Novavax, Inc.

Good morning and welcome to Novavax second quarter 2022 financial results and operational highlights conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the start key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Sylvia Taylor, Senior Vice President of Global Corporate Affairs and Investor Relations. Please go ahead.

Good afternoon, and thank you all for joining us today to discuss our second quarter of 2022 operational highlights and financial results. A press release announcing our results is currently available on our website at novavax.com. and an audio archive of this conference call will be available on our website later today. Before we begin with prepared remarks, I need to remind you that this presentation includes forward-looking statements, including information relating to the future of Novavax, its key strategic priorities, plans and prospects for 2022, and financial guidance, including revenue and gross margin, the ongoing development of our vaccine candidates, including anticipated timing of trials and results, the scope, timing, and outcome of future regulatory filings and actions, the efficacy, safety, and intended utilization of our vaccine candidates, the global market opportunities for our vaccine candidates, the future availability of our vaccine candidates, and key upcoming milestones. Each forward-looking statement contained in this presentation is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears under the heading Cautionary Note Regarding Forward-Looking Statements in the slide deck we issued this afternoon and under the heading Risk Factors in our most recent Form 10-K and our second quarter Form 10-Q filed with the Securities and Exchange Commission and available at sec.gov and on our website at novavax.com, as well as subsequent filings with the SEC. The forward-looking statements in this presentation speak only as of the original date of this and we undertake no obligation to update or revise any of these statements. Please turn to slide three. During this conference call, in order to provide greater transparency regarding our operating performance, we refer to certain non-GAAP financial measures that involve adjustments to GAAP results. Any non-GAAP financial measures presented should not be considered to be an alternative to financial measures required by GAAP. should not be considered measures of liquidity and are unlikely to be comparable to non-GAAP financial measures provided by other companies. Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measure in a table available in the Investors section of our website at Novavax.com. Please turn to slide four. Joining me today is Stan Erck, President and CEO, who will provide an overview of recent achievements and our upcoming strategic priorities. Additionally, Dr. Philip Dubovsky, Chief Medical Officer, will discuss our clinical development updates across our pipeline, and John Trezino, Chief Commercial Officer and Chief Business Officer, will provide an update on the status of our global COVID-19 vaccine rollout, our recent progress in our label expansion, and our global commercial strategy. Finally, Jim Kelly, Chief Financial Officer and Treasurer, will provide an overview of our financial results. Dr. Greg Glenn, President of Research and Development, will also be available for the Q&A section at the end of today's call. I'd now like to hand the call over to Stan. Please turn to slide five.

Thanks, Sylvia, and thanks to everyone for joining us today to discuss Novavax's second quarter results. Once again, we have had a very significant quarter of achievements. We continue to make the transition into a commercial company, and we continue to see more and more evidence that our vaccine platform is second to none. In the next few minutes, I and my team will share with you some of the many achievements and breakthroughs that are transforming the company. While we do that, let me take a moment to address what is probably the most visible aspect of our earnings report. Our revenue for the quarter came in well below anyone's projections, and with respect to all of 2022, we're expecting to fall short of our earlier projections. For the quarter, revenue was $186 million, a significant shortfall from both the first quarter results and, as I said, from our expectations. The shortfall was a result of a couple of issues, one of which is short-term, the timing of our shipments to Europe. The other is a broader issue and will take some time to work through, and this is our changes in expectations from two major markets, the U.S. and the COVAX facilities. globally and particularly with respect to COVAX, there was a surge in supply and when coupled with challenges COVAX had with the distribution into low and middle income countries, this limited the need for them to order contracted product from us and other vaccine manufacturers. In the case of the US, I believe we were late to the market. And US vaccination was driven by what was available and shown to work MRNA vaccines. In addition, now that we are approved for primary vaccination, we are not yet approved for adolescence and boosting, which are critical indications, and we are making our way through this regulatory process. We are hopeful that we can get through this in days and weeks, but the absence of these indications slows the global rollout of our vaccine. Although there have been and will continue to be many ups and downs in these markets, we are now projecting that we will have no new revenues in 22 from the U.S. and from COVAX. Originally, we had planned to have revenue from these two markets arising from the sale of 110 and 350 million doses, respectively. In terms of where we go from here, I'm happy to say that just since July 1st, we have filled over 400 million in revenue. While we're talking about the second quarter today, this was such an extraordinary beginning to quarter three that I wanted to tell you what we have done through today. From an operational standpoint, we have, again, had one of the most productive and transformative quarters in our history. In the U.S., immunizations are currently underway with our COVID-19 vaccine, which is the first protein-based vaccine offered to Americans. This followed our emergency use authorization and unanimous recommendation from the FDA's Advisory Committee, VRBPAC, and the CDC's Advisory Committee on Immunization Practices. Globally, we continued the rollout of our COVID-19 vaccine. We have authorization in 43 countries, and as of today, we have delivered over 73 million doses around the world. We initiated new studies in adolescents and younger children. and we made progress in expanding our label. We have already received authorizations for boosting in adolescents and markets around the world with more to come. And this past quarter, we announced new data for a prototype vaccine showing that immune responses to our vaccines have proven to give broad protection against variants, which we think is a unique feature of our recombinant nanoparticle adjuvanted vaccines. We also showed data on our vaccines durability and breadth of response through 12 months. At the same time, we know the market is quickly evolving and during the quarter we advanced our Omicron strain vaccine program. I will say it one more time. This is a transformational year for the company and we're building on a great vaccine platform. And having said that, we are in a very dynamic environment. We have all the opportunities that having a great product gives us But as I've already said, we also have a number of uncertainties that we are constantly managing. It's important to note that while some of our delivery schedules have been shifted into 2023, total demand under most APAs remains unchanged. With all this in mind today, we are revising our 2022 full year revenue guidance to $2 to $2.3 billion, and we'll talk more about this during our call today. Through our commercial readiness efforts and global labor expansion to date, we believe we are laying the foundation for a successful transition to a commercial market in 2023 and are poised to play a significant role in the future COVID-19 landscape. With that, I'd now like to hand it over to Philip.