Novavax, Inc. (NVAX) Q4 2025 Earnings Call Transcript

Matrix-M Technology: New partnership with Pfizer to utilize Matrix-M in two disease areas within their vaccine portfolio, with one disease area already identified. Potential to generate billions of dollars in revenue through milestones and royalties.

C. difficile Vaccine Candidate: Early-stage development of a multivalent adjuvanted vaccine targeting unmet medical needs. Potential to address a $2.5 billion U.S. market opportunity.

Shingles and RSV Triple Combination Vaccines: Internal pipeline development with plans to advance at least one asset into the clinic by 2027.

Market Share Gains: Takeda achieved over 12% market share for Nuvaxovid in Japan. Serum Institute distributed over 30 million doses of the R21/Matrix-M malaria vaccine.

Global Vaccine Market: Targeting a market projected to exceed $60 billion in the next 4-5 years, with immunotherapeutic vaccines in oncology projected to reach $42 billion by 2032.

Cost Reductions: Achieved a 53% reduction in R&D and SG&A expenses for 2025, with plans to further reduce costs to $200 million or below by 2028.

Revenue Growth: Reported $1.1 billion in total revenue for 2025, a 65% increase year-over-year. Positive income achieved for both the full year and fourth quarter of 2025.

Partnership Strategy: Signed agreements with Pfizer and Sanofi, including a $30 million upfront payment from Pfizer and potential for up to $500 million in milestones. Expanded MTAs with pharmaceutical companies to explore Matrix-M applications.

Facility Rationalization: Sold U.S. and Czech Republic facilities, generating $260 million in cash and future savings of up to $230 million.

Macro and Regulatory Environment: The current macro and regulatory environment in the United States poses significant uncertainties for vaccine companies, which could impact Novavax's operations and strategic objectives.

Revenue Dependency on Partnerships: Novavax's financial projections and long-term profitability heavily depend on successful execution of partnerships, such as those with Pfizer and Sanofi. Any delays or failures in these partnerships could adversely affect revenue and growth.

Cost Reduction Challenges: While Novavax has made progress in reducing R&D and SG&A expenses, further cost reductions are necessary to achieve long-term financial sustainability. This could pose operational challenges.

Product Development Risks: The success of Novavax's pipeline, including the C. diff vaccine and other early-stage assets, is uncertain and subject to clinical trial outcomes and regulatory approvals. Delays or failures in these areas could hinder growth.

Market Competition: Novavax faces competitive pressures in the vaccine market, particularly from established players like Sanofi, which could impact its market share and revenue potential.

Supply Chain and Manufacturing Risks: The company is undergoing facility rationalization and technology transfers, such as those requested by Sanofi. Delays or issues in these processes could disrupt supply chains and impact revenue.

Economic Uncertainties: Broader economic uncertainties could affect funding, partnerships, and market demand for Novavax's products.

Revenue Framework for 2026: Novavax expects adjusted total revenue of $230 million to $270 million in 2026. This includes $35 million to $45 million from Nuvaxovid product sales, $40 million to $50 million from adjusted supply sales (primarily Matrix-M), and $155 million to $175 million from adjusted licensing, royalties, and other revenue. The latter includes $70 million to $80 million in R&D reimbursement from Sanofi, $50 million to $60 million from other partner revenue (including Pfizer), and $35 million of noncash amortization from Sanofi upfront payments.

Sanofi Partnership Milestones: Novavax anticipates earning a $75 million technology transfer milestone from Sanofi in 2026, though the timing may be impacted by Sanofi's request to complete activities at a new manufacturing site. Additionally, a $125 million milestone linked to the initiation of a Sanofi flu/COVID combination Phase III study is possible but not included in the 2026 revenue framework.

Cost Structure and Expense Guidance: Novavax plans to reduce combined R&D and SG&A expenses to $325 million in 2026, $225 million in 2027, and $200 million or below by 2028. The company aims to achieve a core spend profile of approximately $200 million in 2026, excluding $125 million in non-reimbursed Sanofi R&D support and $25 million for COVID strain change and manufacturing support.

Cash Runway and Profitability: Novavax estimates a cash runway into 2028 without new cash inflows, supported by $857 million in cash and receivables at the end of 2025 and $80 million in nondilutive cash in early 2026. The company targets non-GAAP profitability as early as 2028, contingent on successful Sanofi product development and commercial execution, as well as new business development agreements.

R&D and Pipeline Development: Novavax plans to advance at least one preclinical asset (e.g., C. difficile, shingles, RSV combination) into the clinic by 2027. The company is also exploring new Matrix-based adjuvants for oncology and infectious diseases, aiming to expand its technology's utility and create a portfolio of differentiated adjuvants.

Market Opportunities: Novavax is targeting markets projected to exceed $100 billion by the early 2030s, including a $60 billion global vaccine market within 4-5 years and a $42 billion immunotherapeutic oncology market by 2032. The company sees significant potential in areas like C. difficile, with a U.S. market opportunity of over $2.5 billion.

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