Welcome to the Citi's 2026 Biopharma Back to School Conference. My name's Geoff Meacham. I'm the Senior Biopharma Analyst. We're thrilled today to have Novavax. We have CFO Jim Kelly and CEO John Jacobs. Guys, welcome.
Thank you.
Thanks for joining us. Maybe just to kick it off, just level set everyone with kind of the background to Novavax. Give us the kind of two minute drill, and we'll get right into the platform tech and COVID and everything.
Absolutely. Thank you, Geoff. Appreciate the question, and welcome everybody. Over the last three and a half years, we've absolutely transformed Novavax from a company that was solely focused on producing and commercializing a vaccine for COVID, to a company that's now out-licensing our technology, partnering our tech, expanding the utility of our technology, seeking to do that beyond infectious disease into oncology, and continuing to advance our own assets selectively and carefully with lean R&D bets. We're excited about our future. We started out with a deal with Sanofi and Pfizer. We have multiple potential partners in a pipeline of MTA-generated collaborations where they're experimenting with our technology right now.
We continue to advance our tech and Matrix-M and learn about oncology. In the coming quarters, expect our first set of data from preclinical experiments in oncology on our own and from a partner who is currently a top 10 pharma and a global leader in oncology. In the coming quarters, we will get their data and our data, and we will look to show a proof of concept in oncology for Matrix-M. We hope to be in the clinic with our own C. difficile vaccine asset as early as next year.
That sounds great. Would you prioritize it in that order, John? So getting COVID and getting maybe the combinations together with Sanofi kind of approved and underway, and then oncology, and then other infectious disease.
Thanks, Geoff. Maybe we talk about catalysts in the near term.
Yeah
And things like that.
Yeah.
Sanofi is our largest and first partner, and that is key. What we are looking for from Sanofi are several near-term catalysts. Number one is beginning to build important market share now in the U.S. market and other markets where they have had their first chance at a full cycle launch. Just this weekend, shipments began going into pharmacies from Sanofi. By the end of this week, you would expect most major retailers to have NUVAXOVID stock alongside mRNA. Sanofi in the coming week is to start launching their DTC campaigns to pull that through. Over the coming month or two, we expect to see some growing market share from Sanofi and look forward to that as the nearest term catalyst.
Second to that, Sanofi confirmed their commitment with Novavax leadership, and we announced that at our last earnings call, that they intend to be one of the first in the world with a COVID flu combination vaccine, and that they are now in late stage discussions with regulators on the timing to initiate that pivotal trial. When they do that in either Europe or the U.S., we earn a $125 million milestone, Geoff, so that is exciting for Novavax. We anticipate next year earning a $75 million milestone for a tech transfer, so Sanofi can take over full manufacture of our NUVAXOVID COVID vaccine. That additional $200 million, not including royalties, other revenues we may generate from new partnerships, et cetera, would put our cash runway, Jim, into the 2030s or so.
Correct.
So.
Yeah, can we talk about what would be the approximate. I know it is Sanofi's program, but you guys obviously could inform that. If they start the combination study, COVID flu, is that a two-year kind of development cycle? Is there a faster path to kind of get there?
Good question. Bob, do you want to take that one?
Sure. Bob Walker, Head of R&D at Novavax. The types of studies that we anticipate them doing are likely immunogenicity rather than efficacy in terms of a European license. Our expectation is that those would be single season studies, and so the development cycle would be essentially a year to having results, and then the regulatory process that follows.
Okay, thanks. Let's talk a little bit about the Pfizer agreement. That was one of the first ones that you guys communicated for the, let's just call it the platform. What can you share about that maybe kind of that we could look forward to future other deals? Because I know you guys are in discussions with a lot of pharmas.
Yeah, absolutely. First of all, we're very pleased to have Pfizer as a partner, as well as Sanofi, and certainly they have a remarkable and material presence in the global vaccine space. A lot of know-how there and a lot of history there, and vaccines are very important to Pfizer, not only now but in the future. So we're very strongly proud to be a partner with them on that journey, and they've obviously seen the value in our Matrix-M technology and what that might be able to do. In fact, they've selected a first field, Geoff, out of two potential fields. We have up to $500 million in milestones that we can earn in addition to the upfront $30 million payment that we've already received. $250 million in potential milestones per field for two fields. $70 million for clinical development, and another $180 million for sales-related milestones.
Royalties for two decades following that per field. Again, they've already selected the first field, so a catalyst our investors should look for is Novavax to make an announcement in the coming quarters that Pfizer has started a clinical study and we've received a milestone payment. So that would be a signal. Jim, any other comments you'd like to add on the Pfizer deal?
The Pfizer deal comes on the heels of an analogous Sanofi deal. While John mentioned two fields for Pfizer, Sanofi has access to Matrix-M across as many fields as they would like, uncapped. Therefore, now you have two of the four major vaccine players who have identified Matrix-M as an important contributor to their vaccine innovation. I think that alone shows great validation for the platform in addition to the economic promise and opportunity that John outlined.
Geoff, you asked quickly about what that may mean for other potential deals as well. I think what we need to look at are the components of that type of deal, right? You are looking at Novavax negotiate to pull forward revenue opportunity now. Versus a company that has a pipeline that may take 5 - 10 years to start generating revenue from early stage assets through to launch, we can pull forward through milestone payments now today in the near term for clinical efforts as partners use their resources and their capabilities to drive forward assets. Look for future deals that would include components such as potential upfront payments, milestones for clinical development and for sales approval, et cetera, and also royalties for decades to come per asset.
What would you say on the Matrix platform, is there a tilt in terms of its value or its viability across different therapeutic areas? I know you are studying oncology, you are studying infectious disease, but is there, what elements of it would a pharma pick and choose from?
Very interesting. I think first, just to comment on the different disease areas. Back in the second half of 2024, after the Sanofi deal, as we were framing formally our new growth strategy for the future of Novavax that we launched in January 2025, we assessed a myriad of disease categories and areas globally, and we looked at multiple factors as to which would be the most viable for us. Could our tech work? What is the POS? Unmet need, opportunity, speed to market, all multiple factors that you would expect in a value funnel or work value funnel approach, et cetera. Oncology rose to the top above other things like autoimmune diseases, neurological disorders, Alzheimer's, things like that, where vaccines may play a role in the future, longer shot.
What we like about oncology a lot, what we saw recently with Moderna and Merck, very exciting news for the whole space, for everyone, for all of us, our future health, et cetera. What we like about it a lot though is a potential faster proof of concept there. Then there are elements Bob can talk about why we believe Matrix may work in oncology, how it could help to light up the immune system there and be part of this new emerging potential ecosystem of vaccine approach there.
Yeah.
Bob, did you want to comment?
Yeah, sure. Thanks, John. We have spent much of the past number of years working on the antibody side of Matrix and understanding how it works in the infectious disease space. What is really interesting about Matrix-M is it also has adjuvant properties on the cell-mediated side of the immune system, so the T cell activation. In oncology, that is really important. It is specifically the CD8 T cell, because those are the killer T cells that are tumor killing. So that is an exciting observation that we have made and others have also replicated and that we are hoping to build on with our own R&D and with partner-led R&D to understand better where Matrix can be beneficial in the oncology space.
So maybe Bob, as a follow-up to that, there are so many new modalities being explored in oncology. You have bispecifics, you have ADCs, then John mentioned the mRNA platform coming to light as well. So maybe tell us about Matrix-M's potential in all those applications. Could Matrix-M and its CD8 function mediating properties increase efficacy of all those types of applications?
Well, what I can tell you is that Matrix has been looked at now across a great many platforms. Most of our own experience is with protein-based vaccines, but virosomes, live attenuated vaccines, subunits, the whole slew of technologies that are now in commercial vaccines that we all have received and know a lot about. Matrix consistently shows the ability to augment immune responses when you look across these platforms, and there's no reason to think that that's not going to continue to be the case as new technologies enter the vaccine space, including mRNA. I think what I'll say is that, again, we're developing the data as we speak. Some of that is being done using our own R&D resources. Some of it is being done that's partner led.
We'll be able to leverage all of those data sets going forward in order to show these results in a properly confidential way to other prospective partners and hopefully form more partnerships as we go forward.
Jarwei, obviously nothing works everywhere, and so we're in the process of learning deeply. We're far into that process on the preclinical side and experimentation phase with our own R&D team across multiple tumor categories and types. A world leader in oncology ranked in the top of world leaders in oncology, top 10 pharma is exploring across multiple tumor types as well on their platform with Matrix. Let's see what we learn. As that data rolls in in the coming quarters, we should get some insight on how well Matrix can work, where it might be more applicable than other areas, and we'll start to narrow that down.
We're in that exploratory phase now, but we started it last year, before the news on Moderna and Merck, because we did see this as a key category where we might be able to help after infectious disease. We're deep into our first big stage of exploration here. Let's see where it takes us.
If you wouldn't mind sharing with us maybe some of the metrics that would suggest Matrix-M activity. Is it CD8 positive staining? Is it tumor infiltration, tumor aggression, durability, checkpoint combination activity? Just any sort of sign that investors can help anchor onto when you guys do share that type of data.
I think, Bob, we haven't disclosed yet anything specifically, but I think you can speak generally about the types of categories to answer Jarwei 's questions.
Yeah, thanks. Thanks, John. So, in the oncology space, there are a number of translational models that are generally well accepted as early proof points to generate interest to want to look further. We're obviously availing ourselves of those translational models, and they're standard endpoints that have to do with tumor size, tumor shrinkage, immune cells, infiltrating TIL cells, like you mentioned, other immune properties, surface markers that can be indicative of specific activities that you're trying to tailor your therapy to. We're looking at the whole broad range of those readouts.
Yeah, and at combinations with other potential therapies as well.
Yeah.
Good question. Thank you, Jarwei.
Guys, Sanofi, the partnership funds a lot of the OpEx and really the company. I wanted to ask you at a high level from a COVID maybe demand kind of perspective, what are your thoughts about longer term, the picture in that category? Then maybe speak to kind of the backdrop today as we look to from a policy context, right, the attitudes towards COVID, towards vaccines.
Absolutely, and I will hand this one over to Jim, but right before I do, I think it is important to understand our position coming into this, right?
Yeah.
If you are the other companies that were there ahead of Novavax originally during the pandemic, had massive amounts of revenue coming in during that time, obviously, and then they have experienced a declination in that curve, right? For Novavax and for Sanofi, this represents upside opportunity right now. I think Jim will go through the market size, as Sanofi is a world leader in flu.
Yeah.
What COVID could mean to us with a differentiated asset in Sanofi's hands. I think that perspective matters.
Yeah
for us, that we're not defending something that's shrinking. We're actually looking to grow within what's still a significant opportunity from our perspective and Sanofi. Jim, you may want to take that one.
Will certainly. To remind everybody the importance of the respiratory marketplace within broader vaccines. Vaccines, about a $60 billion market. The top five vaccine markets are about half of that, $30 billion. Two of those five, flu, about a $5 billion-$6 billion market, and we'd estimate COVID this year, estimate about a $5 billion market, almost 50/50. This is just an estimate U.S., ex-U.S. This is the top vaccine market. That's the dollar view. It's the burden of disease view, which I think more speaks to the durability and where this market may go. At the May 28th VRBPAC, really nice job by Sanofi, Moderna, and Pfizer talking about burden of disease with COVID, as compared to flu in 65 plus. The takeaway, they're right on par with each other. They really are. This is a condition that's not going away.
There's a high burden of disease, both death and hospitalization, and you're seeing that in the recommendations, both domestically and globally. I'll start with that. Then you say, "Okay, great. We know that this is something that needs to be treated, high burden of disease, not just in over 65, but immunocompromised. We expect a significant durability." Where's the market going? Standalone, you heard about a $5 billion market, but importantly, the flu market is converging with the COVID market via combination development, of which Sanofi, is important part of that. If you take those two markets together, they'll be combined, the biggest combined market opportunity in vaccines. This is critical. As we look at the role our technology can play there, we know just from our internal marketing and preference share, there's a strong preference share for protein-based vaccines.
Sanofi invested greatly in tolerability data, the COMPARE study, showing the advantageous reactogenicity profile and tolerability profile. We think they're exceptionally well-positioned, and we're looking forward to their work in the coming weeks and years to drive COVID vaccinations with NUVAXOVID. But as you look at the intersection with NUVAXOVID, with their market leading flu, I'll remind folks, their enhanced flu, the flu pointed at the most vulnerable, they've got almost 2/3 or 70% market share. That's the exact group that you want to combine COVID vaccinations with, right? That 65%+ and immunocompromised. So we see great opportunity for NUVAXOVID, not just as a standalone in the hands of Sanofi, but to continue to grow and enhance adoption of NUVAXOVID as a part of a combination treatment with one and perhaps even two of their vaccines.
They've discussed developing NUVAXOVID plus their market leading Fluzone High-Dose and Flublok. So they're making significant investments with our technology. So we look forward to the pull-through.
Let me just follow up on that. If you look at the pushback, I'd say, on the mRNA kind of platform technology for COVID, there should be an incentive to move away from that towards protein-based vaccines, like NUVAXOVID. But I wanted to ask you, though, what's been the scorecard, though, with respect to Sanofi's rollout? You haven't seen massive share, but it's been the right direction. Totally agree that combining flu and COVID really gives you a one plus one equals three kind of idea. But maybe give us your assessment of the COVID success, I would say from Sanofi.
I would say, Geoff, it's very early right now in that stage.
Okay.
It is at the very beginning, really.
Okay.
Last year, they made the product available in the U.S., but no commercial effort behind that, and that is due to the retail access.
Okay.
Once a product gets licensed, then you can negotiate with pharmacies, you have to have access first. Even if there is consumer demand or interest, you cannot pull that through unless the vaccine is in the refrigerator with pharmacy. You have contracts with those pharmacies, pre-bookings, and other things that are part of that seasonal vaccine infrastructure in the U.S. marketplace. For COVID, even much more significantly than flu, Jim, right? It is about 90% or so plus of distribution of COVID is through pharmacy retail chains and stores, not through physicians' offices. Flu is a bit more balanced that way.
Yeah.
This year was the first full launch cycle, and what we mean by that for Sanofi is under BLA licensure to start the negotiations with retail at the end of last year. In that season, actually, is when it starts with the next year, and closed that out roughly in the springtime of this year. Now Sanofi has told us, and they are excited about being available in all the major retailers this year, and they just started shipping. Strains were approved on the same day as mRNA. Believe that is a first. Product was released, and they just started shipping over the weekend. This is the first week that pharmacies around the U.S. would begin to be stocked with NUVAXOVID.
Okay.
By the end of this week into next week, more robustly. It is very early and premature even now to look at dailies or weeklies
Okay
until pharmacies are fully stocked. Really the bulk of the season occurs starting this week into the next six to eight weeks, probably up to Thanksgiving or so, then you have the majority of shots in arms there. I think let's watch this now over the next 8-10 weeks
That's it.
how it materializes. What we would expect to see is not a gigantic market share win overnight where they gamble everything on that one season, but a methodical, purposeful approach to building meaningful share over time from Sanofi. First year launch here, take that first bite of the apple, proverbially, then move from there to next season, again, furthering that negotiation with retail, penetrating that refrigerator further. In Europe, as the Pfizer APA winds up its last year this year, tenders open up, look to Sanofi to launch in additional countries. This year you will see Canada, Germany, Sweden, others that they are launching in for the first time. It is a global market, not just a U.S. market. There is opportunity out there, and they are a global player.
We don't expect miracles overnight at all, but we do expect methodical improvement in market share penetration as they build meaningful share into a potential launch of a combination vaccine franchise. We're excited about that.
Great. Thank you for the question.
Yeah. Following up on that, definitely heard the news about Sanofi starting their direct to consumer campaign with USA Pickleball, which
Yeah
I think hit squarely at the demographic that maybe the target demographic is. Maybe on that, do you expect the patients coming to retail asking for COVID, for NUVAXOVID? Is this going to be more consumer driven, or do you think it's going to be more messaging and out on television and DTC or a physician driven type of messaging? Jim, I know you mentioned that NUVAXOVID has benefits on tolerability, so be really curious to see what type of uptake that Novavax is anticipating, at least initially for, and what's driving some of that uptake momentum.
Yeah. I tell you what, let's talk about two dimensions to your question. The first one is, it's not going to be a mystery. In the coming, I'd say, beginning as early as next week, you're going to see, hey, what is Sanofi able to do as you've got stocked into pharmacies NUVAXOVID, addition to the pull-down menu at major retailers, and they've got that distribution through major retailers. Then we all have IQVIA, and it's going to happen live. You're going to be able to witness it over the coming, as John said, 8 -1 0 weeks. Not going to be a mystery. We're going to see it pull through. You asked some important questions about, hey, how do you do it? How's this work?
As folks who might be new to the vaccine market, the way it works is pre-books, which occur way early back in Q1, retail pharmacies agree that they're going to take certain deliveries right now. These are the deliveries that are occurring of commitments to buy. Then that pull-through becomes a function of patient choice when they go to those pull-down menus and show up in the retail pharmacies. This is where Sanofi's efforts with their direct consumer campaign, which includes digital, right? Digital's a really important part of their campaign right now, and they have an orientation towards tolerability in that campaign, which makes perfect sense in light of the COMPARE data. I think folks have seen that study they funded a readout earlier this year that shows significant better tolerability as compared to mRNA on both systemic and localized reactogenicity. It's exceptional.
Let's see how they pull that through. But importantly, because availability is occurring this week in the pull-down menu, let's start looking at the trends next week and see where this goes. It's not going to be a mystery.
Totally. That makes sense. I kind of want to circle back to our earlier conversation on the combination vaccine, just given we are, call it, maybe halfway through or mostly through third quarter already, and Sanofi has stated that they are looking forward to launching the late-stage study as soon as possible. But I guess thinking about seasonality and northern hemisphere versus southern hemisphere strain selection for flu, how does that, in your view, affect timing of when a phase III may start? Could E.U. or U.S. accept a phase III study for combination using a southern hemisphere data?
Though we can't comment directly on any plans Sanofi may have in their specific timing, I think Jarwei asking an important question, Bob, about how one in general might approach doing these studies, and does it have to be tied directly to an in-season moment? Can you generate data outside of that? How might that affect, in general, a company's timing on a phase III trial?
Yep. Well, it's never simple. I think you probably already know that. For the typical big clinical efficacy studies, they tend to be favored towards the northern hemisphere just because the population is larger, the access to populations is greater, and the populations tend to be more representative of the markets that dominate the U.S. and Europe, for example.
The other part about doing phase III planning for influenza vaccine studies is that you can rotate between northern and southern hemisphere. Oftentimes, operationally, companies will set up and just prepare to do around the globe, because it's hard to predict where flu is going to break out, and you want to try to cover as many bases as possible, particularly when you're undertaking something as large, expensive, and complicated as a phase III efficacy trial.
Bob, there are other pathways as well, like an immunity-based pathway like Moderna had in Europe. You may want to comment on that.
Yeah. So, there's non-inferior immunogenicity as another potential pathway towards licensure. This is accepted in Europe. In the U.S., things have changed, so it's still evolving. A little hard to know exactly, as an accelerated approval pathway in the U.S., how open regulators are going to be to that. But there, it's less important to do a study in the season or out of the season because it's immunogenicity that you're looking for, and the strains don't have to be relevant to the ones that are circulating because you're not trying to prevent disease in those studies. You're trying to demonstrate a biomarker effect that will be extrapolatable from strain to strain. That makes sense.
Yeah. So there are different pathways to get there. For Novavax, whether they start a clinical trial or Sanofi were to start it either in Europe or the U.S., we earn our $125 million milestone, which is important. We would anticipate Sanofi, since they want to be and have claimed that they will be one of the first with a combination vaccine, to want to penetrate the U.S. market as well. So there's a pathway in both markets. We're getting additional clarity on the U.S. market pathway, and it'd be interesting to watch what Moderna says in the coming months and quarters on where they are with their original application on the COVID vaccine for the combo for the U.S. marketplace. It was encouraging to see the approval of their flu vaccine.
So we're seeing a bit of change in tone, and I think also the new news around mRNA vaccine platform and vaccines in general in oncology has also helped with that, to really re-solidify the place that vaccines may have for a long-term future in humankind. I think they're really important for public health, and I don't think there's many people that would deny that know about vaccines, so.
Let's move in a different direction. I want to talk about C. diff.
Yeah
and maybe strategically how important that is to you guys. Give us the logic of what you looked at to move into that in an intended way, and maybe give us the next data points on that program.
Right, Geoff. When I joined the company, I worked with the R&D team and with our management team to establish an even more rigorous assessment process on what we may choose to invest in from an R&D standpoint. When you couple that with our lean infrastructure, Jim, with an 80%-90% reduction in cost, importantly while maintaining all of the core capabilities we need to still generate R&D studies and assets, we've been extremely thorough in our assessment of market opportunities.
I won't go into all of the filters, but if you take a Wharton value approach and a filter approach, you're going to look at probability of success of your tech, unmet medical need, competitive pipelines, effort that it takes to put something forth, resources and dollars that it takes, what you can't do if you're pursuing a certain thing here, what are you not doing then instead? All of those trade-offs are assessed, and we filtered that down to a few key target disease areas in infectious disease to begin bringing forward our own vaccine candidate.
We landed on C. diff for many reasons, including a potential multi-billion dollar market opportunity for the same reasons that Pfizer has stated publicly. There's an unmet medical need. In fact, personally, it hit home with our family. My sister-in-law's best friend died of an unanticipated C. diff infection just last year, leaving three children behind after a routine surgery on her abdomen.
Folks, especially in Western society where there's high antibiotic use, die by the thousands from this every year, Geoff. There's nothing for them. We are absolutely rooting for our partner, Pfizer, to succeed there. It looks like they're on track with a phase III. We couldn't be more excited for all of us and for our loved ones, and also for them to build that market and establish that market with a successful vaccine. We think we've got something that's differentiated, that's a pentavalent target, including peptides that cover a broad array of the disease-causing agents in that bacterium. We're excited about what we've seen in our pre-clinical modeling, and we could be in the clinic as early as 2027 with that, heading toward proof of concept in humans.
We intend to do this as part of our existing strategy to the first potential value inflection point. If we have a partner or potential partner come in that wants to take that on and make those clinical investments and pay us milestones along the way and into our model, that makes more sense than bringing that forward ourselves, that is the path that is in our strategy. If we need to bring it a little further for further proof of concept, even into a phase II, that flexibility is already contemplated in our projected financials, Jim.
Yeah.
It would not require anything more than we have already stated we are targeting on SG&A and Bless you, Geoff. On SG&A and R&D expenses go forward. We are ready to move on that to optimize the value within our strategy. Hopefully, that is helpful, Geoff.
Very helpful.
Yeah.
Well, with that, John, Jim, Bob, thank you, guys. Appreciate the time.
All right. Thanks for having me.
Thank you, Jarwei. Thank you, Geoff.