Novavax Reports Third-Quarter 2013 Financial Results

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| Source: Novavax, Inc.

ROCKVILLE, Md., Nov. 7, 2013 (GLOBE NEWSWIRE) -- Novavax, Inc. (Nasdaq:NVAX), a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of recombinant protein nanoparticle vaccines and adjuvants, today announced its financial results for the third quarter and nine months ended September 30, 2013.

Key Recent Corporate Highlights

  • In August, Novavax announced the closing of its public tender offer to acquire Isconova AB, having purchased approximately 99.5% of the shares during the Offer Period. Isconova AB, which manufactures a proprietary line of saponin-based adjuvants including its lead Matrix-M™ adjuvant, has been renamed Novavax AB.
     
  • In early September, Novavax presented clinical and pre-clinical data in two posters at the 53rd Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC) that provide insight into the potential application of the company's RSV F vaccine strategy. The first poster, which provided details from Novavax' RSV F vaccine Phase 1 clinical study of 220 healthy elderly adults, demonstrated that the vaccine candidate was well-tolerated, raised antibodies to potentially protective levels and was compatible with co-administration of an influenza vaccine, supporting the development of a combination respiratory vaccine. The second poster demonstrated that palivizumab-competing antibodies induced by the RSV F vaccine could provide passive protection in a relevant model, supporting our maternal immunization strategy.
     
  • In late September, in conjunction with its Analyst and Investor Update Call held on September 24, the company announced:

    o   That it had completed a $100 million public offering of approximately 32 million shares of common stock at $3.14 per share, resulting in net proceeds to the company of approximately $94.7 million after deducting underwriter's discounts and offering expenses.
     
    o   In addition, the company announced that it had reached agreement with BARDA to initiate new seasonal and pandemic influenza clinical trials under its contract. These new clinical trials include the planned initiations of a quadrivalent seasonal influenza trial in the first quarter of 2014, and a new pandemic (H7N9) influenza trial in the U.S. in the first half of 2014. BARDA has also agreed to the use of our proprietary adjuvant, Matrix-M, in the new pandemic vaccine clinical trial.
     
  • In early October, Novavax announced the initiation of a dose-confirmatory Phase 2 trial of its RSV vaccine candidate in women of childbearing age. This randomized, blinded, placebo-controlled Phase 2 study evaluates the immunogenicity and safety of multiple formulations of Novavax' RSV-F protein nanoparticle vaccine candidate with aluminum phosphate as an adjuvant. The study enrolled 720 women of childbearing age who are receiving either one or two intramuscular injections at each dose level of vaccine or placebo at days 0 and 28. Immunogenicity and safety will be evaluated over three month and six month periods, respectively.

"2013 has been a year of achievement for Novavax, starting with the announcement of breakthrough data from two separate clinical studies of our novel RSV vaccine candidate. These data validate the clinical and potential commercial value of this novel vaccine candidate," said Stanley C. Erck, President and Chief Executive Officer of Novavax. "In September, we followed those positive clinical and scientific achievements with the completion of important corporate objectives: a $100 million financing and an agreement with BARDA to move forward with seasonal influenza and pandemic influenza clinical trials. We also expect to announce top-line results before the end of the year from our ongoing pandemic (H7N9) clinical trial that we initiated in the second quarter of 2013. We are thus well positioned with the assets, agreements and validated clinical candidates to deliver against our aggressive development plans in 2014 and 2015."

Financial Results for the Three and Nine Months Ended September 30, 2013

In connection with its acquisition on July 31, 2013, Novavax AB's operations have been included in the company's consolidated results of operations and financial position as of the acquisition date. The company reported a net loss of $15.3 million, or $0.09 per share, for the third quarter of 2013, compared to a net loss of $7.2 million, or $0.05 per share, for the third quarter of 2012. For the nine months ended September 30, 2013, the net loss was $37.9 million, or $0.24 per share, compared to a net loss of $20.5 million, or $0.16 per share, for the same period in 2012.

Novavax had revenue in the third quarter of 2013 of $4.8 million as compared to $5.8 million for the same period in 2012. The decrease in revenue was primarily a result of a lower level of BARDA-funded clinical trial activity associated with the company's seasonal and pandemic influenza programs in the three months ended September 30, 2013, as compared to the corresponding period in 2012. In conjunction with the decrease in revenue, the cost of revenue was $2.3 million in the third quarter of 2013 as compared to $3.8 million for the same period in 2012. This decrease was primarily related to lower levels of activity associated with the company's previously mentioned influenza clinical trials.

Research and development expenses increased to $13.9 million in the third quarter of 2013, compared to $6.6 million for the same period in 2012, primarily a result of increased costs relating to the company's RSV and pandemic (H7N9) influenza clinical trials and higher employee-related costs. General and administrative expenses increased to $3.9 million in the third quarter of 2013 as compared to $2.1 million for the same period in 2012, resulting primarily from higher professional fees, including those associated with the company's acquisition of Novavax AB.

As of September 30, 2013, the company had $146.4 million in cash and cash equivalents and investments compared to $50.3 million as of December 31, 2012. In September 2013, the company announced a public offering of its common stock in which it raised $94.7 million in net proceeds. Net cash used in operating activities for the nine months of 2013 was $33.1 million compared to $15.0 million for the same period in 2012. The increase in cash usage from the prior year was primarily due to higher research and development spending, including the company's RSV and pandemic (H7N9) influenza clinical trials, as well as increased employee-related costs.

Conference Call

Novavax management will host its quarterly conference call today at 4:30 p.m. EST. The dial-in number for the conference call is 1 (877) 212-6076 (U.S. or Canada) or 1 (707) 287-9331 (international). A webcast of the conference call can also be accessed via a link on the home page of the Novavax website (novavax.com) or through the "Investor Info"/"Events" tab on the Novavax website.

A replay of the conference call will be available starting at 7:30 p.m. on November 7, 2013 until midnight December 7, 2013. To access the replay by telephone, dial 1 (855) 859-2056 (domestic) or 1 (404) 537-3406 (international) and use passcode 93831495. The replay will also be available as a webcast and can be found on the "Investor Info"/"Events" on the Novavax website.

About Novavax

Novavax, Inc. (Nasdaq:NVAX) is a clinical-stage biopharmaceutical company creating novel vaccines and vaccine adjuvants to address a broad range of infectious diseases worldwide. Using innovative proprietary recombinant protein nanoparticle vaccine technology, the company produces vaccine candidates to efficiently and effectively respond to both known and newly emergent diseases. Novavax is involved in several international partnerships, including collaborations with Cadila Pharmaceuticals of India, LG Life Sciences of Korea and PATH, and recently acquired Isconova AB, a leading vaccine adjuvant company located in Sweden. Together, Novavax' network supports its global commercialization strategy to create real and lasting change in the biopharmaceutical and vaccinology fields. Additional information about Novavax is available on the company's website, novavax.com.

Forward-Looking Statements

Statements herein relating to the future of Novavax and the ongoing development of its vaccine and adjuvant products are forward-looking statements. Novavax cautions that these forward looking statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include those identified under the heading "Risk Factors" in the Novavax Annual Report on Form 10-K for the year ended December 31, 2012, and filed with the Securities and Exchange Commission (SEC). Investors are cautioned not to place considerable reliance on the forward-looking statements contained in this press release. You are encouraged to read company filings with the SEC, available at sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this document, and the company undertakes no obligation to update or revise any of the statements. The company's business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

         
         
NOVAVAX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
         
         
  Three Months Ended
September 30,
Nine Months Ended
September 30,
  2013 2012 2013 2012
  (unaudited) (unaudited)
Revenue  $ 4,802  $ 5,765  $ 12,167  $ 17,510
         
Costs and expenses:        
Cost of revenue 2,276 3,838 5,619 12,740
Research and development 13,948 6,642 33,989 17,270
General and administrative 3,857 2,134 10,740 7,670
Total costs and expenses 20,081 12,614 50,348 37,680
Loss from operations (15,279) (6,849) (38,181) (20,170)
Interest income (expense), net (11) 33 17 99
Other expense (10) (10)
Change in fair value of warrant liability (401) 267 (401)
Loss from operations before income tax (15,300) (7,217) (37,907) (20,472)
Income tax expense 22
Net loss  $ (15,300)  $ (7,217)  $(37,929)  $ (20,472)
         
Basic and diluted net loss per share  $ (0.09)  $ (0.05)  $ (0.24)  $ (0.16)
Basic and diluted weighted average number of common shares outstanding 168,537 134,178 156,555 127,246
     
     
SELECTED CONSOLIDATED BALANCE SHEET DATA
(in thousands)
     
     
  September 30,
2013
December 31,
2012
  (unaudited)  
Cash and cash equivalents $122,493 $17,399
Investments 23,917 32,945
Total current assets 155,020 50,408
Working capital 140,760 38,733
Total assets 245,074 102,345
Total notes payable and capital lease obligations 2,587 1,205
Total stockholders' equity 216,574 80,240
Barclay A. Phillips
SVP, Chief Financial Officer and Treasurer
Novavax, Inc.
240-268-2000