the COVID vaccine and a quadrivalent nanoparticle flu vaccine and showed great results in a phase I and II trial that brought us into a phase II trial that we started two weeks ago. We expect data from that trial in the 2nd quarter of this year, that will guide us to what we should do in a phase III trial.
The goal is to have a phase III trial for two products, a combination COVID flu vaccine and a flu standalone vaccine. Actually, we want to show our vaccine is superior to competitive vaccines in a head-to-head trial. We're restarting our RSV vaccine. We've been in that RSV business for 10 years, and we believe now with our Matrix adjuvant, with a new formulation of RSV vaccine, that we can bring RSV back into the market and probably as a combination respiratory vaccine, either with flu or COVID or perhaps all three.
Finally, the pipeline includes a malaria vaccine through a partnership with Serum Institute, who licensed a malaria antigen from University of Oxford several years ago and used our Matrix adjuvant to bring it through phase II trials, challenge trials, and through efficacy, pivotal efficacy trial in Africa for a malaria vaccine in kids. It showed 75% efficacy, which is much better than anything else that's been shown. Data from that will be published, we hope, within the coming month or two. Our plan is just to be help commercialize the product with our Matrix adjuvant and with Serum's manufacturing of the antigen. That will be coming out as a new product, we hope this year. Finally, the financial highlights.
We started, as I say, three years ago, where we had four or five months' worth of money. At the end of the third quarter, we had $1.3 billion in cash. We had, we guided to $2 billion in revenue in our first year, in our first year of commercialization, and we maintained that guidance of $2 billion. Looking ahead, we're not guiding for 2023 yet because we think it's a year that's too hard to predict as we turn into not only fulfilling our commitments under our advanced purchase agreements but also getting a commercial marketplace and turning that into revenue for ourselves. We have $2.4 billion in committed advanced purchase agreements and with delivery scheduled for 2023 and 2024.
The majority of them scheduled in 2023, and another half billion in funding remaining under our Operation Warp Speed funding agreement that will likely be used up in, 2023.
Finally, just to leave you what the upcoming milestones that are important, we've been asked to present at the VRBPAC meeting, which is the advisory meeting for the FDA on vaccines on January 26th. The discussion will be about primarily focused on what should be the vaccine strain for COVID for the 2023 fall season. I'm sure there'll be lots of opinions about it, and the vaccine companies will be presenting our data. Hopefully we'll have an answer soon after January 26th and give us guidance where we need to scale up production. We'll also have data from our phase II COVID and influenza combination and influenza standalone trial. That those data are expected midyear 2023.
We'll be able to update our vaccine support in our variant strain throughout the year. We expect to file for a U.S. BLA in 2023. With that, we would love to stimulate Q&A. We have lots of A's, and if we can get some Q's, we'd be happy to do that.
I can start with the commercial one. I mean, you're not guiding right now for 2023 revenues with Nuvaxovid. I guess two things. One, do you anticipate any additional What kind of visibility do you have on the potential for additional government contracts APAs? Secondly, I know you've talked a lot about expectations around the transition of the COVID vaccine payer paradigm transitioning from governmental to private insurer. I guess, when do you expect that transition to really kind of get underway, and then what does that look like both and or how might that differ in the U.S. versus, you know, across the pond in the EU?
Yeah. There's multiple components to that question, Eric, of course, right? We have existing APAs that were created back in early in 2021 that we're still working from and expect, as one of Stan's slide shows, is $2.4 billion of potential revenue coming from those contracts over the course of the balance of those agreements. Places like Australia, New Zealand, Canada, Europe, for example, are the foundation for some revenue generation both in 2023 and 2024. We've communicated to the marketplace about the managing of some of those volumes, but in fact, those agreements all remain intact.
The big change for 2023 is obviously gonna be the shift in the U.S. market going from pandemic and government purchasing to a more private, normal commercial marketplace. There's a couple of components there as well. The public health emergency will likely end sometime by the end of April. You'll begin to see private purchasing taking place, that will open up the market to us so that we're not bound by whatever decisions the U.S. government is making, but going out into the marketplace, the pharmacy chains, integrated delivery networks, physician markets, etc., use of distribution, in order to pre-book into that market for the fall campaign.
I think that's gonna be significant, and as we look out at the marketplace, I think the way we should be thinking about sizing the market again on one of the slides that was presented, I think in general, we're talking about a $15 billion-$18 billion global annual revenue marketplace. The two key markets for us are obviously the U.S. market and the EU market. These represent combined some in excess of $10 billion of potential revenue generation on an annual basis globally. I think, you know, we would reasonably expect that even under kind of flat competitive conditions from a product profile perspective, that it's easily to us to envision some 25%-30% market share that would grow over the next couple of years relative to those market opportunities.
I think there's a very robust COVID marketplace. I think there's a very robust market opportunity available to us given that we're presence in the U.S. market. Our commercial deployment is happening in the Americas and in place now or in the E.U. and U.K. in place now, and a growing presence in Asia-Pacific based upon the work that we've already done in Australia, New Zealand, Singapore, Indonesia, Taiwan, for example.
Hi there. What do you think has contributed to the strength of the robustness of the COVID vaccine to emerging variants, and do you expect that to be sustainable as time goes on, obviously with the virus constantly changing?
Right. That's probably me. You're referring likely to the data that we've shown now several times that the immune response to our prototype vaccine holds up. It holds up through the early variants and as well as through strains as far as BA.5. Just to remind you that our initial phase III studies, and Stan referenced this earlier, the majority of cases were caused by variants. These were the early variants. These were Alpha, Beta, Delta, some Iota, Epsilon, etc., and the vaccine worked well. I mean, that is the 90% efficacy that was the primary influence studies. We think we have a very good idea what's going on. There are obviously large conserved sections of the spike protein that don't change with when as these variants emerge.
We know where they are. We've done a lot of structure function analysis, so we understand where these neutralizing sequences are, and we know they haven't changed through BA.5. That is great news. As we look at their latest batch of variants, the most recent ones, when we look at these conserved areas, we start losing them, right? I don't think, we're gonna, you know, nothing lasts forever. I think we can fully expect when we finish our analyses to think we may need to make an adjustment. In any case, in the U.S., we're gonna be doing whatever comes out of the FDA's advice for the composition of the vaccine. If they recommend a composition to bivalent with XBB.1.5, that's what we'll deliver.
You know, we make all these routinely. We're a recombinant protein vaccine company. Every time a new sequence comes out, we generate the spike, we generate the protein, we do the analysis of the structure function to make decisions about whether our current vaccine still has utility or not. Stay tuned, I guess, is the answer to your question. Far so good. There's some threat on the horizon.
You seem, Stan, we are very advanced in terms of the malaria vaccine. Is this segment crowded, or is it a new vaccine that nobody has?
Yeah, I'll take this on. I started off my career in malaria vaccines, so I think I've done more malaria vaccine studies and failures than anyone probably in the universe, except maybe the NIH. They failed a lot. This vaccine is very similar to the one that GSK has brought forward. It's based on a hepatitis B platform, except instead of being a chimeric vaccine, each of the hepatitis B surface antigens has the NANP, the malaria sequence embedded in it. It's actually a more antigenically dense version of that vaccine. The adjuvant system is different, obviously. The adjuvant system has our own Matrix in it.
The what's been published from the Oxford Vaccine Group is that this results in induction of very high levels of antibody to the NANP, which is a critical epitope of the spores alike to prevent infections. They've tested this in challenge studies, as Stan mentioned, and now in the phase II and now phase III, and it's been presented by the Oxford Vaccine Group recently, I guess, at Trop Med. The results they presented was both in regions that they had endemic transmission as well as seasonal transmission, and the vaccine appears to work quite well. The next steps really are to go finish up the PQ process, and then start deploying the vaccine.
There's obviously a second check, a step in check with Geneva to get the PQ done before we can start using the vaccine.
Okay. Thank you.
Yeah. Hi. You mentioned, I saw on the slides prevention of infection, which if a lot of the data we've seen from the mRNA vaccines is that they're not preventing infection, they're preventing hospitalization, severe illness, and death. Do you have data on that? With no mucosal coverage, why is it that you are able to prevent infection?
Yeah. It's an interesting story. We know from multiple non-human primate studies, that when we vaccinate with our vaccine, we can actually induce sterilizing protection both in the upper airway as well as the lower airway. We do have not only translated IgG in those spaces but also IgA. Our best data from the clinic is from our U.K. phase III study, and this was published by Heath. What we looked at was illness prevention of infection through a six months observation period at a median of 101 days observation. That efficacy was 82.5% with a lower bound of about 75%. You know, why is that important?
Well, it's important because you don't get infected, you can't spread it to your family, you can't breed new variants, and you can't get long COVID and sequelae of COVID. We think it's an important finding and a feature of this technology.
Is that secret for IgA?
You know what? This was all in primates, and I don't think that we looked for the signal.
Question on your adjuvant? The Matrix series is obviously a key differentiator for Novavax and the group. Can you elaborate a little bit on how the adjuvant figures into the outlook?
Yeah. Yeah. I guess, should I keep talking?
Mm-hmm.
Thanks, boss. Yeah, the adjuvant is critical. We did early studies where we evaluated our nanoparticle with COVID with and without adjuvant, and the adjuvant is in fact required. It adds a couple of very key features, and it culminates in this immunologic phenotype we see with all of our vaccines. We get very high levels of neutralizing antibody response that are very broad, and at the same time, we have this polyfunctional cellular response. There's a Th1 bias, CD4 response primarily, and it's polyfunctional. The reason that's important is we think that's the kind of phenotype you need for memory, as well as for effector memory, right? That's what the adjuvant provides. It's the same thing it provides for the malaria vaccine.
It's the same thing that it provides for our flu product. We know from our phase III flu study that we were able to induce extremely broad immune responses, even against drifted H3N2s. We looked at a whole bunch of them, including against very old ancestral strains. What we saw for drifted flu is exactly the same thing as we see for COVID variants. It's the same phenomena. Flu drift is the same as a COVID variant. That's the same thing we're looking at.
Sorry, I have another question. For the combination flu plus COVID, is mRNA able to do that? Are they able to replicate or it will be difficult for them? Meaning we will have competition soon or is it something that you're not very much concerned about? You're going to be un-unique in this profile?
No, I mean, the mRNA companies are trying to make a combination flu, COVID vaccine. What we don't know is, will they be able to have enough antigen of flu? I think they're dose limited on their antigen and so will they have enough to be an effective flu vaccine and that's to be determined.
I, if I can just pile on, Stan. I mean, another advantage of our platform is really this breadth of immune response. If you think about a combination product, we're really looking to bring a superior flu vaccine to the market. That's the same features we want in our combination product. The breadth of immune response that we've shown can be done with flu should translate into clinical superior efficacy. That's what we aim to demonstrate, and that's what we aim to cook into our combination vaccine.
NanoFlu as a standalone. In fact, the last time we did this, we did this conference in person, right? You just presented, the phase III, immunogenicity data, which, would have enabled to accelerated approval, at least had a path to accelerated approval. Any plans to sort of revisit, registration or licensure of NanoFlu as a standalone in addition to, the CIC program?
Okay, I'm gonna keep talking unless somebody grabs the mic from me. absolutely, right? So the program now is testing both NanoFlu by itself as well as a combination approach in the phase II study. The phase III program is designed in such a way to allow licensure for both as standalone quadrivalent as well as a combination product.
Thank you. Is the RSV vaccine only targeted for older adults, or are you looking at the younger market as well?
We'll look at both. It, just the same way we did it before. We did the phase III in older adults and phase III in pregnant women to prevent hospital, to prevent disease in young kids. It turns out we missed, you know, in the 2016 through 2019, we missed the primary endpoint on both studies. It turns out when we looked at those studies that we had dramatic effects of the vaccine. They cut hospitalization in both populations by greater than half. That is without our Matrix adjuvant.
So the fact that we missed our primary endpoint, a biotech company, you get killed the next day, and then you have to scramble back up, and we didn't have the time or the funds to pursue that. Now we do. We will pursue it in both indications. Either as a standalone RSV vaccine or as a combination. But we're starting up that program now.
It's a nasty virus.
Yes. Yeah, this year is a good example of that, right? Yeah.
I guess the, you know, the competitive landscape has evolved a little bit.
Sure it has.
-on that front, right? I guess is a Matrix-M formulation sort of sufficient to compete in your view with where the competitive landscape currently is? Do you sort of need to innovate on the antigen itself?
It's a great question. The answer is I think Matrix will be sufficient. We have modified the antigen as well, but the combination of those two should give us a competitive vaccine. It is interesting that unfortunately, we taught the world how to make a RSV vaccine, but that's the way life is, so.
Maybe just coming back to Nuvaxovid commercial, if I could. Really this is a question around pricing. You have Pfizer signaling and pricing as high as $110-$103 a dose with Comirnaty. I guess, have you detected any pushback or concessions that payers might be seeking on that price point? To what extent might price be an avenue for competition or be able to compete for market share with Nuvaxovid?
Yeah. We're talking about the U.S. market, and pricing obviously is a critical element to how we're gonna view total revenue opportunity there. Moderna piled on a little bit today and came out with a signal that they'd be in the $120-$130 per dose range. This is, you know, gross, right? This is their WAC, the basis for reimbursement calculations. It's clear that price is easily more than justified if you look at pharmacoeconomic models, health technology assessments. It's the burden of disease for COVID is greater than influenza. Mortality and morbidity is significant. I think there is cost justification.
As far as, you know, what that Contracting is going to look like, you know, the payer strategy is based upon existing requirements that must be covered based upon an ACIP recommendation. I think there's not a lot of convincing we have to do there because they have to. And then what you're gonna have is a determination made about what pricing formularies might exist across some of the healthcare providers, the pharmacies, and integrated delivery networks, as I've mentioned before. Let's also keep in mind that right now, because of the public health emergency, they set an administration fee at some $40 per dose to encourage healthcare providers to make sure that they're vaccinating.
We expect that that's probably gonna reduce down to $30 per dose. There's sufficient enough incentive for vaccinations to take place. You know, as far as pricing strategy, you know, we're not gonna, you know, kind of let that cat out of the bag yet. I think Pfizer and Moderna are taking the lead here on what they want to do with pricing. We have that in our tool bag as levers that we can pull or not pull, depending upon, you know, what happens with our strategy and positioning.
I guess just also, with respect to innovation on the COVID side and the need for different variant strain formats, right, to support Nuvaxovid. I guess, can you just talk a bit about some of the real world data that you're tracking to help inform that decision? There's also, you know, there's the data in your own clinical studies, but is there sort of a broader, yeah, real world, I guess, outcomes data with the existing bivalent formats that you're tracking to sort of get a sense of a strategic path forward?
Sure. That's critical, right? It's coming. Now because of the amount of vaccines being used for Nuvaxovid globally, that data is taking longer to develop and mature. We're thinking that by the middle of this year, by 2nd quarter, we're gonna have some pretty precise estimates from the field, and those are obviously gonna be compared to the other vaccines which are being used, which are primarily mRNA. This data is gonna largely be coming from Asia in the 1st instance. We have good vaccine use in places like Korea, Taiwan, Singapore and Japan, and those are the places that we think the data is gonna be coming out of initially.
Okay. All right. We'll hold for one more question from the floor, if there is one. All right, great. Well, I think we'll leave it there for time. Thanks so much to the Novavax team.
Thanks.
Thanks, Dan.