PRESS RELEASE

PRESS RELEASE

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Novavax Reports Second-Quarter 2013 Financial Results

ROCKVILLE, Md., Aug. 8, 2013 (GLOBE NEWSWIRE) -- Novavax, Inc. (Nasdaq:NVAX), a clinical-stage biopharmaceutical company creating novel recombinant nanoparticle vaccines to address a broad range of infectious diseases, today announced its financial results for the second quarter and six months ended June 30, 2013.

Key Recent Corporate Highlights

  • In April, Novavax announced positive top-line data from its RSV vaccine Phase 2 clinical trial in women of childbearing age. In July, the company announced positive top-line safety and immunogenicity data for its RSV vaccine candidate from a dose-ranging Phase 1 study in elderly adults. Together, these clinical findings provide a solid rationale for moving forward with this vaccine candidate.
  • In July, Novavax announced that enrollment had begun in a Phase 1 clinical trial of its H7N9 influenza vaccine candidate. This followed the company's analysis, optimization and synthesis of the genes, as well as recombinant baculovirus vector construction, batch purification and administration to animals, all in 28 days. Novavax also announced in July that positive pre-clinical data for its H7N9 influenza vaccine candidate had been published online in the peer-reviewed journal Vaccine.
  • In July, Novavax completed its initial public tender offer to acquire all outstanding shares and warrants of Sweden-based Isconova AB. Isconova AB is an international company focused on the development of saponin-based, immune-modulating adjuvants that promote the immunogenic effect of vaccines. Novavax accepted the tender of 97.4% of Isconova's outstanding shares along with 100% of the warrants and extended the offer period to August 20, 2013 for any remaining untendered shares.
  • Following reports of the emerging Middle East Respiratory Syndrome Coronavirus (MERS), Novavax announced in June that it had successfully produced and initiated pre-clinical testing for a MERS vaccine candidate. The vaccine candidate, which was made using Novavax' recombinant nanoparticle vaccine technology, is based on the major surface spike protein. The company believes that its MERS vaccine candidate could offer a viable option to global public health authorities.
  • In June, Barclay "Buck" Phillips was appointed Senior Vice President and Chief Financial Officer. Mr. Phillips brings recent public biotech CFO experience along with a long history of experience in financing biotech companies.

"We have continued to demonstrate measurable progress in our RSV and influenza vaccine programs and look forward to future progress from our pipeline candidates," said Stanley C. Erck, President and Chief Executive Officer of Novavax. "In addition to the progress on our core product candidates, last quarter highlighted Novavax's capabilities in responding to emerging diseases. We took the initiative to rapidly develop and validate vaccine candidates for both H7N9 and MERS, demonstrating our ability to serve the needs of the global healthcare community through timely delivery of viable vaccine candidates for such emerging threats. We plan to review all of our programs at our upcoming analyst webcast, scheduled for September 24, 2013, and will provide details about this webcast over the next few weeks."

Financial Results for the Three and Six Months Ended June 30, 2013

The company reported a net loss of $12.6 million, or $0.08 per share, for the second quarter of 2013, compared to a net loss of $5.9 million, or $0.05 per share, for the second quarter of 2012. For the six months ended June 30, 2013, the net loss was $22.6 million, or $0.15 per share, compared to a net loss of $13.3 million, or $0.11 per share, for the same period in 2012.

Novavax had revenue in the second quarter of 2013 of $3.5 million as compared to $7.1 million for the same period in 2012. The decrease in revenue was primarily a result of a higher level of BARDA-funded clinical trial activity associated with the company's seasonal and pandemic influenza programs in the three months ended June 30, 2012, as compared to the corresponding period in 2013 when no similar clinical trials were initiated. In conjunction with the decrease in revenue, the cost of revenue was $1.6 million in the second quarter of 2013 as compared to $5.1 million for the same period in 2012. This decreased was primarily related to lower levels of activity associated with the company's previously mentioned influenza clinical trials.

Research and development expenses increased to $10.8 million in the second quarter of 2013, compared to $5.4 million for the same period in 2012, primarily a result of increased costs relating to the initiation of the company's RSV and pandemic (H7N9) influenza clinical trials and higher employee-related costs. General and administrative expenses increased to $4.0 million in the second quarter of 2013 as compared to $2.5 million for the same period in 2012, resulting primarily from higher professional fees associated with the company's tender offer of Isconova.

As of June 30, 2013, the company had $40.6 million in cash and cash equivalents and investments compared to $50.3 million as of December 31, 2012. Net cash used in operating activities for the six months of 2013 was $18.2 million compared to $10.3 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 and increased general and administrative expenses relating to the Isconova public tender offer.

Conference Call

Novavax management will host its quarterly conference call today at 8:30 a.m. EDT. 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 from 11:30 am on August 8, 2013 until midnight September 27, 2013. To access the replay by telephone, dial 1 (855) 859-2056 (domestic) or 1 (404) 537-3406 (international) and use passcode 26944315. 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 vaccines to address a broad range of infectious diseases worldwide. Using innovative recombinant nanoparticle technology, as well as new and efficient manufacturing approaches, the company produces vaccine candidates to combat diseases, with the goal of allowing countries to better prepare for and more effectively respond to rapidly spreading infections. Novavax is committed to using its technology platform to create geographic-specific vaccine solutions and is therefore involved in several international partnerships, including collaborations with Cadila Pharmaceuticals of India, LG Life Sciences of Korea and PATH. Together, these organizations support Novavax' worldwide commercialization strategy and have the global reach to create real and lasting change in the biopharmaceutical field. 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 its ongoing development of its vaccine 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). We caution investors not to place considerable reliance on the forward-looking statements contained in this press release. You are encouraged to read our 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 we undertake no obligation to update or revise any of the statements. Our 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 STATEMENTS OF OPERATIONS
(in thousands, except per share information)
         
  Three Months Ended Six Months Ended
  June 30, June 30,
  2013 2012 2013 2012
  (unaudited) (unaudited)
Revenue  $ 3,531  $ 7,103  $ 7,365  $ 11,745
         
Costs and expenses:        
Cost of revenue 1,632 5,118 3,344 8,903
Research and development 10,785 5,371 20,041 10,627
General and administrative 4,012 2,469 6,882 5,537
Total costs and expenses 16,429 12,958 30,267 25,067
Loss from operations (12,898) (5,855) (22,902) (13,322)
Interest income (expense), net 3 36 27 66
Change in fair value of warrant liability 267 (101) 267
Loss from operations before income tax (12,628) (5,920) (22,608) (13,256)
Income tax expense 5 22
Net loss  $ (12,633)  $ (5,920)  $ (22,630)  $ (13,256)
         
Basic and diluted net loss per share  $ (0.08)  $ (0.05)  $ (0.15)  $ (0.11)
Basic and diluted weighted average number of common shares outstanding 152,312 126,925 150,391 123,741

 

 
SELECTED BALANCE SHEET DATA
(in thousands)
     
  June 30,
2013
December 31,
2012
  (unaudited)  
Cash and cash equivalents $ 2,574 $ 17,399
Investments  38,025  32,945
Total current assets  45,365  50,408
Working capital  34,109  38,733
Total assets  92,918  102,345
Total notes payable and capital lease obligation  2,490  1,205
Total stockholders' equity  69,226  80,240
CONTACT: Barclay A. Phillips
         SVP, Chief Financial Officer and Treasurer
         Novavax, Inc.
         240-268-2000
Novavax, Inc.