Novavax, Inc. (NVAX) CEO John Jacobs Presents at JPMorgan forty second Annual Healthcare Convention Transcript

Novavax, Inc. (NASDAQ:NVAX) JPMorgan forty second Annual Healthcare Convention January 8, 2024 8:15 PM ET

Firm Members

John Jacobs – President and CEO

John Trizzino – Chief Business Officer & Chief Enterprise Officer

James Kelly – CFO

Filip Dubovsky – President of Analysis & Improvement

Convention Name Members

Eric Joseph – JPMorgan

Eric Joseph

All proper, okay. We’ll get began right here. I am Eric Joseph, Senior Biotech Analyst with JPMorgan. And our subsequent presenting firm is Novavax. Presenting on behalf of the corporate is CEO, John Jacobs. There’s going to be a Q&A session after the presentation. So simply elevate your hand. We’ll convey a mic round for many who have questions. And for these tuning in through webcast, you’ll be able to submit questions there as effectively.

So with that, John please?

John Jacobs

Thanks, Eric. Good night, everybody. Thanks for becoming a member of us tonight at this late hour. And we’re in all probability standing between you and dinner and a cocktail, or for a few of you that I do know possibly cigar and that type of factor. However actually recognize you becoming a member of us this night.

I am CEO of Novavax, John Jacobs, and I am joined tonight by a number of colleagues, who will likely be becoming a member of me for the Q&A session, Dr. Filip Dubovsky, our President of R&D; John Trizzino, our President and Chief Working Officer; and Jim Kelly, our CFO.

Let me discover the clicker right here. Sorry about that. So only a cautionary notice, we will likely be making forward-looking statements this night. So please ensure you learn our cautionary notice that is accessible on the JPMorgan portal together with our deck and every other disclosures we’ve in our company web site and in our supplies that we have shared within the public area.

So look, we’ll be seeing quite a lot of numbers the subsequent few days at JPM, P&Ls, investments, headcount, alternatives, market shares, so I figured I would get that out of the best way and begin with a number of numbers. So I am going to open up on numbers, and I would like every of you within the viewers to consider two essential issues. What are the 2 issues that these numbers have in widespread? If anybody can determine it out, you gained the prize already that will likely be accessible out again. So we’ll let you understand. Let’s examine.

And past the colour of the font, there is a couple essential issues that these numbers have in widespread. So simply give it some thought for a second. Apart from folks on my crew, any guesses or ideas?

Let’s begin with 1,300. That includes kids in Africa. Surprising statistic, however every single day 1,300 kids in Africa die of malaria. That is the equal of two United States Elementary Colleges, every single day price of youngsters. Actually, globally, 630,000 folks die of malaria yearly, largely in Africa.

The second set of numbers 41 million, 710,000 and 52,000, that is flu. During the last 5 years, peak incidence of flu in a single given 12 months was 41,710,000 hospitalizations, 52,000 deaths.

Anybody have a guess as to what the three million quantity represents? Clue Novavax has a COVID vaccine available in the market. No prize for that. 3 million deaths to COVID in 2020 alone, not together with ’21 and ’22, or the prior season. In 2023 — and a few folks suppose COVID has gone away, it has not. We misplaced my father-in-law final July to COVID-induced pneumonia. So for me, it is actually private, for my spouse, it is actually private. It is right here to remain.

So the 2 issues these have in widespread, primary, these numbers may be prevented by means of vaccination. And quantity two, Novavax is in all three of those markets. Actually, the CDC and different sources say that tens of hundreds of thousands of lives may be saved by vaccination. That is what we do.

What we do issues, as an trade. What we do issues, as Novavax. And for those who’re within the monetary trade, for those who’re an analyst, for those who’re a banker, for those who’re lending cash out, and also you’re supporting the biotech trade and firms like Novavax, what you do issues quite a bit. You are offering us with the fairness capital to convey property like this ahead to save lots of hundreds of thousands of lives. What we do collectively makes a giant distinction. That is our mission at Novavax and we’ll by no means relaxation in our quest to guard well being of individuals in every single place all over the world. In order that’s our mission. That is why we exist.

Let’s speak about who we’re, and our capabilities. Novavax is a completely built-in commercial-stage biotech firm targeted completely on the event of life saving vaccines. We’ve got our first product, out our business product, that is our COVID-19 vaccine. And we’ve our up to date model for the XBB. 1.5 pressure in market in the present day, all over the world.

We’ve got a singular and differentiated expertise platform with two key parts, our protein-based expertise, and our Matrix-M adjuvant. We’ll speak about that in a number of slides. And we’re quickly advancing our subsequent asset out of our pipeline, that is our mixture Flu/COVID vaccine, and anticipated launch in 2026. And we consider that positions our firm for important and memorable progress alternative. We’ll speak about that additionally in a number of slides.

Importantly, we have established a worldwide footprint. We’ve got manufacturing, business operations and strategic partnerships together with SK Bio, a number of the members of whom are within the viewers with us tonight. Respect your partnership SK Bio, Takeda and Serum Institute of India who helps us manufacture our product. This allows us to each commercialize and distribute our vaccines to folks all over the world.

And our tech platform, any vaccine firm on this planet would like to have both of these items of expertise. We’ve got each. We predict that makes what we do at Novavax very differentiated and really particular. We’ve got our nanoparticle protein-based vaccine expertise which delivers important efficiency traits within the vaccines we develop, together with excessive immunogenic and efficacious responses, fridge stability, and it is effectively suited importantly for the event of mixture vaccines. A key benefit we predict we’ve on the event facet.

Matrix-M is designed to spice up the immune system response and it additionally has a big dose sparing exercise, antigen sparing, which may be very useful as you develop vaccines, particularly while you’re placing quite a lot of completely different antigen in, in combos, trivalent, quadrivalent, and so forth., very useful.

Now we’re leveraging this expertise to advance our pipeline past a single product firm. You’ll be able to see up high on the pipeline slider our Coronavirus vaccine and our up to date pressure. Our high precedence transferring ahead is our mixture vaccine, Flu/COVID or CIC, as we name it for brief. So after I say CIC, I imply our combo vaccine that features our COVID, confirmed COVID vaccine, and our Flu vaccine the place we’ve constructive Part 3 information and excellent information from our most up-to-date Part 2 trial that we’ll share with you in the present day.

One other vaccine we’re very pleased with that we didn’t develop, however consists of our expertise and showcases the potential of our adjuvant is the Malaria Vaccine, R21, developed by a collaboration between Novavax, Oxford College and Serum Institute of India, utilizing our Matrix-M expertise. Actually, R21 was simply pre-qualified by the WHO final month. And you’ll see right here, famous as an important instrument by the WHO Director-Common with 75% efficacy leads to the Part 3 trial that exceeds present customary of care.

We talked earlier about 1,300 kids a day 1,300 sentient beings lives and experiences wasted each single day, 50, 60 youngsters a minute or extra dropping useless of malaria. Actually, by the top of this presentation, we’d have already misplaced many extra kids in Africa, and all of these deaths may be prevented. We’re pleased with our participation on this. We do get a low-single digit royalty on gross sales of this vaccine. I encourage all of you to go to Gavi’s web site, the place they point out projections of purchases of this vaccine, and intend to launch it this 12 months in Africa.

Let’s take a second and one slide to do a 12 months in overview. Speak about anniversaries. That is my one 12 months anniversary as CEO of Novavax. It was final 12 months this week, that Stan Erck, our prior CEO who stayed with the corporate for many years, and helped to convey that R21 vaccine to fruition, that is a giant a part of his legacy, stepped down from his function and the corporate invited me to tackle the problem of CEO and be a part of this wonderful government crew on this firm for this journey.

The first cause I got here was the expertise platform right here and the power to vary lives. This firm ought to be very profitable. We’ve got one thing particular right here and we may help change the world. And it is about mission.

Let’s speak about 12 months in overview. What did we obtain in ’23 that was essential? And clearly Novavax quickly expanded, as did different firms to tackle the worldwide pandemic. That meant hiring hundreds of individuals from an organization of roughly 100 to 2,500 or so, in a really quick time period, buying manufacturing functionality all over the world to hit what was considered doubtlessly an 8 billion dose market.

As COVID emerges into an endemic from a pandemic, it is essential to rescale the corporate, to scale back the scope and scale to match that chance and to guarantee that the money readily available that we’ve and the runway we’ve may help us convey these vaccines ahead and achieve success, steady and strong enterprise over time.

So the administration crew and I had been very decisive in 2023. We took speedy, considerate steps to considerably cut back our expense footprint and reshape this group to present us the most effective probability for fulfillment. That included the restructuring within the administration crew, creating new roles, new positions, and bringing in new executives from outdoors, placing folks in several roles the place we predict they will make an even bigger affect. It included in 2023, one out of 5 staff departing. We lowered by 20%, headcount.

It included knocking out $1 billion of present liabilities and lowering our OpEx by nearly as a lot. And we’re on monitor with SG&A by over 25% discount in ’23 and to hit over a 55% discount from this time final 12 months, this calendar 12 months in 2024 in bills and our overhead. We additionally streamlined the best way we manufacture the vaccine, our pressure choice course of, bringing a number of variants ahead directly. One of many challenges with our outstanding expertise is it does take about six months to make the vaccine as soon as you understand the pressure that you must goal.

Now if we had been notified in June about what the pressure was for COVID, we would not have a vaccine then out till November or December. So what did we do collectively in Novavax? We considered it. We are able to monitor the strains which are creating, and what we did was convey a number of trains ahead on the similar time, with a minimal affect to our P&L, which we will do within the lab, and convey to an preliminary stage for business scale and growth. That allowed us to have the fitting pressure in our arms on the proper time, and be available on the market concurrently the mRNAs.

We additionally delivered then on all of our APA commitments all over the world and nonetheless have substantial APAs remaining for the subsequent two years. And we gained important expertise within the U.S. market because it transformed for the primary time to a business alternative. And really importantly, we outlined a quicker path pulling ahead by a few 12 months on our preliminary estimates, our mixture vaccine, ought to we reach that medical program.

Fairly a outstanding 12 months. Fairly a journey for the administration crew very thrilling, and at occasions very difficult, however we did it and we achieved what we needed to in 2023 to set us up for a profitable ’24-’25 and even a brighter future past. So let’s check out the subsequent couple of chapters of Novavax’s future. Chapter two, then we must always take into consideration as the subsequent two COVID seasons. We ought to be a standalone COVID firm in 2024 and 2025, and may have the ability to launch our combo vaccine in 2026.

So how will we drive additional efficiency and success for Novavax within the subsequent two seasons? Within the U.S. market because it transformed to business, we have discovered quite a bit, and we’re enhancing our product place and presentation. So on the left facet of the slide, you see the important thing attributes to a profitable product launch within the U.S. market beginning with product presentation. In ’23, we had a 5 dose vial, not very best. Our rivals had a pre-filled syringe. We intend on having a single dose presentation within the type of a pre-filled syringe in 2024 placing us on an excellent enjoying discipline there.

Secondly, we had been licensed by FDA and improved our relationship with FDA, to turn into an impressive accomplice and convey our vaccine ahead, however at present below an emergency use authorization. As a few of you might or might not know that forestalls an organization from doing a full advertising or promotional marketing campaign about their vaccine. And albeit, we may speak about Novavax throughout the 12 months, however not about our vaccine. Not till we had been licensed below an EUA in October, after the season had already began. We intend to be on license below a BLA in 2024, opening that up for our crew to speak and market appropriately, and be on an excellent enjoying discipline with the competitors.

Our label is increasing to incorporate the subsequent age cohort. That is what we’re looking for is six plus as a substitute of 12 plus, which helps us with vaccine for kids’s program and to be extra aggressive within the market. And an earlier approval is what we’re anticipating as a substitute of October, September or earlier. Importantly, for those who ask somebody who Novavax was or what they did, this time final 12 months, for those who weren’t straight within the trade, you would not typically get an, I do know. They could even confuse us with a part of SpaceX or another person. What’s Novavax? Proper, very low consciousness ranges within the U.S. We had been identified all over the world elsewhere, the place we bought in by means of our APAs, however probably not within the U.S. market, to not a excessive degree.

By mid-year, John Trizzino and his crew had been in a position to drive our consciousness to about 46% aided consciousness with healthcare suppliers. And as I stand right here in the present day, in January ’24, we’re 80% consciousness with healthcare suppliers, and what we’ve accomplished is made ourselves conscious, and healthcare companions/suppliers conscious of our expertise, who we’re and what we’ve to supply.

And eventually, market entry. We weren’t fairly on an equal footing in all retail chains, not essentially on all of the schedulers and the each day workflow this 12 months, or in each retail outlet. We had been in lots of, however not all. That is altering. We have been working with retailers already and deploying our forces extra towards retail. Everybody anticipated the COVID market to be roughly a 60:40 or 70:30 break up between retail and non-retail or IDN and healthcare supplier places of work. That mimics flu.

It was stunning to see effectively over 90% of all COVID doses administered by means of retail, nearly zero by means of non-retail channel. So we’ll redeploy and entry retail. We have already engaged with them in This autumn to make a greater 2024. So the long run seems to be brilliant for the subsequent two years within the U.S.

After which let’s speak about what subsequent, chapter three. So we’ve two extra seasons to drive outcomes, two extra seasons to construct consciousness, construct market share and turn into a family identify. Why are we enthusiastic about 2026 and past? Before everything, the market is migrating towards a want for mixture respiratory vaccines which are seasonal within the fall, particularly flu and COVID mixture. Our market analysis reveals that there is a excessive demand for that mixture. And that the illustrative on the fitting is that pie chart. It isn’t — we’re not sharing our information particularly for aggressive causes, however effectively past half of the market is anticipated to transform to mixture.

Now COVID isn’t at its peak the place it was within the pandemic. We’re anticipating 30 million to 35 million doses within the U.S. market this 12 months. However flu historically your rolling four-year common is 130 million to 140 million doses in the USA. We have got an impressive flu vaccine candidate, constructive Part 3 information, after which a revised model constructive Part 2 information you will see in a second on a slide right here that we get to introduce within the type of a mixture which goes to be extremely desired.

So if all of us agree that mixture vaccine is most probably the wave of the long run, what about Novavax? Are we positioned to get our honest piece of that? We consider we’re effectively positioned to take action for a number of causes. Our expertise platform. We get to leverage a confirmed COVID vaccine, our trivalent, on this case, influenza vaccine with constructive Part 3 information constructive Part 2 information and Matrix-M adjuvant.

Secondly, there is a sturdy desire right here. That is our inner information. However 25% to 30% of healthcare professionals surveyed truly choose a protein-based possibility within the type of a mixture. We would be the solely firm from what we will see, who would have that available on the market in 2026, as a substitute for mRNA vaccines. And I talked about our rising consciousness degree. Folks know who we’re, they usually’re beginning to study concerning the worth of our expertise platform.

What else? We talked about our information. That is from our mixture part mixture vaccine Part 2 examine, you’ll be able to see abstract observations. Very importantly, for those who look down on the backside left, that final bullet, HAI metric imply ratio consistent with a licensure standards. So we’re hitting ratios on key metrics that meet the requirements for regulatory approval. That is crucial and inspiring information in our Part 2, and also you check out our flu. Second bullet, HAI responses, 31% to 56%, greater for all pressure 4 pressure examine, in comparison with FLUAD, 44% to 89% greater for A strains in comparison with Fluzone excessive dose. It is spectacular information. It is thrilling information for us, and it encourages us to maintain transferring ahead and convey our vaccine forth.

And the corporate is healthier positioned now after what we have completed in 2023 to convey that ahead independently. After I first joined the thought was we would want to have a accomplice to assist finance that program. However based mostly on the numerous enhancements we have made, on our P&L, on our steadiness sheet, on our money place, and our focus and power as a tradition and an organization, we’re in a position to convey that ahead and we’ll be initiating a Part 3 registration trial for the product. Our plan is to try this second half of this 12 months, with a possible launch in 2026.

This subsequent slide, R&D and SG&A expense steering that we have supplied is simply for example the numerous discount in our price footprint that we have executed, and plan to execute in ’23 and ’24. Once more final 12 months, after I first joined the corporate, $1.7 billion was our SG&A and R&D footprint in 2022. We took that down in ’23. We are literally $100 million forward of our acknowledged targets for the 2023 price reductions. And really importantly the crew than I did so with out hurting our capabilities to determine the suitable pressure, develop the vaccine and get photographs in arms. That is what we do. That is the heartbeat of Novavax.

So we took that as a key filter on any choice that we made. We had been in a position to make these reductions, and now we’re focusing on beneath $750 million, over a 55% discount in the place we began. Very importantly, final bullet on the underside left. This consists of prioritizing enhancements to the long run provide chain effectivity. And that features the contemplation of promoting our manufacturing facility within the Czech Republic, which if we’re profitable doing so would give us a big amount of money upfront and in addition cut back working bills considerably on a go-forward foundation annually.

So in abstract, we have made quite a lot of progress in 2023. We’re not all the best way the place we wish to be at as an organization, however important step ahead to arrange a greater and stronger basis for 2024 ahead in these subsequent two chapters I talked to you about. We created a extra lean and targeted group, restructured the administration crew, considerably lowered our bills and took out quite a lot of overhangs and take and pay contracts, both renegotiated, pull ahead money from APAs and different issues to usher in non-dilutive capital for the corporate over the course of the 12 months. We advanced our company tradition to be lean and targeted on the duty at hand.

We’re effectively positioned to advance the pipeline and concentrate on our CIC or mixture program. We recognized a quicker pathway ahead, and we’ll be talking with FDA within the close to time period to get that licensed, and plan on assuming approval there kicking off that trial second half of this 12 months, and might achieve this independently. We hope to launch that vaccine in 2026. And it’s actually a big market, plenty of potential.

So once more, our mission won’t ever relaxation in our quest to guard the well being of individuals in every single place. Our staff consider in our expertise. We’re pleased with what we’ve to supply. We actually cannot wait to see how that Matrix-M based mostly R21 vaccine can work in Africa to save lots of these harmless kids’s lives and provides them a future that they deserve. And that is what this in the long run is all about.

So thanks very a lot in your time in the present day. I would wish to welcome the members of our government crew as much as the stage right here to assist me tackle your questions. Thanks.

Query-and-Reply Session

Q – Eric Joseph

All proper. Properly, thanks, John. Simply by the use of beginning out the Q&A session, increasing model consciousness, product consciousness is clearly one of many aims right here together with your COVID vaccine. I am curious to know, form of the place are you might be in that consciousness growth effort and a number of the suggestions that you’re getting and the forms of messaging that appears to resonate, and type of result in your product being the vaccine of selection, recognizing that, along with consciousness, there’s figuring out the product, but in addition having to pick it over some competing choices.

John Jacobs

John T, you wish to deal with that?

John Trizzino

Yeah, certain. Thanks, Eric. So I feel it is essential to know the historical past of the place we’re in the present day. And so it is not merely only a information time limit, but it surely’s all the experiences that we undertook throughout the pandemic interval, the event of our vaccine program, the spectacular outcomes we had throughout our medical trials, after which advancing into the post-pandemic interval, through which we demonstrated and communicated to most of the people, our capability to fabricate the product, our capability to go from the unique Wuhan pressure to the up to date pressure, XBB.

That is how we entered the market this 12 months and communicated that to your complete funding group, the buyer group, the distribution group to turn into conscious of what our capabilities had been as a company. We took that pressure become emergency use authorization. We then had entry into a big share of all the vaccinating pharmacy, some 70% of vaccinating pharmacies had been stocking our product. After which we created total consciousness within the shopper group. However we’re somewhat bit hamstrung by a number of the issues that John talked about in his presentation.

So what are we doing about that, proper? I feel as we look ahead to ’24, it is clear that we have to have a BLA-licensed product. It is clear that we should be in a pre-filled syringe. It is clear that we should be early to market proper. We should be there when ACIP makes a suggestion and a season initiates that we’re in-market and accessible. In fact, what which means is {that a} communication schooling marketing campaign to healthcare suppliers in addition to to shoppers, after which coordination with the CDC, by means of our coverage groups and authorities affairs groups to guarantee that all these initiatives are being successfully communicated all through your complete market.

So the teachings discovered in ’23, the seeding of {the marketplace} that happened throughout the pandemic is de facto going to set the stage effectively for the ’24 season.

John Jacobs

Thanks, John.

Eric Joseph

You are offering up to date steering on the OpEx facet, John right here in the present day, and I recognize that is actually a spotlight for the enterprise. On the highest line facet. I assume, are you in a spot to form of information or yeah, I assume present somewhat little bit of an outlook. It is actually it is laborious to do within the business setting proper now within the U.S. We’re type of certain proper now, type of early days and clearly it is type of a delayed COVID season in the mean time, however there’s additionally nonetheless a good quantity of APA maybe associated income that may maybe pull by means of. So I assume, is there some part of the highest line that may be form of forecast as a base case right here?

John Jacobs

Jim Kelly, would you wish to deal with that? I feel we will touch upon that dedicated APA contracts that stay over the subsequent two years.

James Kelly

Hey, actually. Whenever you take a look at the best way we’ve offered our firm in the present day, I feel core to our story is that we absolutely remodeled the dimensions and scope of this firm from a pandemic period firm to 1 that’s much more lean, targeted and ready to compete within the aggressive business market.

The OpEx replace that we share with you in the present day, the steering, it is actually a repeat of what we mentioned on our Q3 name, specifically that from 2022, as in comparison with the place we’re about to go in 2024, we’re lowering our working expense, R&D plus SG&A, by nearly a $1 billion, over 55%. And we have accomplished so by sustaining the essential capabilities, we have to advance each our business capabilities and in addition advance our pipeline, specifically CIC. In order that’s of key significance.

One of many issues as we transfer ahead, which is important, is monetary stability. And after we take a look at our pathway to monetary stability, as we construct these new business markets, and advance our mixture CIC program, some essential factors I simply wish to re-emphasize from our Q3 name. We see a pathway to roughly $2 billion in income and money. And I am going to let you know precisely what I imply. At 9/30, we had $960 million in money, receivables and in addition an anticipated cost from Canada that we’re actually ready on A day now, now that we have delivered that APA doses in December.

Along with that $960 million, and trying to the complete season steering midpoint of $1.3 billion, we had a remaining $600 million excellent. That is just about all $500 million of the $600 million absolutely government-based throughout the completion of Operation Warp Pace plus delivering upon these APAs you talked about. Then while you look previous this season, one other $750 million in dedicated APAs by means of 2024 and 2025.

So in whole, you get to about $2.3 billion, adjusted for upfront, it is about $2 billion. And it is an essential part of, I am going to name it, foundational money and future income that when coupled with the price containment, specifically getting R&D and SG&A beneath $750, units the stage to have the ability to construct out these essential business markets just like the U.S., like what we’re looking for to do in Europe, after which choose nice alternatives which have come our manner, like in Korea. And as we glance to work doubtlessly with UNICEF, in a number of the low and center earnings nations by means of their RFP course of.

So these are going to be upside to what we have simply described. So hopefully that offers you somewhat little bit of perspective of what lies forward.

Eric Joseph

On the OpEx facet, appears effectively — was going to ask whether or not — possibly, maybe unpack somewhat bit the place you are getting somewhat extra — the place you are seeing efficiencies, I assume, on the spend facet of issues, however actually I type of wish to dig in somewhat bit extra on manufacturing capabilities. Simply taking a look at your slide right here the place that presumably a sale of your Czech Republic manufacturing facility could be on the desk, suggesting that maybe type of constructing out your inner manufacturing functionality is not essentially a precedence going ahead right here.

Is that the understanding that traders ought to type of carry going ahead? And is it actually the Serum Institute we must always consider as the first provider of antigen or vaccine product for each COVID and for CIC?

John Jacobs

So maybe I can break this into two items. I am going to take one and John might have you ever take this provide piece?

John Trizzino

Sure, thanks.

John Jacobs

One of many items that you just’re asking is a assist us perceive this enchancment in your price construction as you drive R&D and SG&A beneath $750 million. And what we shared in November was that we’re ready to take motion with urgency and the expectation you traders ought to have is that, within the very close to future, we’ll come again to you with some extra specifics round precisely how we’ll additional drive down that price construction.

So we obtained an earnings name, for instance developing in two months. It is our expectation to supply extra detailed steering. You need to count on both there or previous to that, further suggestions on extra specifics round it. And it is essential as a result of it is not simply to say, oh, your price construction is decrease. What’s important is the place are you investing? How are you driving efficiency? So we wish to mix these two collectively. All proper. So keep tuned for close to time period suggestions. After which John, maybe you’ll take that…

John Trizzino

Yeah, I feel what’s essential to know is, first, we have got two world class amenities, proper, each the CRM facility and the CZ facility. Each have simply accomplished an incredible job throughout our progress cycle right here. And these are the amenities that make protected, efficient biologics, difficult biologics. So that you get to a degree the place you say, effectively, what’s the international vaccine market and what it was throughout the pandemic isn’t what it’s throughout the business interval. So these numbers have modified fairly dramatically.

As we noticed initially of the ’23 season, we had over 100 million doses of anticipated demand within the market. That modified right down to 70 million. After which it modified right down to 50 million, after which proper now, on the finish of December, based mostly upon IQVIA information, we’re seeing one thing like, 28 million doses going by means of the retail channel. So based mostly upon that, we’ve to change our provide fashions. And naturally, that meant that we did not want the capability of these two amenities and needed to make a really troublesome choice about the place to focus our time and a spotlight, no less than within the quick time period.

So I feel this can be a market-driven choice. It is a price efficiency-driven choice. And clearly, it is steeped in international market demand and provide.

John Jacobs

And really importantly, within the construct out of our CZ facility within the Czech Republic, Eric, we constructed over time, a regulatory capability in Europe, that is a important Heart of Excellence for us there and in addition a crew that does the assays and testing in-country and people forms of issues. So these forms of capabilities are important to us transferring ahead as we compete for tenders. And we will hold that experience on European soil as a part of Novavax, even when we promote the CZ facility and different staff that might go together with that, proper, would go together with it.

James Kelly

Essential, Eric that is one thing we’re exploring, any definitive choice could be pending.

Eric Joseph

Thanks. Go forward.

Unidentified Analyst

Yeah, thanks very a lot. My identify is Holland from CanAp [ph]. You’ve a gem in your portfolio with the Matrix adjuvant sequence. And as you understand higher than anyone, most competing merchandise, like a number of the traits, and there is a large shortage. So they’re, I assume there is a enterprise growth alternative on the Matrix facet, for Novavax. May you allude somewhat bit to that, please?

John Jacobs

Properly, I am going to ask Filip so as to add somewhat further shade and context, however throughout the course of ’23, we signed an settlement with the Invoice and Melinda Gates Basis to discover a number of early stage packages utilizing our Matrix. And there are a number of collaborations all over the world, Filip, with universities and nations all over the world utilizing Matrix, and possibly you need so as to add somewhat further context there.

Filip Dubovsky

Positive. You are proper. I imply, the adjuvant has some very distinctive traits. And we actually cut back it to follow, each with licensure of the COVID vaccine, in addition to with R21, the malaria vaccine. It does some fairly neat issues, proper? So it generates these very broad neutralizing immune responses and these very, very lengthy lived CD4 polyfunctional responses. And also you’re proper there’s a possibility there globally to have expanded use of the adjuvant.

Now many individuals do not know, as an illustration, that we’ve a really, very small veterinary enterprise that makes use of our Matrix adjuvant in Europe. And we’ve a number of collaborations with each educational authorities in addition to business organizations exploring the usage of our adjuvant with their antigens. This one function that I feel John touched on was that this can be a dose sparing adjuvant. And which means for firms which have both troublesome to provide or costly to provide antigens, there could also be an actual profit to utilizing their adjuvant to make their price of products decrease and actual to increase efficacy.

I imply, the breadth of immune response that we’re in a position to induce is kind of outstanding. And we noticed this with the completely different strains for COVID in addition to was completely different flu strains in our Part 3 work. So you’ll be able to count on these varieties of advantages to be dropped at further antigens. And we do have an important effort that is being led by Elaine to search out different companions and get further worth out of the adjuvant.

John Jacobs

Yeah, and that is why after I joined I created the Chief Technique Officer function at Novavax and introduced in Elaine O’Hara, who has years of expertise in vaccines, got here out of Sanofi-Aventis, was main business for North America for Sanofi-Aventis Vaccines. So Elaine brings years of expertise to the desk and we actually refocused your complete R&D store. And there are quite a lot of exploratory work getting accomplished in-house, actually channeled down our focus to what’s completely important subsequent for Novavax, to pay attention our sources on getting it proper with our present COVID vaccine after which bringing ahead as shortly as doable the mixture, whereas exploring partnering and out licensing alternatives for parts of our expertise or property that would not be close to time period worth to Novavax.

So Elaine’s on the best way with that effort. The BMGF deal was a kind of examples. There’s many extra that we intend to be exploring, as we enter ’24 and past.

Filip Dubovsky

I assume there’s only one other thing so as to add, and possibly that is barely self aggrandizing. However we have continued to develop the Matrix expertise. And I feel that we’re planning within the close to future to share with the world a number of the methods we have taken it. I feel folks will likely be comparatively shocked in what Matrix can do, and the way it can enhance the response of assorted variety of vaccines.

John Jacobs

Coming quickly to a presentation close to you.

Filip Dubovsky

After the patents have all been squared away.

Eric Joseph

Perhaps only a final query on the CIC program. John, you’ve got type of laid out an expectation of maybe being in market in 2026. Are you able to simply form of stroll backward from that that kind of examine that might allow approval and commercialization, whether or not it is photos, [indiscernible] efficacy-based?

John Jacobs

And we nonetheless clearly have to talk with FDA to get that finalized, however I am going to let Filip add some shade and context and what we will share.

Filip Dubovsky

Yeah, and the plan is below overview with the FDA, and we’re in for finalization of that to go ahead. However we have seen our rivals transfer ahead, an accelerated approval pathway. And positively, it is one which we have additionally achieved with our earlier standalone influenza vaccine. So we perceive that pathway comparatively effectively. So the actual query in entrance of the FDA, is the cohort [ph] materials which we have now generated, is it of satisfactory high quality to be taken into Part 3 examine, are the assays we’re proposing and the endpoints we’re proposing acceptable for accelerated approval pathway?

And these research are comparatively quick. We’re trying to do the examine within the second half of this 12 months. It’s typically the research are accomplished within the offseason, which might indicate southern hemisphere examine with Northern hemisphere strains. And that might permit us to do a submitting in 2025 with approval, approval in ’26. There are clearly post-market commitments that go together with that to do a medical efficacy examine within the out years.

Eric Joseph

Yeah, time for yet one more within the again right here.

Unidentified Analyst

Hello, sorry. I am simply needed to ask for those who may give a number of extra specs on the CZ facility by way of what it produces, its capabilities? Is it like all biologics, any explicit — like something that could be on the market that is already disclosed?

John Jacobs

Filip, Jim you guys wish to touch upon that?

Filip Dubovsky

Yeah, I am unsure that we’ve the fitting folks right here to touch upon the specifics of that facility. It has been utilized by different firms beforehand to develop different vaccines, it is able to cell tradition that we use for our again of our system.

James Kelly

What I’ll say is true now it is targeted on completely producing our present COVID vaccine.

Filip Dubovsky

We’ll be comfortable to ahead you all of the technical specs, however there’s three 6,000 liter stainless-steel bioreactors on the facility. It is a full entrance to again biologic manufacturing facility.

John Jacobs

It could possibly be re engineered to do many various issues, would take somewhat little bit of funding and time and focus. Proper now it is geared to provide our COVID vaccine.

Eric Joseph

All proper, effectively, thanks.

John Jacobs

Thanks Eric. Thanks, everybody for becoming a member of us this late. Thanks.