NOVAVAX Reports Fourth Quarter and 2010 Year-End Financial Results

Mar 28, 2011, 08:00 ET from Novavax, Inc.

ROCKVILLE, Md., March 28, 2011 /PRNewswire/ -- Novavax, Inc. (Nasdaq: NVAX) today announced financial results for the fourth quarter and year ended December 31, 2010.

Restated Financial Results:  As will be filed in the Company's Annual Report on Form 10-K for the year ended December 31, 2010, the Company has restated its previously issued consolidated financial statements for the years ended December 31, 2009 and 2008 and the quarterly periods ended March 31, 2010, June 30, 2010, September 30, 2010, March 31, 2009, June 30, 2009, September 30, 2009, September 30, 2008 and December 31, 2008. Any comparisons to prior periods reflect restated financial results for those periods. Accordingly, investors should no longer rely upon the Company's previously issued consolidated financial statements for these periods and any earnings releases or other communications relating to these periods.

For the fourth quarter of 2010, Novavax reported a net loss of $6.3 million, or $0.06 per share, compared to a net loss of $10.3 million, or $0.11 per share, in the fourth quarter of 2009. For 2010, the Company reported a net loss of $35.7 million, or $0.34 per share, compared to a net loss of $40.3 million, or $0.47 per share, for 2009. The decrease in the net loss in 2010 compared to 2009, excluding the $3.6 million favorable impact from the change in fair value of the Company's warrant liability, is primarily due to lower professional fees, the receipt of a therapeutic tax credit and reduced interest expense resulting from the payment of the Company's convertible notes in 2009, partially offset by increased employee-related costs. The decrease in the net loss for the fourth quarter of 2010 as compared to the same period in 2009, excluding the $3.8 million unfavorable impact from the change in fair value of the Company's warrant liability, is primarily due to lower research and development spending associated with the Company's clinical trials related to its H1N1 and seasonal influenza vaccine candidates.

At December 31, 2010, Novavax had cash, cash equivalents and short-term investments of $31.7 million compared to $43.0 million at December 31, 2009.

Dr. Rahul Singhvi, President and Chief Executive Officer of Novavax, stated: "The award of a contract from HHS BARDA to develop our seasonal and pandemic influenza vaccines capped a very productive year for our Company and represents many years of diligent work to bring our virus-like particle (VLP) technology to the forefront of vaccine development. The $97 million available to us during the first three years of the contract will allow us to, among other activities, complete a Phase III registrational trial for our seasonal vaccine candidate. In the immediate year ahead, we plan to use these funds to launch a clinical trial of our pandemic influenza vaccine candidate and develop a detailed plan for a manufacturing facility that has the capability to produce finished vaccine within 12 weeks and at least 50 million doses within six months of an influenza pandemic declaration.

"This year, we also plan to provide technology-transfer and manufacturing support to our new vaccine development partner in South Korea, LG Life Sciences, with whom we recently signed a licensing agreement to develop and commercialize influenza vaccines for South Korea and other emerging-market countries. LG will be responsible for funding clinical development and licensure of VLP-based influenza vaccines in South Korea and other countries and for construction of a new VLP vaccine manufacturing facility at its Osong campus in South Korea. This agreement is another example of our commercial strategy to develop regional partnerships and in-country manufacturing solutions with leading pharmaceutical companies around the world."

Key highlights of 2010:

  • Received notification from U.S. Department of Health and Human Services Biomedical Advanced Research and Development Authority (HHS BARDA) that the Company's proposal to provide recombinant influenza vaccine products and manufacturing capabilities for pandemic preparedness was in the competitive range for award of an advanced development contract ($179 million contract award was announced subsequently in February 2011)
  • Reported positive clinical results from first-stage of 2009 H1N1 vaccine trial in Mexico (final results were presented in February 2011 at World Health Organization conference in Geneva)
  • Reported positive clinical results from Phase II seasonal influenza vaccine study in older adults
  • Completed construction and initiated validation testing of state-of-the-art vaccine production facility in India under the Company's joint venture with Cadila Pharmaceuticals
  • Received FDA clearance and initiated launch of a Phase I clinical trial in respiratory syncytial virus (RSV)
  • Published safety and efficacy findings from multiple pre-clinical studies supporting development of RSV vaccine based on virus-like particles
  • Received a key U.S. patent covering technology for rapid, efficient and uniform production of VLP-based vaccines against current and future strains of seasonal and pandemic influenza
  • Elected Stanley C. Erck as Executive Chairman of the Board of Directors and Richard H. Douglas, Ph.D. and James F. Young, Ph.D. as new Board of Director members
  • Awarded nearly $1 million in grants under the Internal Revenue Service's Therapeutic Discovery Project to support the development of VLP-based vaccines
  • Announced promotions of manufacturing managers and appointment of new Chief Medical Officer

Anticipated events in 2011:

  • Launch Phase II trial of seasonal influenza vaccine (under HHS BARDA contract)
  • Report top-line clinical data from Phase I RSV trial
  • Develop manufacturing plan to produce finished VLP-based influenza vaccine in 12 weeks and 50 million doses within six months of pandemic influenza declaration (under HHS BARDA contract)
  • Initiate a Phase I trial in pandemic influenza (under HHS BARDA contract)

Conference Call

Novavax's management will host its quarterly conference call today at 10:00 a.m. EDT today. The live conference call will be accessible on Novavax's website at www.novavax.com under "Investor/Events" or by telephone at 1 (877) 212-6076 (domestic) or 1 (707) 287-9331 (international). A replay of the webcast will be available on the Novavax website for 90 days after the call and a replay of the conference call will be available beginning today at 1:00 pm through June 28, 2011. To access the replay of the conference call, dial 1 (800) 642-1687 (domestic) or 1 (706) 645-9291 (international) and enter pass code 54520344.

About Novavax

Novavax, Inc. (Nasdaq: NVAX), a clinical-stage biopharmaceutical company, employs its cutting-edge technology to create next-generation vaccines to prevent serious infectious diseases, such as pandemic and seasonal influenza, and respiratory syncytial virus (RSV). The Company's proprietary virus-like particles (VLPs) technology and single-use bioprocessing production system enables rapid vaccine development and production where and when it's needed, worldwide. The Company has formed a joint venture with Cadila Pharmaceuticals, named CPL Biologicals, to develop and manufacture vaccines, biological therapeutics and diagnostics in India. Additional information about Novavax is available on the Company's website: www.novavax.com.

Forward Looking Statements

Statements herein relating to future financial or business performance, conditions or strategies and other financial and business matters, including expectations regarding revenue, operating expenses, use of cash, and clinical developments and anticipated milestones, including under the contract with HHS BARDA and our assessment of the prospects and results of our clinical trials and other activities related to our VLP vaccines, are forward-looking statements. Novavax cautions that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. We caution readers not to place significant reliance on the forward-looking statements contained in this release. Factors that may cause actual results to differ materially from the results discussed in the forward-looking statements or historical experience include, among other things, the following: our ability to progress any product candidates in pre-clinical or clinical trials; the scope, initiation, rate and progress of our pre-clinical studies and clinical trials and other research and development activities; clinical trial results; even with positive data from pre-clinical studies or clinical trials, our product candidates may not prove to be safe and efficacious; decisions by regulatory agencies may delay or prevent our development programs or increase the costs of such programs; regulatory approval is needed before we can initiate clinical trials on our vaccines; regulatory approval is needed before any vaccines can be sold in or outside the United States and, to date, no governmental authority has approved any of our vaccine candidates for sale; influenza is seasonal in nature, and if approval or commercial launch after approval is not timely in relation to the influenza season, we may not be able to manufacture or sell our influenza vaccines on terms favorable to us until the next subsequent influenza season, if at all; even with our contract with HHS BARDA, we may not have the resources to fully fund all the development activities associated with successfully developing and licensing our influenza vaccine candidates, we have little or no experience operating as a federal contractor or in implementing the systems to perform as required under the contract with HHS BARDA; RSV is a difficult disease to prevent and there is significant activity by many companies toward the development of a suitable vaccine; we have not manufactured any of our vaccine candidates at a commercial level; we utilize a unique manufacturing process and the scale-up of that process may prove difficult and/or costly; our dependence on third parties to manufacture and distribute our vaccines; there are risks associated with conducting business outside of the United States; the cost of and our ability to file, prosecute, defend and enforce any patent claims and other intellectual property rights; competition for clinical resources and patient enrollment from drug candidates in development by other companies with greater resources and visibility; our ability to enter into future collaborations with industry partners and the terms, timing and success of any such collaboration; our ability to obtain adequate financing in the future through product licensing, co-promotional arrangements, public or private equity or debt financing or otherwise and other factors referenced herein. Further information on the factors and risks that could affect Novavax's business, financial conditions and results of operations, is contained in Novavax's filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov, including the factors discussed under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2010. These forward-looking statements speak only as of the date of this earnings release and Novavax assumes no duty to update such statements.


NOVAVAX, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share information)















Three Months Ended


Twelve Months Ended




December 31,


December 31,




2010


2009


2010


2009






(As Restated)




(As Restated)




(unaudited)













Revenue

$               51


$                75


$             343


$              325











Operating expenses:









Research and development

4,806


10,962


28,032


25,780


General and administrative

2,279


3,267


10,805


11,928



Total operating expenses

7,085


14,229


38,837


37,708

Loss from operations

(7,034)


(14,154)


(38,494)


(37,383)

Interest income (expense), net

48


43


180


(501)

Other income (expense)

485


-


485


-

Net gain (impairment) of short-term investments

-


156


-


(490)

Change in fair value of warrant liability

(100)


3,678


1,671


(1,972)

Loss before income tax

(6,601)


(10,277)


(36,158)


(40,346)

Income tax benefit

315


-


450


-

Net loss

$        (6,286)


$       (10,277)


$     (35,708)


$       (40,346)











Basic and diluted net loss per share

$          (0.06)


$           (0.11)


$          (0.34)


$           (0.47)

Basic and diluted weighted average









number of common shares outstanding

110,958


95,984


104,768


85,555















SELECTED BALANCE SHEET DATA

(in thousands)


December 31,
2010


December 31,
2009




(As Restated)

Cash and cash equivalents

$  8,061


$  38,757

Short-term investments

23,615


4,193

Total current assets

33,337


44,503

Working capital

23,071


36,476

Total assets

74,844


85,605

Total notes payable

400


486

Total stockholders' equity

59,050


69,952





SOURCE Novavax, Inc.



RELATED LINKS

http://www.novavax.com