Novavax, Inc.

Good morning and welcome to NOVAVAC's first quarter 2023 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 star 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 touchtone 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 Erica Schultz, Senior Director, Investor Relations. Please go ahead.

Good morning, and thank you all for joining us today to discuss our first quarter 2023 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. Please turn to slide two. Before we begin with prepared remarks, I need to remind you that this presentation includes forward-looking statements, including information related to the future of Novavax, its key strategic priorities, operating plans, objectives, and prospects. its future financial or business performance conditions or strategies, including projections on revenue and reductions in expenses and its global restructuring and cost reduction initiative, key commercial goals, including transitioning to a traditional commercial model, future product demand trends, the ongoing development of our vaccine candidates, including advancing multiple variant strains, strain selection, 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, including against COVID variants, the global market opportunities for our vaccine candidates, our manufacturing capacity, and the future availability of our vaccine candidates, and key upcoming milestones. Each forward-looking statement contained in this presentation is subject to risk, and uncertainties that can cause actual results to differ materially from those projected in such statement. Additional information regarding these factors appears under the heading Cautionary Note Regarding Forward-Looking Statements. In the slide deck we issued this morning and under the heading Risk Factors, in our most recent Form 10-K and subsequent Form 10-Qs, filed with the Security and Exchange Commission and available at www.sec.gov, and on our website at www.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 presentation, and we undertake no obligation to update or revise any of these statements. Please turn to slide three. This presentation also includes references to non-GAAP financial measure, which is forward-looking information for R&D and SG&A expense, as adjusted to exclude one-time restructuring costs, as described on this slide. Please turn to slide four. Joining me today is John Jacobs, our President and CEO, who will provide an update on our progress during the quarter for our three key priorities. Additionally, Dr. Philip Dabowski, President of Research and Development, will discuss our COVID variant strain development and pipeline, and John Trezino, Chief Commercial Officer and Chief Business Officer, will provide an update on our commercial activities. Finally, Jim Kelly, Chief Financial Officer and Treasurer, will provide an overview of our financial results. Rick Crowley, Chief Operations Officer, will also be available for the Q&A section at the end of today's call. I would now like to hand the call over to John Jacobs, Please turn to slide five.

Thank you, Erica, and thank you, everyone, for joining us today to discuss our first quarter 2023 financial results and operational highlights. We have an especially eventful call today because in addition to our first quarter results, we will also be discussing significant measures we have taken to reduce our costs and restructure our organization. And we look forward to sharing some encouraging top-line Phase II results for our combination flu COVID program. The last time we worked together was in February for the Q4 earnings call, when I was only a few weeks on the job as the new CEO of Novavax. At that time, I shared with you why I was excited to join the company, my early observations, and what our near-term top priorities are based on those early observations. First, delivering a competitive product for the upcoming fall season. Second, reducing our rate of spend, managing our cash flow, and evolving our scale and structure. And finally, deriving additional value from our technology platform and portfolio. Now as I join you for the second time with a full quarter of listening and learning behind me, I must say that this recent experience has further strengthened my resolve and confirmed for me the strong potential that our company has to make a positive difference in global public health. As we continue to execute on our priorities, if successful, I believe we will place Novavax in a stronger position for future growth and value creation. I'm encouraged by the progress we've made to date. And while we know there are still significant challenges ahead of us before we can claim success, the leadership team and I will remain completely focused. During the quarter, we have taken decisive actions and made progress on each of our three priorities, which I would like to outline for you next. Let's talk about our first priority. delivering a competitive product for the upcoming 2023 fall vaccination season. This includes aligning our COVID vaccine with regulatory and public health guidance on strain selection and making our product available in the right quantities and in a smaller unit competitive product presentation. Throughout the quarter, we have made significant progress on this priority, a critical component of which has been the collaborative relationship with the FDA and other global regulatory authorities as we prepare for the fall campaign. As part of that effort, and as we noted in the Q4 earnings call, we've been advancing multiple variant strain vaccine candidates in order to optimize our readiness for final strain selection for the upcoming fall season by the U.S. VRBPAC on June 15th. Following the FDA's decision, we will then focus all necessary resources on advancing the required variant strain vaccine with the intent of having our product on the market for the fall vaccination campaign. For the U.S., which will be the first market to evolve to a commercial purchasing model, John Trezino, our Chief Commercial Officer, will talk about how we are preparing to make our vaccine available across the major distribution channels for the upcoming fall season. This includes significant progress in our U.S. commercial team build-out and our ongoing discussions and negotiations with customers ahead of the season. Outside of the U.S., we are pleased to report that we have secured approximately $800 million in potential APA orders for 2023. We are encouraged by our progress in this area and excited about the potential we have to positively impact global health with our updated vaccine this year. Assuming we execute successfully on our plans for the U.S. and ex-U.S., we expect total revenue in the range of $1.4 to $1.6 billion for the year, inclusive of product sales and grants. Let's now move on to priority number two, which is to reduce our rate of spend, manage our cash flow, and evolve our scale and structure. Today, we announced that we are implementing a global restructuring and cost reduction initiative, which will significantly reduce our expenses while retaining the capabilities we need to help drive results and build value in the future. When fully implemented, we expect these actions will reduce our combined annual R&D and SG&A expenses for 2024 by approximately 40 to 50% when compared to 2022. Included in the plan is an approximate 25% reduction of our global workforce, as well as a consolidation of our global facilities and infrastructure. While reducing our workforce was certainly a difficult decision, This was necessary as part of a comprehensive effort to better align our infrastructure and scale to the current global opportunity for our vaccine, and ultimately to enhance our ability to help protect global health. In addition to significantly reducing our scope, scale, and expense base in R&D and SG&A, we are aggressively addressing our significant one-time current liabilities. To this end, we are pleased to report that since our last interaction, we've made significant progress in reducing these liabilities. You will hear more today about our cost management, our restructuring, and cash flow from Jim Kelly, our CFO, later in the call. And finally, let's discuss priority three, which is to leverage our technology platform, our capabilities, and our portfolio of assets to drive additional value beyond Nuvax of it alone. We continue to explore opportunities and strategies to unlock additional value from our pipeline and our technology platform, including our Matrix M adjuvant. Regarding our pipeline, we are pleased today to announce positive results from our Phase 2 COVID influenza combination and standalone influenza vaccine dose-confirming trial. Dr. Philip Dubowski will update you on these data later in the call. Depending on the outcome of the full data set, which we expect to receive over the coming months, we will evaluate our options to advance this program through strategic collaborations and or other financing alternatives. These positive results further validate our technology platform and are another example of the potential of our science to contribute to global public health. Additionally, regarding our MatrixM adjuvant, we continue to evaluate opportunities and advance partnerships to leverage this unique asset. This includes our ongoing partnership with the Serum Institute of India for their malaria vaccine R21 that is formulated with our MatrixM adjuvant. This vaccine has now been authorized in Ghana and Nigeria. The approval of this novel malaria vaccine with our MatrixM adjuvant is another example of how we are working to extract additional value from our technology platform and our assets. Regarding business and corporate development, we've been enhancing our internal focus and efforts on business and corporate development opportunities with the intention of positioning Novavax to build additional value and opportunity through our proven technology platform and our pipeline of early and mid-stage vaccine candidates. This includes the potential for outlicensing, collaborations, partnerships, joint ventures, co-promotion, and other types of opportunities over time. As I mentioned in my opening comments, my experience at Novavax the past several months has helped to reinforce my belief in the potential of our company, and I am encouraged by our recent progress. I also believe that our core business is robust, and that our strategy is the right one to help us achieve our objectives. Let me summarize those objectives one more time for you as I close my opening comments. First, we intend to make our business even stronger through the successful development and launch of a competitive product for the fall vaccination season. At the same time, we are working towards building a solid financial foundation to help support long-term growth and value creation. And finally, we are working to leverage our proven technology platform, pipeline of early and mid-stage assets, and fully integrated global capabilities to drive additional value over the long term via clinical business and corporate development activities. As I noted during our Q4 call, we intend to routinely share with you both our potential opportunities as well as the challenges we face and to provide balance and perspective on our business. With that in mind, let me be clear. 2023 will continue to be a challenging year for Novavax. Yes, we have made progress during the quarter, but we still face several challenges and have significant work to do before we can fully achieve our objectives for the year. In the coming months, our commitment is that we will continue to focus on our three priorities and put forward our best efforts in all that we do. And we will do so with gratitude for the ongoing support of our key stakeholders. Now I'd like to hand it over to additional members of the team to discuss our results from the quarter and in more detail, beginning with Philip Dubovsky to discuss updates for our pipeline and COVID variant strategy. Philip?