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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 20222023
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File No. 000-26770
NOVAVAX, INC.
(Exact name of registrant as specified in its charter)
Delaware22-2816046
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
21 Firstfield Road
GaithersburgMD20878
(Address of principal executive offices)(Zip code)
(240) 268-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange on which registered
Common Stock, Par Value $0.01 per shareNVAXThe Nasdaq Global Select Market
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated Filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
The number of shares outstanding of the Registrant's Common Stock, $0.01 par value, was 78,134,59586,305,085 as of April 30, 2022.2023.


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NOVAVAX, INC.
TABLE OF CONTENTS
Page No.

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PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements
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NOVAVAX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
(unaudited)
For the Three Months Ended
March 31,
For the Three Months Ended
March 31,
2022202120232022
Revenue:Revenue:Revenue:
Product salesProduct sales$585,628 $— Product sales$(7,457)$585,628 
GrantsGrants99,301 446,893 Grants87,379 99,301 
Royalties and otherRoyalties and other19,042 336 Royalties and other1,029 19,042 
Total revenueTotal revenue703,971 447,229 Total revenue80,951 703,971 
Expenses:Expenses:Expenses:
Cost of salesCost of sales15,204 — Cost of sales34,086 15,204 
Research and developmentResearch and development383,483 592,671 Research and development247,101 383,483 
Selling, general, and administrativeSelling, general, and administrative95,992 63,190 Selling, general, and administrative112,532 95,992 
Total expensesTotal expenses494,679 655,861 Total expenses393,719 494,679 
Income (loss) from operations209,292 (208,632)
Income (Loss) from operationsIncome (Loss) from operations(312,768)209,292 
Other income (expense):Other income (expense):Other income (expense):
Interest expenseInterest expense(4,876)(4,839)Interest expense(4,316)(4,876)
Other income (expense)1,654 (6,231)
Income (loss) before income tax expense206,070 (219,702)
Other incomeOther income24,362 1,654 
Income (Loss) before income tax expenseIncome (Loss) before income tax expense(292,722)206,070 
Income tax expenseIncome tax expense2,662 3,017 Income tax expense1,183 2,662 
Net income (loss)Net income (loss)$203,408 $(222,719)Net income (loss)$(293,905)$203,408 
Net income (loss) per share:Net income (loss) per share:Net income (loss) per share:
BasicBasic$2.66 $(3.05)Basic$(3.41)$2.66 
DilutedDiluted$2.56 $(3.05)Diluted$(3.41)$2.56 
Weighted average number of common shares outstandingWeighted average number of common shares outstandingWeighted average number of common shares outstanding
BasicBasic76,457 73,035 Basic86,158 76,457 
DilutedDiluted80,711 73,035 Diluted86,158 80,711 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
For the Three Months Ended
March 31,
For the Three Months Ended
March 31,
2022202120232022
Net income (loss)Net income (loss)$203,408 $(222,719)Net income (loss)$(293,905)$203,408 
Other comprehensive income (loss):
Net unrealized losses on marketable securities available-for-sale, net of reclassifications— (9)
Other comprehensive income:Other comprehensive income:
Foreign currency translation adjustmentForeign currency translation adjustment41 (7,372)Foreign currency translation adjustment3,211 41 
Other comprehensive income (loss)41 (7,381)
Other comprehensive incomeOther comprehensive income3,211 41 
Comprehensive income (loss)Comprehensive income (loss)$203,449 $(230,100)Comprehensive income (loss)$(290,694)$203,449 
The accompanying notes are an integral part of these financial statements.
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NOVAVAX, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share information)
March 31,
2022
December 31,
2021
March 31,
2023
December 31,
2022
(unaudited)(unaudited)
ASSETSASSETSASSETS
Current assets:Current assets:Current assets:
Cash and cash equivalentsCash and cash equivalents$1,570,954 $1,515,116 Cash and cash equivalents$624,950 $1,336,883 
Restricted cashRestricted cash11,492 11,490 Restricted cash10,330 10,303 
Accounts receivableAccounts receivable478,156 454,993 Accounts receivable112,849 82,375 
InventoryInventory106,648 8,872 Inventory34,185 36,683 
Prepaid expenses and other current assetsPrepaid expenses and other current assets180,155 164,648 Prepaid expenses and other current assets188,714 237,147 
Total current assetsTotal current assets2,347,405 2,155,119 Total current assets971,028 1,703,391 
Property and equipment, netProperty and equipment, net247,213 228,696 Property and equipment, net307,414 294,247 
Right of use asset, netRight of use asset, net86,352 40,123 Right of use asset, net103,923 106,241 
Intangible assets, net4,535 4,770 
GoodwillGoodwill130,756 131,479 Goodwill129,827 126,331 
Other non-current assetsOther non-current assets18,614 16,566 Other non-current assets30,507 28,469 
Total assetsTotal assets$2,834,875 $2,576,753 Total assets$1,542,699 $2,258,679 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
LIABILITIES AND STOCKHOLDERS’ DEFICITLIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:Current liabilities:Current liabilities:
Accounts payableAccounts payable$135,128 $127,050 Accounts payable$124,801 $216,517 
Accrued expensesAccrued expenses559,876 673,731 Accrued expenses518,706 591,158 
Deferred revenueDeferred revenue1,094,232 1,422,944 Deferred revenue415,764 370,137 
Current portion of finance lease liabilitiesCurrent portion of finance lease liabilities116,684 130,533 Current portion of finance lease liabilities1,205 27,196 
Convertible notes payableConvertible notes payable323,814 — Convertible notes payable— 324,881 
Other current liabilitiesOther current liabilities31,271 36,061 Other current liabilities858,382 930,055 
Total current liabilitiesTotal current liabilities2,261,005 2,390,319 Total current liabilities1,918,858 2,459,944 
Deferred revenueDeferred revenue441,748 172,528 Deferred revenue274,062 179,414 
Convertible notes payableConvertible notes payable— 323,458 Convertible notes payable166,857 166,466 
Non-current finance lease liabilitiesNon-current finance lease liabilities30,993 31,238 
Other non-current liabilitiesOther non-current liabilities66,798 42,121 Other non-current liabilities47,511 55,695 
Total liabilitiesTotal liabilities2,769,551 2,928,426 Total liabilities2,438,281 2,892,757 
Commitments and contingencies (Note 15)Commitments and contingencies (Note 15)00Commitments and contingencies (Note 15)
Preferred stock, $0.01 par value, 2,000,000 shares authorized at March 31, 2023 and December 31, 2022; no shares issued and outstanding at March 31, 2023 and December 31, 2022.Preferred stock, $0.01 par value, 2,000,000 shares authorized at March 31, 2023 and December 31, 2022; no shares issued and outstanding at March 31, 2023 and December 31, 2022.— — 
Stockholders' equity (deficit):
Common stock, $0.01 par value, 600,000,000 shares authorized at March 31, 2022 and December 31, 2021; and 78,722,337 shares issued and 78,122,978 shares outstanding at March 31, 2022 and 76,433,151 shares issued and 75,841,171 shares outstanding at December 31, 2021787 764 
Stockholders' deficit:Stockholders' deficit:
Common stock, $0.01 par value, 600,000,000 shares authorized at March 31, 2023 and December 31, 2022; 87,139,831 shares issued and 86,291,473 shares outstanding at March 31, 2023 and 86,806,554 shares issued and 86,039,923 shares outstanding at December 31, 2022Common stock, $0.01 par value, 600,000,000 shares authorized at March 31, 2023 and December 31, 2022; 87,139,831 shares issued and 86,291,473 shares outstanding at March 31, 2023 and 86,806,554 shares issued and 86,039,923 shares outstanding at December 31, 2022871 868 
Additional paid-in capitalAdditional paid-in capital3,566,292 3,351,967 Additional paid-in capital3,767,733 3,737,979 
Accumulated deficitAccumulated deficit(3,414,542)(3,617,950)Accumulated deficit(4,569,794)(4,275,889)
Treasury stock, cost basis, 599,359 shares at March 31, 2022 and 591,980 shares at December 31, 2021(85,901)(85,101)
Treasury stock, cost basis, 848,358 shares at March 31, 2023 and 766,631 shares at December 31, 2022Treasury stock, cost basis, 848,358 shares at March 31, 2023 and 766,631 shares at December 31, 2022(91,226)(90,659)
Accumulated other comprehensive lossAccumulated other comprehensive loss(1,312)(1,353)Accumulated other comprehensive loss(3,166)(6,377)
Total stockholders’ equity (deficit)65,324 (351,673)
Total liabilities and stockholders’ equity (deficit)$2,834,875 $2,576,753 
Total stockholders’ deficitTotal stockholders’ deficit(895,582)(634,078)
Total liabilities and stockholders’ deficitTotal liabilities and stockholders’ deficit$1,542,699 $2,258,679 
The accompanying notes are an integral part of these financial statements.
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NOVAVAX, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
Three Months Ended March 31, 20222023 and 20212022
(in thousands, except share information)
(unaudited)
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Treasury
Stock
Accumulated Other
Comprehensive
Income (Loss)
Total Stockholders'
Equity (Deficit)
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Treasury
Stock
Accumulated Other
Comprehensive
Loss
Total Stockholders'
Equity (Deficit)
SharesAmount
Balance at December 31, 2022Balance at December 31, 202286,806,554 $868 $3,737,979 $(4,275,889)$(90,659)$(6,377)$(634,078)
Stock-based compensationStock-based compensation— — 28,647 — — — 28,647 
Stock issued under incentive programsStock issued under incentive programs333,277 1,107 — (567)— 543 
Foreign currency translation adjustmentForeign currency translation adjustment— — — — — 3,211 3,211 
Net lossNet loss— — — (293,905)— — (293,905)
Balance at March 31, 2023Balance at March 31, 202387,139,831 $871 $3,767,733 $(4,569,794)$(91,226)$(3,166)$(895,582)
SharesAmountAdditional
Paid-in
Capital
Accumulated
Deficit
Treasury
Stock
Accumulated Other
Comprehensive
Income (Loss)
Total Stockholders'
Equity (Deficit)
Balance at December 31, 2021Balance at December 31, 202176,433,151 $764 Balance at December 31, 202176,433,151 $764 $3,351,967 $(3,617,950)$(85,101)$(1,353)$(351,673)
Stock-based compensationStock-based compensation— — 32,933 — — — 32,933 Stock-based compensation— — 32,933 — — — 32,933 
Stock issued under incentive programsStock issued under incentive programs91,788 2,029 — (800)— 1,230 Stock issued under incentive programs91,788 2,029 — (800)— 1,230 
Issuance of common stock, net of issuance costs of $2,311Issuance of common stock, net of issuance costs of $2,3112,197,398 22 179,363 — — — 179,385 Issuance of common stock, net of issuance costs of $2,3112,197,398 22 179,363 — — — 179,385 
Foreign currency translation adjustmentForeign currency translation adjustment— — — — — 41 41 Foreign currency translation adjustment— — — — — 41 41 
Net incomeNet income— — — 203,408 — 203,408 Net income— — — 203,408 — — 203,408 
Balance at March 31, 2022Balance at March 31, 202278,722,337 $787 $3,566,292 $(3,414,542)$(85,901)$(1,312)$65,324 Balance at March 31, 202278,722,337 $787 $3,566,292 $(3,414,542)$(85,901)$(1,312)$65,324 
Balance at December 31, 202071,350,365 $714 $2,535,476 $(1,874,199)$(41,806)$7,024 $627,209 
Stock-based compensation— — 53,060 — — — 53,060 
Stock issued under incentive programs541,251 26,745 — (2,651)— 24,099 
Issuance of common stock, net of issuance costs of $7,2922,578,967 26 564,833 — — — 564,859 
Unrealized loss on marketable securities— — — — — (9)(9)
Foreign currency translation adjustment— — — — — (7,372)(7,372)
Net loss— — — (222,719)— — (222,719)
Balance at March 31, 202174,470,583 $745 $3,180,114 $(2,096,918)$(44,457)$(357)$1,039,127 
The accompanying notes are an integral part of these financial statements.

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NOVAVAX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended March 31,Three Months Ended March 31,
2022202120232022
Operating Activities:Operating Activities:Operating Activities:
Net income (loss)Net income (loss)$203,408 $(222,719)Net income (loss)$(293,905)$203,408 
Reconciliation of net income (loss) to net cash provided by (used in) operating activities:Reconciliation of net income (loss) to net cash provided by (used in) operating activities:Reconciliation of net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortizationDepreciation and amortization6,765 2,317 Depreciation and amortization9,043 6,765 
Non-cash stock-based compensationNon-cash stock-based compensation32,933 53,060 Non-cash stock-based compensation28,647 32,933 
Right-of-use assets expensed214 951 
Provision for excess and obsolete inventoryProvision for excess and obsolete inventory12,490 — 
Right-of-use assets expensed, net of credits receivedRight-of-use assets expensed, net of credits received— 214 
Other items, netOther items, net634 6,362 Other items, net(1,252)634 
Changes in operating assets and liabilities:Changes in operating assets and liabilities:Changes in operating assets and liabilities:
InventoryInventory(99,557)— Inventory(9,222)(99,557)
Receivables, prepaid expenses, and other assets(56,016)220,205 
Accounts payable and accrued expenses(115,500)53,325 
Accounts receivable, prepaid expenses, and other assetsAccounts receivable, prepaid expenses, and other assets18,430 (56,016)
Accounts payable, accrued expenses, and other liabilitiesAccounts payable, accrued expenses, and other liabilities(230,099)(115,500)
Deferred revenueDeferred revenue(61,391)549,584 Deferred revenue140,275 (61,391)
Net cash provided by (used in) operating activities(88,510)663,085 
Net cash used in operating activitiesNet cash used in operating activities(325,593)(88,510)
Investing Activities:Investing Activities:Investing Activities:
Capital expendituresCapital expenditures(16,826)(13,781)Capital expenditures(19,801)(16,826)
Purchases of marketable securities— (2,167)
Proceeds from maturities and sale of marketable securities— 157,557 
Net cash provided by (used in) investing activities(16,826)141,609 
Internal-use softwareInternal-use software(3,757)— 
Net cash used in investing activitiesNet cash used in investing activities(23,558)(16,826)
Financing Activities:Financing Activities:Financing Activities:
Net proceeds from sales of common stockNet proceeds from sales of common stock179,385 564,859 Net proceeds from sales of common stock— 179,385 
Net proceeds from the exercise of stock-based awardsNet proceeds from the exercise of stock-based awards1,318 24,099 Net proceeds from the exercise of stock-based awards543 1,318 
Finance lease paymentsFinance lease payments(20,838)(11,971)Finance lease payments(26,331)(20,838)
Net cash provided by financing activities159,865 576,987 
Repayment of 2023 Convertible notesRepayment of 2023 Convertible notes(325,000)— 
Payments of costs related to issuance of 2027 Convertible notesPayments of costs related to issuance of 2027 Convertible notes(3,591)— 
Net cash provided by (used in) financing activitiesNet cash provided by (used in) financing activities(354,379)159,865 
Effect of exchange rate on cash, cash equivalents, and restricted cashEffect of exchange rate on cash, cash equivalents, and restricted cash1,312 (1,349)Effect of exchange rate on cash, cash equivalents, and restricted cash(8,372)1,312 
Net increase in cash, cash equivalents, and restricted cash55,841 1,380,332 
Net increase (decrease) in cash, cash equivalents, and restricted cashNet increase (decrease) in cash, cash equivalents, and restricted cash(711,902)55,841 
Cash, cash equivalents, and restricted cash at beginning of periodCash, cash equivalents, and restricted cash at beginning of period1,528,259 648,738 Cash, cash equivalents, and restricted cash at beginning of period1,348,845 1,528,259 
Cash, cash equivalents, and restricted cash at end of periodCash, cash equivalents, and restricted cash at end of period$1,584,100 $2,029,070 Cash, cash equivalents, and restricted cash at end of period$636,943 $1,584,100 
Supplemental disclosure of non-cash activities:Supplemental disclosure of non-cash activities:Supplemental disclosure of non-cash activities:
Right-of-use assets from new lease agreementsRight-of-use assets from new lease agreements$58,352 $9,770 Right-of-use assets from new lease agreements$— $58,352 
Capital expenditures included in accounts payable and accrued expensesCapital expenditures included in accounts payable and accrued expenses$15,874 $9,076 Capital expenditures included in accounts payable and accrued expenses$10,847 $15,874 
Supplemental disclosure of cash flow information:Supplemental disclosure of cash flow information:Supplemental disclosure of cash flow information:
Cash interest payments$6,654 $7,530 
Cash interest payments, net of amounts capitalizedCash interest payments, net of amounts capitalized$6,566 $6,654 
Cash paid for income taxesCash paid for income taxes$15,451 $3,017 Cash paid for income taxes$— $15,451 
    
The accompanying notes are an integral part of these financial statements.
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NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 20222023
(unaudited)
Note 1 – Organization and Business

Novavax, Inc. (“Novavax,” and together with its wholly owned subsidiaries, the “Company”) is a biotechnology company that promotes improved global health globally through the discovery, development, and commercialization of innovative vaccines to prevent serious infectious diseases. The Company’s coronavirusCOVID-19 vaccine (“NVX-CoV2373, and its lead” “Nuvaxovid™,” “Covovax™,” “Novavax COVID-19 Vaccine, Adjuvanted”); influenza vaccine candidate, a quadrivalent influenzacandidate; COVID-19-Influenza Combination (“CIC”) vaccine previously known as NanoFlu,candidate; and additional vaccine candidates, including for Omicron subvariants and bivalent formulations with prototype vaccine (“NVX-CoV2373”), are genetically engineered three-dimensional nanostructures of conformationally correct recombinant proteins critical to disease pathogenesis and may elicit differentiated immune responses, which may be more efficacious than naturally occurring immunity or traditional vaccines.other vaccine approaches. NVX-CoV2373 and the Company’s influenzaother vaccine includecandidates incorporate the Company's proprietary Matrix-M™ adjuvant to enhance the immune response and stimulate higher levels of functional antibodies and induce a cellular immune response. The Company has announced data from its ongoing PREVENT-19 study supporting the use of NVX-CoV2373 for homologous boosting in adults and adolescents aged 12 through 17. Additional findings in Phase 3 COVID-19 Omicron (study 311) trial showed utility of the Company's proprietary Matrix-M adjuvant.prototype vaccine as a heterologous booster, inducing broad immune responses against contemporary Omicron variants.

As of March 31, 2022, theThe Company hadhas received approval, interim authorization, provisional approval, conditional marketing authorization, and emergency use authorization (“EUA”) from multiple regulatory authorities globally for NVX-CoV2373 including by the World Health Organization (“WHO”),for both adult and adolescent populations as well as the European Medicines Agency's (“EMA”)a primary series and the United Kingdom's Medicinesfor both homologous and Healthcare products Regulatory Agency (“MHRA”), both of which are considered regulatory authorities that apply stringent standardsheterologous booster indications, and meet the WHO standards for quality, safety, and efficacy in their regulatory review process.

During the three months ended March 31, 2022, the Company commenced commercial shipments of NVX-CoV2373 doses under the name “Novavax COVID-19 Vaccine, Adjuvanted” and the brand name Nuvaxovid™.“Nuvaxovid™” during the first quarter 2022.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated financial statements are unaudited but include all adjustments (consisting of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position, operating results, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows respectively, for the periods presented. Although the Company believes that the disclosures in these unaudited consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted under the rules and regulations of the United States Securities and Exchange Commission (“SEC”).
The unaudited consolidated financial statements include the accounts of Novavax, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Accumulated other comprehensive incomeloss included a foreign currency translation loss of $1.3$3.2 million and $1.4$6.4 million as ofat March 31, 20222023 and December 31, 2021,2022, respectively. The aggregate foreign currency transaction gains resulting from the conversion of the transaction currency to functional currency were $16.3 million and $2.2 million for the three months ended March 31, 2023 and 2022, respectively, which are reflected in Other income.
The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.2022. Results for this or any interim period are not necessarily indicative of results for any future interim period or for the entire year. The Company operates in 1one business segment.
Liquidity and Going Concern
The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern within one year after the date that the financial statements are issued. At March 31, 2023, the Company had $636.9 million in cash and cash equivalents and restricted cash. In April 2023, the Company repaid $112.5 million related to the refund due under the Amended and Restated SARS-CoV-2 Vaccine Supply Agreement, dated July 1, 2022, as further amended on September 26, 2022, (the “Amended and Restated UK Supply Agreement”) with The Secretary of
6


ReclassificationsState for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland, which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020, between the parties, and $27.0 million related to a Settlement Agreement and Release of Claims between the Company and Par Sterile Products, LLC (“Par”), as described in Note 15 below, which was fully accrued as of March 31, 2023. During the three months ended March 31, 2023, the Company incurred a net loss of $293.9 million and had net cash flows used in operating activities of $325.6 million.
Certain amounts reportedIn accordance with Accounting Standards Codification 205-40, Going Concern, the Company evaluated whether there are conditions and events, considered in prior periods have been reclassifiedthe aggregate, that raise substantial doubt about its ability to conformcontinue as a going concern within one year after the date that these unaudited consolidated financial statements are issued. While the Company’s current cash flow forecast for the one-year going concern look forward period estimates that there will be sufficient capital available to fund operations, this forecast is subject to significant uncertainty, including as it relates to revenue for the next 12 months, funding from the U.S. government, and a pending matter subject to arbitration proceedings. The Company’s revenue projections depend on its ability to successfully develop, manufacture, distribute, and market an updated monovalent or bivalent formulation of a vaccine candidate for COVID-19 for the Fall 2023 COVID vaccine season, which is inherently uncertain and subject to a number of risks, including regulatory approval and commercial adoption. In February 2023, in connection with the execution of Modification 17 to the USG Agreement (as defined in Note 3), the U.S. government indicated to the Company that the award may not be extended past its current period of performance. If the USG Agreement is not amended, as the Company’s management had previously expected, then the Company may not receive all of the remaining $336.4 million in funding that was previously anticipated pursuant to the USG Agreement. On January 24, 2023, Gavi, the Vaccine Alliance (“Gavi”) filed a demand for arbitration with the International Court of Arbitration regarding an alleged material breach by the Company of the Company’s advance purchase agreement with Gavi (the “Gavi APA”). The outcome of that arbitration is inherently uncertain, and it is possible the Company could be required to refund all or a portion of the remaining advance payments of $697.4 million (see Note 3 and Note 15).

Management believes that, given the significance of these uncertainties, substantial doubt exists regarding the Company’s ability to continue as a going concern through one year from the date that these financial statement presentation. These reclassificationsstatements are issued.
In May 2023, the Company announced a global restructuring and cost reduction plan. This plan includes a more focused investment in its NVX-CoV2373 program, reduction to its pipeline spending, the continued rationalization of its manufacturing network, a reduction to the Company’s global workforce, as well as the consolidation of facilities and infrastructure. The planned workforce reduction includes an approximately 25% reduction in the Company’s global workforce, comprised of an approximately 20% reduction in full-time Novavax employees and the remainder comprised of contractors and consultants. The Company expects the full annual impact of the cost savings to be realized in 2024 and approximately half of the annual impact to be realized in 2023 due to timing of implementing the measures, and the applicable laws, regulations, and other factors in the jurisdictions in which the Company operates. The Company expects to record a charge of approximately $10 million to $15 million related to one-time employee severance and benefit costs, the majority of which are expected to be incurred in the second quarter of 2023 and is evaluating the anticipated costs related to the consolidation of facilities and infrastructure.
The Company’s ability to fund Company operations is dependent upon revenue related to vaccine sales for its products and product candidates, if such product candidates receive marketing approval and are successfully commercialized; the resolution of certain matters, including whether, when, and how the dispute with Gavi is resolved; and management’s plans, which include resolving the dispute with Gavi and cost reductions associated with the Company’s global restructuring and cost reduction plan. Management’s plans may also include raising additional capital through a combination of equity and debt financing, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements. New financings may not be available to the Company on commercially acceptable terms, or at all. Also, any collaborations, strategic alliances, and marketing, distribution, or licensing arrangements may require the Company to give up some or all of its rights to a product or technology, which in some cases may be at less than the full potential value of such rights. In addition, the regulatory and commercial success of NVX-CoV2373 and the Company’s other vaccine candidates, including an influenza vaccine candidate, a CIC vaccine candidate, and a COVID-19 variant strain-containing monovalent or bivalent formulation, remains uncertain. If the Company is unable to obtain additional capital, the Company will assess its capital resources and may be required to delay, reduce the scope of, or eliminate some or all of its operations, or further downsize its organization, any of which may have noa material adverse effect on previously reportedits business, financial position, cash flows, orcondition, results of operations.operations, and ability to operate as a going concern.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
Revenue Recognition - Product Sales
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Product sales are associated with our NVX-CoV2373 supply agreements, sometimes referred to as advance purchase agreements (“APAs”), with various international governments. Revenue Recognition Constraints
The Company recognizes revenue from product sales based onconstrains the transaction price per dose calculated in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) when control of the product transfers to thefor customer and customer acceptance has occurred, unless such acceptance provisions are deemed perfunctory. If an APA includes a term that may have the effect of decreasing the price per dose of previously delivered shipments, the Company constrains the pricearrangements until it is probable that a significant reversal in cumulative revenue recognized will not occur.
Cost Specifically, if a customer arrangement includes a provision whereby the customer may request a discount, return or refund for a previously satisfied performance obligation or otherwise could have the effect of Sales
Costdecreasing the transaction price, revenue is constrained based on an estimate of sales includes cost of raw materials, production, and manufacturing overhead costs associated with the Company’s product sales during the period. Cost of sales also includes adjustments for excess, obsolete, or expired inventoryimpact to the extent management determinestransaction price recognized until it is probable that the cost cannot be recovered based on estimates about future demand. Cost of sales doesa significant reversal in cumulative revenue recognized will not include certain expenses related to raw materials, production, and manufacturing overhead costs which were expensed as described under the caption “Inventory” below.
Inventory

Inventory is recorded at the lower of lease-adjusted standard cost or net realizable value under the First In, First Out (“FIFO”) methodology, taking into consideration the expiration of the inventory item. The Company determines cost using a standard cost method, which approximates average cost. Average cost consists primarily of costs associated with the purchase of raw materials, the cost of manufacturing goods, including the services and products of third-party suppliers, and the application of manufacturing overhead. The Company utilizes third-party contract manufacturing organizations (“CMOs”), contract development and manufacturing organizations (“CDMOs”) and other suppliers and service organizations to support the procurement and processing of raw materials, management of inventory, packaging, and the delivery process. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolete, or expired inventory through cost of goods sold.

Prior to initial regulatory authorization for its product candidates, the Company expenses costs relating to raw materials, production, and manufacturing overhead costs as research and development expenses in the consolidated statements of operations, in the period incurred. Subsequent to initial regulatory authorization for a product candidate, the Company capitalizes the costs of production for a particular supply chain as inventory when the Company determines that it has a present right to the economic benefit associated with the product.
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occur.
Recent Accounting Pronouncements
Not Yet Adopted
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments(“ (“ASU 2016-13”), with amendments in 2018, 2019, 2020, and 2020.2022. The ASU sets forth a “current expected credit loss” (“CECL”) model that requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. ASU 2016-13 applies to financial instruments that are not measured at fair value, including receivables that result from revenue transactions. The ASU is effective for the Company beginning on January 1, 2023. Management is currently evaluating the effect of the guidance and does expect it to have a material impact on the Company’s consolidated financial statements.
Adopted
In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplified the accounting for certain financial instruments with characteristics of liabilities and equity, including certain convertible instruments and contracts in an entity’s own equity. Specifically, the new standard removed the separation models required for convertible debt with cash conversion features and convertible instruments with beneficial conversion features. It also removed certain settlement conditions that are currently required for equity contracts to qualify for the derivative scope exception and simplified the diluted earnings per share calculation for convertible instruments. The Company adopted ASU 2020-06 on January 1, 20222023, using a modified retrospective approach, whichand it did not have a material impact on the Company’s consolidated financial statements.
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Note 3 – Revenue
The Company's accounts receivable included $70.2 million, $53.8 million, $425.9 million, and $419.7 million related to amounts that were billed to customers and $42.7 million, $28.6 million, $52.3 million, and $35.3 million related to amounts which had not yet been billed to customers as of March 31, 2023, December 31, 2022, March 31, 2022, and December 31, 2021, respectively. During the three months ended March 31, 2023 and 2022, changes in the Company's accounts receivables, allowance for doubtful accounts, and deferred revenue balances were as follows (in thousands):
December 31, 2021AdditionsDeductionsMarch 31, 2022
Contract receivables:
Accounts receivable$454,993 625,124 (601,961)$478,156 
Contract liabilities:
Deferred revenue(1)
$1,595,472 49,094 (108,586)$1,535,980 
Balance, Beginning of PeriodAdditionsDeductionsBalance, End of Period
Accounts receivable:
Three months ended March 31, 2023$96,210 $146,424 $(115,950)$126,684 
Three months ended March 31, 2022454,993 625,124 (601,961)478,156 
Allowance for doubtful accounts(1):
Three months ended March 31, 2023$(13,835)$— $— $(13,835)
Three months ended March 31, 2022— — — — 
Deferred revenue:
Three months ended March 31, 2023$549,551 $140,324 $(49)$689,826 
Three months ended March 31, 20221,595,472 49,094 (108,586)1,535,980 
(1)Amount is comprised    There was no bad debt expense recorded during the three months ended March 31, 2023 or 2022. To estimate the allowance for doubtful accounts, the Company evaluates the credit risk related to its customers based on historical loss experience, economic conditions, the aging of $1.1 billionreceivables, and $1.4 billion of current Deferred revenue and $441.7 million and $172.5 million of non-current Deferred revenue ascustomer-specific risks.
As of March 31, 2022 and December 31, 2021, respectively.
The2023, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties, the Gavi APA, and the reduction in doses related to the Amended and Restated UK Supply Agreement, was approximately $7$3 billion as of March 31, 2022.which $689.8 million was included in Deferred revenue. Failure to meet regulatory milestones, timely obtain supportive recommendations from governmental advisory committees, or achieve product volume or delivery timing obligations under the Company’s advance purchase agreements (“APAs”) may require the Company to refund portions of upfront payments or result in reduced future payments, which could adversely impact the Company’s ability to realize revenue from its unsatisfied performance obligations. The timing to fulfill performance obligations related to grant agreements will depend on the results of the Company's research and development activities, including clinical trials.trials, and delivery of doses. The timing to fulfill performance obligations related to APAs will depend on timing of product manufacturing, delivery, and receipt of marketing authorizations.authorizations for additional indications, delivery of doses based on customer demand, and the ability of the customer to request variant vaccine in place of the prototype
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NVX-CoV2373 vaccine under certain of our APAs. The remaining unfilled performance obligations not related to grant agreements or APAs are expected to be fulfilled in less than 12 months.
Grants
Under the terms of the Gavi APA and a separate purchase agreement between Gavi and Serum Institute of India Pvt. Ltd. (“SIIPL”), 1.1 billion doses of NVX-CoV2373 were to be made available to countries participating in the COVAX Facility. The Company recognized grantexpected to manufacture and distribute 350 million doses of NVX-CoV2373 to countries participating under the COVAX Facility. Under a separate purchase agreement with Gavi, SIIPL was expected to manufacture and deliver the balance of the 1.1 billion doses of NVX-CoV2373 for low- and middle-income countries participating in the COVAX Facility. The Company expected to deliver doses with antigen and adjuvant manufactured at facilities directly funded under the Company's funding agreement with Coalition for Epidemic Preparedness Innovations (“CEPI”), with initial doses supplied by SIIPL and Serum Life Sciences Limited (“SLS”) under a supply agreement. The Company expected to supply significant doses that Gavi would allocate to low-, middle- and high-income countries, subject to certain limitations, utilizing a tiered pricing schedule and Gavi could prioritize such doses to low- and middle- income countries, at lower prices. Additionally, the Company could provide additional doses of NVX-CoV2373, to the extent available from CEPI-funded manufacturing facilities, in the event that SIIPL could not materially deliver expected vaccine doses to the COVAX Facility. Under the agreement, the Company received an upfront payment of $350.0 million from Gavi in 2021 and an additional payment of $350 million in 2022 related to the Company’s achieving an emergency use license for NVX-CoV2373 by the WHO (the “Advance Payment Amount”).

On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA on the basis of Gavi’s failure to procure the purchase of 350 million doses of NVX-CoV2373 from the Company as required by the Gavi APA. As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses. On December 2, 2022, Gavi issued a written notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the Gavi APA. Gavi also contends that, based on its purported termination of the Gavi APA, it is entitled to a refund of the Advance Payment Amount less any amounts that have been credited against the purchase price for binding orders placed by a buyer participating in the COVAX Facility. As of March 31, 2023, the remaining Gavi Advance Payment Amount of $697.4 million, pending resolution of the dispute with Gavi related to a return of the remaining Advance Payment Amount, was reclassified from Deferred revenue to Other current liabilities in the Company’s consolidated balance sheets. On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above. The Company filed its Answer and Counterclaims on March 2, 2023. On April 5, 2023, Gavi filed its Reply to the Company’s Counterclaims. Arbitration is inherently uncertain, and while the Company believes that it is entitled to retain the remaining Advance Payment Amount received from Gavi, it is possible that it could be required to refund all or a portion of the remaining Advance Payment Amount from Gavi.
Product Sales
Product sales by the Company’s customer’s geographic location was as follows (in thousands):
Three Months Ended
March 31,
20222021
U.S. government partnership (“OWS”)$99,301 $363,560 
U.S. Department of Defense (“DoD”)— 19,144 
Coalition for Epidemic Preparedness Innovations (“CEPI”)— 61,561 
Bill & Melinda Gates Foundation (“BMGF”)— 2,628 
Total$99,301 $446,893 
Three Months Ended
March 31,
20232022
North America$— $64,762 
Europe57,267 413,745 
Rest of the world(64,724)107,121 
Total product revenue$(7,457)$585,628 
RoyaltiesIn May 2023, the Company extended a credit for certain doses delivered in 2022 that qualified for replacement under the contract with the customer. This credit is the result of a single lot sold to the Australian government that upon pre-planned 6-month stability testing was found to have fallen below the defined specifications and Other
Forthe lot was therefore removed from the market. The credit will be applied against the future sale of doses to the customer and, during the three months ended March 31, 2022,2023, the Company recorded a reduction of $64.7 million in product sales, with a corresponding increase to Deferred revenue, non-current.
Grants
The Company’s U.S. government agreement consists of a Project Agreement (the “Project Agreement”) and a Base Agreement with Advanced Technology International, the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with the partnership formerly known as Operation Warp Speed (the Base Agreement
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together with the Project Agreement are referred to as the “USG Agreement”). In February 2023, in connection with the execution of Modification 17 to the Project Agreement, the U.S. government indicated to the Company that the award may not be extended past its current period of performance, December 31, 2023. Also, Modification 17 included provisions requiring that the payment of $60.0 million of consideration associated with manufacturing work now be contingent upon meeting certain milestones, including the delivery of up to 1.5 million doses of NVX-CoV2373 and development and regulatory milestones related to commercial readiness, expansion of the EUA and development of multiple vial presentations. As of March 31, 2023, the Company constrained the total transaction price by $48.0 million for consideration associated with milestones that are not fully within the Company’s control. This constraint, in addition to other contract changes included within Modification 17, resulted in an approximately $29 million cumulative reduction to revenue previously recognized under the contract for the three months ended March 31, 2023.
Royalties and Other
During the three months ended March 31, 2023, the Company did not recognize revenue related to sales-based royalties. The Company recognized $7.4 million in revenue related to sales-based royalties. Forroyalties during the three months ended March 31, 2021, the Company did 0t recognize any revenue related to sales-based royalties.2022.
Note 4 – Collaboration, License, and LicenseSupply Agreements
Serum Institute
The Company previously granted Serum Institute of India Private Limited (“SIIPL”)SIIPL exclusive and non-exclusive licenses for the development, co-formulation, filling and finishing, registration, and commercialization of NVX-CoV2373.NVX-CoV2373, its proprietary COVID-19 variant antigen candidate(s), its quadrivalent influenza vaccine candidate, and its CIC vaccine candidate. SIIPL agreed to purchase the Company's Matrix-MTMMatrix-M™ adjuvant and the Company granted SIIPL a non-exclusive license to manufacture the antigen drug substance component of NVX-CoV2373 in SIIPL’s licensed territory solely for use in the manufacture of NVX-CoV2373. The Company and SIIPL equally split the revenue from SIIPL’s sale of NVX-CoV2373 in its licensed territory, net of agreed costs. The Company also has a supply agreement with SIIPL and Serum Life Sciences Limited (“SLS”)SLS under which SIIPL and SLS supply the Company with NVX-CoV2373, its proprietary COVID-19 variant antigen candidate(s), its quadrivalent influenza vaccine candidate, and its CIC vaccine candidate for commercialization and sale in certain territories.
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territories, as well as a contract development manufacture agreement with SLS, under which SLS manufactures and supplies finished vaccine product to the Company using antigen drug substance and Matrix-M™ adjuvant supplied by the Company. In March 2020, the Company granted SIIPL a non-exclusive license for the use of Matrix-M™ adjuvant supplied by the Company to develop, manufacture, and commercialize R21, a malaria candidate developed by the Jenner Institute, University of Oxford (“R21/Malaria”). Under the agreement, SIIPL purchases the Company's Matrix-M™ adjuvant to manufacture R21/Malaria and SIIPL pays a royalty in the single to low double-digit range for a period of 15 years after the first commercial sale of product in each country.
Takeda Pharmaceutical Company Limited
The Company has a collaboration and license agreement with Takeda Pharmaceutical Company Limited (“Takeda”) under which the Company granted Takeda an exclusive license to develop, manufacture, and commercialize NVX-CoV2373 in Japan. Under the agreement, Takeda purchases the Company's Matrix-M™ adjuvant from the Company to manufacture doses of NVX-CoV2373 and the Company is entitled to receive payments from Takeda based on the achievement of certain development and commercial milestones, as well as a portion of net profits from the sale of NVX-CoV2373. In September 2021, Takeda finalized an agreement with the Government of Japan’s Ministry of Health, Labour and Welfare ("MHLW") for the purchase of 150 million doses of NVX-CoV2373. In February 2023, MHLW cancelled the remainder of doses under its agreement with Takeda. As a result, it is uncertain whether the Company will receive future payments from Takeda under the terms and conditions of their current collaboration and licensing agreement.
Other Supply Agreements
On September 30, 2022, the Company, FUJIFILM Diosynth Biotechnologies UK Limited (“FDBK”), FUJIFILM Diosynth Biotechnologies Texas, LLC (“FDBT”), and FUJIFILM Diosynth Biotechnologies USA, Inc. (“FDBU” and together with FDBK and FDBT, “Fujifilm”) entered into a Confidential Settlement Agreement and Release (the “Fujifilm Settlement Agreement”) regarding amounts due to Fujifilm in connection with the termination of manufacturing activity at FDBT under the Commercial Supply Agreement (the “CSA”) dated August 20, 2021 and Master Services Agreement dated June 30, 2020 and associated statements of work (the “MSA”) by and between the Company and Fujifilm. The MSA and CSA established the general terms and conditions applicable to Fujifilm’s manufacturing and supply activities related to NVX-CoV2373 inunder the lowassociated statements of work.
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Pursuant to middle double-digit range. Thethe Fujifilm Settlement Agreement, the Company is eligibleresponsible for a future milestone payment of $20.0up to $185.0 million upon(the “Settlement Payment”) to Fujifilm in connection with cancellation of manufacturing activity at FDBT under the first saleCSA, of which (i) $47.8 million, constituting the initial reservation fee under the CSA, was credited against the Settlement Payment on September 30, 2022 and (ii) the remaining balance is to be paid in Japan. Regulatory approvalfour equal quarterly installments of $34.3 million each, which began on March 31, 2023. As of March 31, 2023, the remaining payment of $102.9 million was reflected in Japan was received in April 2022 (see Note 16).
SK bioscience, Co., Ltd.Accrued expenses. Under the Fujifilm Settlement Agreement, Fujifilm is required to use commercially reasonable efforts to mitigate the losses associated with the vacant manufacturing capacity caused by the termination of manufacturing activities at FDBT under the Fujifilm CSA, and the final two quarterly installments will be mitigated by any replacement revenue achieved by Fujifilm between July 1, 2023 and December 31, 2023.
The Company has a collaborationcontinues to assess its manufacturing needs and license agreementintends to modify its global manufacturing footprint consistent with SK bioscience, Co., Ltd. (“SK bioscience”)its contractual obligations to manufacturesupply, and commercializeanticipated demand for, NVX-CoV2373, for sale to the governments of Korea, Thailand, and Vietnam. SK bioscience pays a royalty in the low to middle double-digit range. Additionally, the Company has a manufacturing supply arrangement with SK bioscience under which SK bioscience supplies the Company with the antigen component of NVX-CoV2373 for use in the final drug product globally, including product todoing so, recognizes that significant costs may be distributed by the COVAX Facility, which was established to allocate and distribute vaccines equitably to participating countries and economies.incurred.
Note 5Earnings (Loss) per Share
Basic and diluted net income (loss) per share were calculated as follows (in thousands, except per share data):
Three Months Ended
March 31,
Three Months Ended
March 31,
2022202120232022
Numerator:Numerator:Numerator:
Net income (loss), basicNet income (loss), basic$203,408 $(222,719)Net income (loss), basic$(293,905)$203,408 
Interest on convertible notes, netInterest on convertible notes, net3,403 — Interest on convertible notes, net— 3,403 
Net income (loss), dilutiveNet income (loss), dilutive206,811 (222,719)Net income (loss), dilutive(293,905)206,811 
Denominator:Denominator:Denominator:
Weighted average number of common shares outstanding, basicWeighted average number of common shares outstanding, basic76,457 73,035 Weighted average number of common shares outstanding, basic86,158 76,457 
Effect of dilutive securitiesEffect of dilutive securities4,254 — Effect of dilutive securities— 4,254 
Weighted average number of common shares outstanding, dilutiveWeighted average number of common shares outstanding, dilutive80,711 73,035 Weighted average number of common shares outstanding, dilutive86,158 80,711 
Net income (loss) per share:Net income (loss) per share:Net income (loss) per share:
BasicBasic$2.66 $(3.05)Basic$(3.41)$2.66 
DilutedDiluted$2.56 $(3.05)Diluted$(3.41)$2.56 
Anti-dilutive securities excluded from calculations of diluted net income (loss) per shareAnti-dilutive securities excluded from calculations of diluted net income (loss) per share1,474 8,659 Anti-dilutive securities excluded from calculations of diluted net income (loss) per share23,971 1,474 
Note 6 – Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets that sums to the total of the same such amounts shown in the statementconsolidated statements of cash flows (in thousands):

March 31, 2022December 31, 2021March 31, 2023December 31, 2022
Cash and cash equivalentsCash and cash equivalents$1,570,954 $1,515,116 Cash and cash equivalents$624,950 $1,336,883 
Restricted cash, currentRestricted cash, current11,492 11,490 Restricted cash, current10,330 10,303 
Restricted cash, non-current(1)
Restricted cash, non-current(1)
1,654 1,653 
Restricted cash, non-current(1)
1,663 1,659 
Cash, cash equivalents, and restricted cashCash, cash equivalents, and restricted cash$1,584,100 $1,528,259 Cash, cash equivalents, and restricted cash$636,943 $1,348,845 
(1)Classified as Other non-current assets as of March 31, 20222023 and December 31, 2021,2022, on the consolidated balance sheets.
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Note 7 – Fair Value Measurements
The following table represents the Company'sCompany’s fair value hierarchy for its financial assets and liabilities (in thousands):
Fair Value at March 31, 2022Fair Value at December 31, 2021Fair Value at March 31, 2023Fair Value at December 31, 2022
AssetsAssetsLevel 1Level 2Level 3Level 1Level 2Level 3AssetsLevel 1Level 2Level 3Level 1Level 2Level 3
Money market funds(1)
Money market funds(1)
$500,411 $— $— $361,822 $— $— 
Money market funds(1)
$152,786 $— $— $398,834 $— $— 
Government-backed securities(1)
Government-backed securities(1)
— 179,500 — — 266,250 — 
Government-backed securities(1)
— 296,000 — — 296,000 — 
Treasury securities(1)
— 54,009 — — — — 
Corporate debt securities(1)
Corporate debt securities(1)
— 672,208 — — 790,672 — 
Corporate debt securities(1)
— 4,991 — — — — 
Agency securities(1)
Agency securities(1)
— 62,739 — — — — 
Agency securities(1)
— — — — 104,536 — 
Total cash equivalentsTotal cash equivalents$500,411 $968,456 $— $361,822 $1,056,922 $— Total cash equivalents$152,786 $300,991 $— $398,834 $400,536 $— 
LiabilitiesLiabilitiesLiabilities
Convertible notes payable$— $348,098 $— $— $447,509 $— 
5.00% Convertible notes due 20275.00% Convertible notes due 2027$$103,811 $$$172,789$
3.75% Convertible notes due 20233.75% Convertible notes due 2023— — — — 322,111 — 
Total convertible notes payableTotal convertible notes payable$— $103,811 $— $— $494,900 $— 
(1)All investments are classified as cashCash and cash equivalents as of March 31, 20222023 and December 31, 2021,2022, on the consolidated balance sheets.
Cash equivalentsFixed-income investments categorized as Level 2 are recordedvalued at cost, which approximate fair value due to their short-term nature.the custodian bank by a third-party pricing vendor’s valuation models that use verifiable observable market data, such as interest rates and yield curves observable at commonly quoted intervals and credit spreads, bids provided by brokers or dealers, or quoted prices of securities with similar characteristics. Pricing of the Company's Notes (see Note 11)Company’s convertible notes has been estimated using other observable inputs, including the price of the Company'sCompany’s common stock, implied volatility, interest rates, and credit spreads among others.spreads.
During the three months ended March 31, 20222023 and 2021,2022, the Company did not have any transfers between levels.
The amount in the Company’s consolidated balance sheets for accounts payable and accrued expenses approximates its fair value due to its short-term nature.
Note 8 – Inventory
Inventory consisted of the following (in thousands):
March 31, 2022December 31, 2021March 31, 2023December 31, 2022
Raw materialsRaw materials$34,664 $8,872 Raw materials$12,320 $13,912 
Semi-finished goodsSemi-finished goods66,101 — Semi-finished goods13,108 21,410 
Finished goodsFinished goods5,883 — Finished goods8,757 1,361 
Total inventoryTotal inventory$106,648 $8,872 Total inventory$34,185 $36,683 
Inventory write-downs as a result of excess, obsolescence, expiry, or other reasons, and losses on firm purchase commitments are recorded as a component of cost of sales in our consolidated statements of operations. For the three months ended March 31, 2023, inventory write-downs were $12.5 million. For the three months ended March 31, 2023, losses on firm purchase commitments were $7.7 million. There were no inventory write-downs or losses on firm purchase commitments during the three months ended March 31, 2022.
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Note 9 – Goodwill
The Company has one reporting unit, which has a negative equity value as of ended March 31, 2023 and Other Intangible Assets
Goodwill
December 31, 2022. The change in the carrying amounts of goodwill for the three months ended March 31, 20222023 was as follows (in thousands):
Amount
Balance at December 31, 20212022$131,479126,331 
Currency translation adjustments(723)3,496 
Balance at March 31, 20222023$130,756129,827 

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Note 10 – Leases
Identifiable Intangible Assets
Purchased intangible assets consisted of the following (in thousands):
March 31, 2022December 31, 2021
Gross
Carrying
Amount
Accumulated 
Amortization
Intangible
Assets, Net
Gross
Carrying
Amount
Accumulated 
Amortization
Intangible
Assets, Net
Finite-lived intangible assets:
Proprietary adjuvant technology$8,004 $(3,469)$4,535 $8,239 $(3,469)$4,770 
Collaboration agreements3,614 (3,614)— 3,722 (3,722)— 
Total identifiable intangible assets$11,618 $(7,083)$4,535 $11,961 $(7,191)$4,770 
Amortization expense was $0.1 millionThe Company has embedded leases related to supply agreements with contract manufacturing organizations (“CMOs”) and contract manufacturing and development organizations to manufacture NVX-CoV2373, as well as operating leases for each ofits research and development and manufacturing facilities, corporate headquarters and offices, and certain equipment. During the three months ended March 31, 2022 and 2021.
Estimated amortization expense for existing intangible assets for the remainder of 2022 and for each of the five succeeding years ending December 31 will be as follows (in thousands):
YearAmount
2022 (remainder)$300 
2023400 
2024400 
2025400 
2026400 
2027400 
Note 10 - Leases

During the first quarter of 2022,2023, the Company evaluated the impactcontinued to align its global manufacturing footprint as a result of changes in facts and circumstances on its CMOs and CDMOs agreements that had previously been determined to represent embedded lease arrangements. The Company concluded that the impact resulted in the modificationongoing assessment of existing leases and, in accordancemanufacturing needs consistent with its policy,contractual obligations related to the Company remeasuredsupply, and reallocated the remaining consideration in the contracts and reassessed the lease classification as of the effective date of the modification. As a result, the Company recognized a Right-Of-Use (“ROU”) asset and a corresponding long-term operating lease liability of $10.4 million on the remeasurement of one of its long-term supply agreements using an incremental borrowing rate of 2.4%. The Company expensed the ROU asset since it relates to research and development activitiesanticipated demand for, the development of NVX-CoV2373 for which the Company does not have an alternative future use. Modifications to leases with a lease term of 12 months or less at the commencement date did not result in a change in lease classification and in accordance with the Company's election, it applied the practical expedient in ASC 842 to recognize lease payments as an expense on a straight-line basis over the modified lease term.NVX-CoV2373.
During the three months ended March 31, 2022 and 2021,2023, the Company recognized a short-term lease expense of $78.1$0.7 million, and $127.6 million, respectively, related to its embedded leases and expensed $10.4 million and $1.0 million, respectively,no expense was recognized for the write off of ROUright of use (“ROU”) assets that represented assets acquired for research and development activities that did not have an alternative future use at the commencement or modification of the lease. During the three months ended March 31, 2022, and 2021, the Company recognized $1.1a short-term lease expense of $78.1 million, related to its embedded leases and $2.1expensed $10.4 million of interest expense, respectively, on its finance lease liabilities.
During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland (“700QO”). The lease is for approximately 170,000 square feet of space that the Company intends to use for manufacturing, research and development, and offices. The term of the lease is 15 years with options to extend the lease. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs.ROU write off. During the three months ended March 31, 2023 and 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, the third floor of the premises and recognized a ROU asset of $47.8$0.5 million and related$1.1 million, respectively, of interest expense on its finance lease obligation for the combined third floor and land lease as the lease commencement date for accounting purposes had occurred.liabilities.
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Note 11 – Long-Term Debt
Convertible Notes
The Company incurred approximately $10.0 million of debt issuance costs during the first quarter of 2016 relating to the issuance of $325 million aggregate principal amount of convertible senior unsecured notes that will mature on February 1, 2023 (the “Notes”), which were recorded as a reduction to the Notes on the consolidated balance sheet. The $10.0 million of debt issuance costs is being amortized and recognized as additional interest expense over the seven-year contractual term of the Notes on a straight-line basis, which approximates the effective interest rate method.
Total convertible notes payable consisted of the following at (in thousands):
March 31, 2022December 31, 2021
Principal amount of Notes$325,000 $325,000 
Unamortized debt issuance costs(1,186)(1,542)
Total convertible notes payable(1)
$323,814 $323,458 
March 31, 2023December 31, 2022
Current portion:
3.75% Convertible notes due 2023$— $325,000 
Unamortized debt issuance costs— (119)
Total current convertible notes payable$— $324,881 
Non-current portion:
5.00% Convertible notes due 2027$175,250 $175,250 
Unamortized debt issuance costs and discount(8,393)(8,784)
Total non-current convertible notes payable$166,857 $166,466 
(1)    During the three months ended March 31, 2023, the Company repaid the outstanding principal amount of $325.0 million on its 3.75% Convertible notes are classifieddue in 2023, together with accrued but unpaid interest on the maturity date. The repayment was funded by the issuance of the 5.00% Convertible notes due 2027 and the concurrent common stock offering in December 2022, as current liabilities andwell as non-current liabilities in the Consolidated Balance Sheet as of March 31, 2022 and December 31, 2021, respectively.cash on hand.
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The interest expense incurred in connection with the Notes consisted of the following (in thousands):
Three Months Ended March 31,
20222021
Coupon interest at 3.75%$3,047 $3,047 
Amortization of debt issuance costs356 356 
Total interest expense on Notes$3,403 $3,403 

Three Months Ended
March 31,
20232022
Coupon interest$3,206 $3,047 
Amortization of debt issuance costs510 356 
Total interest expense on convertible notes payable$3,716 $3,403 
Note 12 – Stockholders' Equity (Deficit)
During the three months ended March 31, 2022,In June 2021, the Company sold 2.2 million of shares of its common stock resulting in net proceeds of approximately $179 million, under its most recententered into an At Market Issuance Sales agreement entered in June 2021Agreement (the “June"June 2021 Sales Agreement”Agreement"), which allows it to issue and sell up to $500 million in gross proceeds of shares of its common stock. As of March 31, 2022,2023, the remaining balance available under the June 2021 Sales Agreement was approximately $318 million. There were no sales recorded under the June 2021 Sales Agreement during the three months ended March 31, 2023.
During the three months ended March 31, 2021,2022, the Company sold 2.62.2 million shares of its common stock resulting in net proceeds of approximately $565$179 million, under its various At Market IssuanceJune 2021 Sales agreements.Agreement.
Note 13 – Stock-Based Compensation
Equity Plans
In January 2023, the Company established the 2023 Inducement Plan (the “2023 Inducement Plan”), which provides for the granting of share-based awards to individuals who were not previously employees, or following a bona fide period of non-employment, as an inducement material to such individuals entering into employment with the Company. The Company reserved 1.0 million shares of common stock for grant under the 2023 Inducement Plan. As of March 31, 2023, there were 0.3 million shares available for issuance under the 2023 Inducement Plan.
The 2015 Stock Incentive Plan, as amended (“2015 Plan”), was approved at the Company's annual meeting of stockholders in June 2015. Under the 2015 Plan, equity awards may be granted to officers, directors, employees, and consultants of and advisors to the Company and any present or future subsidiary.
The 2015 Plan authorizes the issuance of up to 12.414.8 million shares of common stock under equity awards granted under the 2015 Plan. All such shares authorized for issuance under the 2015 Plan have been reserved. The 2015 Plan will expire on March 4, 2025. As of March 31, 2023, there were 0.5 million shares available for issuance under the 2015 Plan.
The Amended and Restated 2005 Stock Incentive Plan (“2005 Plan”) expired in February 2015 and no new awards may be made under such plan, although awards will continue to be outstanding in accordance with their terms.
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The 2023 Inducement Plan and the 2015 Plan permitspermit and the 2005 Plan permitted the grant of stock options (including incentive stock options), restricted stock, stock appreciation rights (“SARs”), and restricted stock units.units (“RSUs”). In addition, under the 2023 Inducement Plan and the 2015 Plan, unrestricted stock, stock units, and performance awards may be granted. Stock options and stock appreciation rightsSARs generally have a maximum term of ten years and may be or were granted with an exercise price that is no less than 100% of the fair market value of the Company's common stock at the time of grant. Grants of stock optionsshare-based awards are generally subject to vesting over periods ranging from one to four years.
The Company recorded all stock-based compensation expense in the consolidated statements of operations as follows (in thousands):
Three Months Ended
March 31,
Three Months Ended
March 31,
2022202120232022
Cost of salesCost of sales$519 $— 
Research and developmentResearch and development$16,887 $23,790 Research and development13,858 16,887 
General and administrative16,046 29,270 
Selling, general, and administrativeSelling, general, and administrative14,270 16,046 
Total stock-based compensation expenseTotal stock-based compensation expense$32,933 $53,060 Total stock-based compensation expense$28,647 $32,933 
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Total stock-based compensation capitalized and included in inventory as of March 31, 2023 and December 31, 2022 was $1.7 million.
As of March 31, 2022,2023, there was approximately $239$174 million of total unrecognized compensation expense related to unvested stock options, SARs, RSUs, and the ESPP.Company’s Employee Stock Purchase Plan, as amended (“ESPP”). This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of approximately one year. This estimate does not include the impact of other possible stock-based awards that may be made during future periods.
The aggregate intrinsic value represents the total intrinsic value (the difference between the Company'sCompany’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money stock options and SARs) that would have been received by the holders had all stock option and SAR holders exercised their stock options and SARs on March 31, 2022.2023. This amount is subject to change based on changes to the closing price of the Company's common stock. The aggregate intrinsic value of stock options and SARs exercises and vesting of RSUs for the three months ended March 31, 20222023 and 20212022 was approximately $5.6$1.5 million and $81.5$5.6 million, respectively.
Stock Options and Stock Appreciation Rights
The following is a summary of stock options and SARs activity under the 2023 Inducement Plan, 2015 Plan, and 2005 Plan for the three months ended March 31, 2022:2023:
2015 Plan2005 Plan
Stock
Options
Weighted-Average
Exercise
Price
Stock
Options
Weighted-Average
Exercise
Price
Outstanding at December 31, 20213,635,837 $42.60 68,225 $109.52 
Granted433,774 77.98 — — 
Exercised(40,869)16.11 (3,000)31.10 
Canceled(11,368)66.71 (1,500)121.00 
Outstanding at March 31, 20224,017,374 $46.62 63,725 $112.94 
Shares exercisable at March 31, 20221,296,368 $55.96 63,725 $112.94 
Shares available for grant at March 31, 20222,666,535 
2023 Inducement Plan2015 Plan2005 Plan
Stock
Options
Weighted-Average
Exercise
Price
Stock
Options
Weighted-Average
Exercise
Price
Stock
Options
Weighted-Average
Exercise
Price
Outstanding at December 31, 2022— $— 4,053,290 $46.07 63,725 $112.94 
Granted358,600 10.96 927,742 7.20 — — 
Exercised— — (5,031)6.81 — — 
Canceled— — (15,835)81.44 (5,250)36.60 
Outstanding at March 31, 2023358,600 $10.96 4,960,166 $38.73 58,475 $119.80 
Shares exercisable at March 31, 2023— $— 311,560 $40.60 58,475 $119.80 
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The fair value of stock options granted under the 2023 Inducement Plan and the 2015 Plan was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:
Three Months Ended
March 31,
Three Months Ended
March 31,
2022202120232022
Weighted average Black-Scholes fair value of stock options grantedWeighted average Black-Scholes fair value of stock options granted$65.78$116.26Weighted average Black-Scholes fair value of stock options granted$7.19$65.78
Risk-free interest rateRisk-free interest rate1.4%-2.0%0.5%-0.9%Risk-free interest rate3.6%-4.0%1.4%-2.0%
Dividend yieldDividend yield—%—%Dividend yield—%—%
VolatilityVolatility120.5%-130.6%124.7%-140.3%Volatility127.7%-140.3%120.5%-130.6%
Expected term (in years)Expected term (in years)4.1-5.34.1-5.3Expected term (in years)3.9-5.14.1-5.3
The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs outstanding under the 2023 Inducement Plan, 2015 Plan and 2005 Plan as of March 31, 20222023 was approximately $154$0.9 million and 7.77.5 years, respectively. The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs exercisable under the 2023 Inducement Plan, 2015 Plan and 2005 Plan as of March 31, 20222023 was approximately $47$0.7 million and 6.66.5 years, respectively.
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Restricted Stock Units
The following is a summary of RSU activity for the three months ended March 31, 2022:2023:
Number of
Shares
Per Share
Weighted-
Average
Fair Value
Outstanding and unvested at December 31, 2021819,828 $116.70 
Restricted stock units granted659,189 79.97 
Restricted stock units vested(20,386)174.64 
Restricted stock units forfeited(31,444)97.85 
Outstanding and unvested at March 31, 20221,427,187 $99.32 
2023 Inducement Plan2015 Plan
Number of
Shares
Per Share
Weighted-
Average
Fair Value
Number of
Shares
Per Share
Weighted-
Average
Fair Value
Outstanding and unvested at December 31, 2022— $— 2,034,574 $61.67 
Granted308,390 $10.96 2,531,445 7.20 
Vested— $— (211,688)87.25 
Forfeited— $— (88,570)52.68 
Outstanding and unvested at March 31, 2023308,390 $10.96 4,265,761 $28.26 
Employee Stock Purchase Plan
The Employee Stock Purchase Plan, as amended (the “ESPP”),ESPP was approved at the Company's annual meeting of stockholders in June 2013. The ESPP currently authorizes an aggregate of 600,0001.1 million shares of common stock to be purchased.purchased, and the aggregate amount of shares will continue to increase 5% on each anniversary of its adoption up to a maximum of 1.65 million shares. The ESPP allows employees to purchase shares of common stock of the Company at each purchase date through payroll deductions of up to a maximum of 15% of their compensation, at 85% of the lesser of the market price of the shares at the time of purchase or the market price on the beginning date of an option period (or, if later, the date during the option period when the employee was first eligible to participate). As of March 31, 2022,2023, there were 137,1390.5 million shares available for issuance under the ESPP.
The ESPP is considered compensatory for financial reporting purposes. As such, the fair value of ESPP shares was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:
Three Months Ended
March 31,
20222021
Range of Black-Scholes fair values of ESPP shares granted$44.67-$79.74$128.70-$238.85
Risk-free interest rate0.6%-1.4%0.1%
Dividend yield—%—%
Volatility116.2%-142.9%120.4%-159.4%
Expected term (in years)0.5-2.00.5-2.0
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Note 14 – Income Taxes

The Company evaluates the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective evidence evaluated was the cumulative loss incurred over the three-year period ended March 31, 20222023 and that the Company has historically generated pretax losses. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. On the basis of this evaluation, as of March 31, 2022,2023, the Company continued to maintain a full valuation allowance against its deferred tax assets, except to the extent Net Operating Losses (“NOLs”) werehave been used to reduce taxable income during the quarter.income. The Company’s remaining U.S. Federal NOLs are subject to limitation in accordance with the 2017 Tax Cuts and Jobs Act (“TCJA”), which limits allowable NOL deductions to 80% of federal taxable income.
Effective January 1, 2022, a provision of the TCJA has taken effect creating a significant change to the treatment of research and experimental expenditures under Section 174 of the IRC (“Sec. 174 expenses”). Historically, businesses have had the option of deducting Sec. 174 expenses in the year incurred or capitalizing and amortizing the costs over five years. The new TCJA provision, however, eliminates this option and will require Sec. 174 expenses associated with research conducted in the U.S. to be capitalized and amortized over a five-year period. For expenses associated with research outside of the U.S., Sec. 174 expenses will be capitalized and amortized over a 15-year period.
The Company recognized federal, state, and stateforeign income tax expense of $1.2 million and $0.6 million, in total, for the three months ended March 31, 2023 and 2022, and did 0t recognize federal or state incomerespectively. The Company recognized foreign withholding tax expense on royalties of $2.1 million for the three months ended March 31, 2021. During2022. The Company did not recognize any foreign withholding tax expense on royalties for the three months ended March 31, 2022 and 2021, the Company recognized $2.1 million and $3.0 million, respectively, of income tax expense related to foreign withholding tax on royalties.2023.
Note 15Commitments and Contingencies
Legal Matters
On November 12, 2021, Sothinathan Sinnathurai filed a purported securities class action in the U.S. District Court for the District of Maryland (the “Maryland Court”) against the Company and certain members of senior management, captioned Sothinathan Sinnathurai v. Novavax, Inc., et al., No. 8:21-cv-02910-TDC (the “Sinnathurai Action”). On January 26, 2022, the courtMaryland Court entered an order designating David Truong, Nuggehalli Balmukund Nandkumar, and Jeffrey Gabbert as co-lead plaintiffs in the Sinnathurai Action. The co-lead plaintiffs filed a consolidated amended complaint on March 11, 2022,
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alleging that the defendants made certain purportedly false and misleading statements concerning the Company’s ability to manufacture NVX-CoV2373 on a commercial scale and to secure the vaccine’sNVX-CoV2373’s regulatory approval. The amended complaint defines the purported class as those stockholders who purchased the Company’s securities between February 24, 2021 and October 19, 2021. On April 25, 2022, defendants filed a motion to dismiss the consolidated amended complaint. On December 12, 2022, the Maryland Court issued a ruling granting in part and denying in part defendants’ motion to dismiss. The Maryland Court dismissed all claims against two individual defendants and claims based on certain public statements challenged in the consolidated amended complaint. The Maryland Court denied the motion to dismiss as to the remaining claims and defendants, and directed the Company and other remaining defendants to answer within fourteen days. On December 27, 2022, the Company filed its answer and affirmative defenses.
After the Sinnathurai Action was filed, 3seven derivative lawsuits were filed and are currently pending in the U.S. District Court for the District of Maryland:filed: (i) Robert E. Meyer v. Stanley C. Erck, et al., No. 8:21-cv-02996-TDC (the “Meyer Action”), (ii) Shui Shing Yung v. Stanley C. Erck, et al., No. 8:21-cv-03248-TDC (the “Yung Action”), and(iii) William Kirst, et al. v. Stanley C. Erck, et al., No. 8:22-cv-00024-TDC (the “Kirst Action”), (iv) Amy Snyder v. Stanley C. Erck, et al., No. 8:22-cv-01415-TDC (the “Snyder Action”), (v) Charles R. Blackburn, et al. v. Stanley C. Erck, et al., No. 1:22-cv-01417-TDC (the “Blackburn Action”), (vi) Diego J. Mesa v. Stanley C. Erck, et al. (the “Mesa Action”), and (vii) Sean Acosta v. Stanley C. Erck, et al. (the “Acosta Action”). The Meyer, Yung, Snyder, and Blackburn Actions were filed in the Maryland Court. The Kirst Action was filed in the Circuit Court for Montgomery County, Maryland, and shortly thereafter removed to the Maryland Court by the defendants. The Mesa and Acosta Actions were filed in the Delaware Court of Chancery (the “Delaware Court”). The derivative lawsuits name members of the Company’s board of directors and certain members of senior management as defendants. The companyCompany is deemed a nominal defendant. The plaintiffs assert derivative claims arising out of substantially the same alleged facts and circumstances as the Sinnathurai Action. Collectively, the derivative complaints assert claims for breach of fiduciary duty, insider selling, unjust enrichment, violation of federal securities law, abuse of control, waste, and mismanagement. Plaintiffs seek declaratory and injunctive relief, as well as an award of monetary damages and attorneys’ fees. The Company removed the Kirst Action from the Circuit Court for Montgomery County, Maryland, shortly after the case was filed.
On February 7, 2022, the plaintiffs in the Kirst Action filed a motion to remand the case to state court. The Company has opposed the remand motion. The parties finished briefing the remand motion on March 8, 2022, and await the Court’s decision. On February 4, 2022, theMaryland Court entered an order consolidating the Meyer and Yung Actions (the “Consolidated“First Consolidated Derivative Action”). The plaintiffs in the First Consolidated Derivative Action filed their consolidated derivative complaint on April 25, 2022. On May 10, 2022, the Maryland Court entered an order granting the parties’ request to stay all proceedings and deadlines pending the earlier of dismissal or the filing of an answer in the Sinnathurai Action. On June 10, 2022, the Snyder and Blackburn Actions were filed. On October 5, 2022, the Maryland Court entered an order granting a request by the plaintiffs in the First Consolidated Derivative Action and the Snyder and Blackburn Actions to consolidate all three actions and appoint co-lead plaintiffs and co-lead and liaison counsel (the “Second Consolidated Derivative Action”). The co-lead plaintiffs in the Second Consolidated Derivative Action filed a consolidated amended complaint on November 21, 2022. On February 10, 2023, defendants filed a motion to dismiss the Second Consolidated Derivative Action. Plaintiffs’ filed their opposition to the motion to dismiss on April 11, 2023. Defendant’s reply brief in further support of their motion to dismiss is due by May 11, 2023.
On July 21, 2022, the Maryland Court issued a memorandum opinion and order remanding the Kirst Action to state court. On December 6, 2022, the parties to the Kirst Action filed a stipulated schedule pursuant to which the plaintiffs were expected to file an amended complaint on December 22, 2022, and either (i) the parties would file a stipulated stay of the Kirst Action or (ii) the defendants would file a motion to stay the case by January 23, 2023. The plaintiffs filed an amended complaint on December 30, 2022. On January 23, 2023, defendants filed a motion to stay the Kirst action. On February 22, 2023, the parties in the Kirst Action filed for the Court’s approval of a stipulation staying the Kirst Action pending the resolution of defendants’ motion to dismiss in the Second Consolidated Derivative Action. On March 22, 2023, the Court entered an order staying the Kirst Action intendpending resolution of the Motion to file a stipulation and proposedDismiss in the Second Consolidated Derivative Action.
On August 30, 2022, the Mesa Action was filed. On October 3, 2022, the Delaware Court entered an order granting the parties’ request to temporarily stay all proceedings and deadlines in the Mesa Action pending the earlier of dismissal of the Sinnathurai Action or the filing of an answer to the operative complaint in the Sinnathurai Action. On January 9, 2023, the court entered an order granting the parties’ request to set a briefing schedule in connection with a motion to stay that defendants intended to file. Pursuant to the order, defendants filed a motion to stay on January 18, 2023. The plaintiff filed his opposition on February 8, 2023. Defendants filed their reply on February 22, 2023. On February 28, 2023, the court granted Defendants’ motion and stayed the Mesa Action pending the entry of a final, non-appealable judgment in the Second Consolidated Derivative Action.
On December 7, 2022, the Acosta Action was filed. On February 6, 2023, defendants accepted service of the complaint and summons in the Acosta action. On March 9, 2023, the court entered an order granting the parties’ request to stay the Acosta Action pending the entry of a final, non-appealable judgment in the Second Consolidated Derivative Action. The financial impact of this claim, as well as the claims discussed above, is not estimable.
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On February 26, 2021, a Company stockholder named Thomas Golubinski filed a derivative complaint against members of the Company’s board of directors and members of senior management in the Delaware Court, captioned Thomas Golubinski v. Richard H. Douglas, et al., No. 2021-0172-JRS. The Company is deemed a nominal defendant. Golubinski challenged equity awards made in April 2020 and in June 2020 on the ground that they were “spring-loaded,” that is, made at a time when such board members or members of senior management allegedly possessed undisclosed positive material information concerning the Company. The complaint asserted claims for breach of fiduciary duty, waste, and unjust enrichment. The plaintiff sought an award of damages to the Company, an order rescinding both awards or requiring disgorgement, and an award of attorneys’ fees incurred in connection with the litigation. On May 10, 2021, the defendants moved to dismiss the complaint in its entirety. On June 17, 2021, the Company’s stockholders voted FOR ratification of the April 2020 awards and ratification of the June 2020 awards. Details of the ratification proposals are set forth in the Company’s Definitive Proxy Statement filed on May 3, 2021. The results of the vote were disclosed in the Company’s Current Report on Form 8-K filed on June 24, 2021. Thereafter, the plaintiff stipulated that, as a result of the outcome of the June 17, 2021 vote, the plaintiff no longer intends to pursue the lawsuit or any claim arising from the April 2020 and June 2020 awards. On August 23, 2021, the plaintiff filed a motion seeking an award of attorneys’ fees and expenses, to which the defendants filed an opposition. On October 18, 2022, the Delaware Court denied the plaintiff’s fee application in its entirety. Under a prior Delaware Court order, the case was automatically dismissed with prejudice upon denial of the plaintiff’s fee application. On November 14, 2022, Golubinski filed a Notice of Appeal in the Supreme Court of the State of Delaware. The plaintiff / appellant filed his opening appellate brief on December 30, 2022. The Company filed its responsive brief on January 30, 2023 and the appellant filed his reply brief on February 14, 2023. The financial impact of this claim, as well as the claims discussed above, is not estimable.
On March 29, 2022, Par Sterile Products, LLC (“Par”) submitted a demand for arbitration against the Company with the American Arbitration Association, alleging that the Company breached certain provisions of the Manufacturing and Services Agreement (“(the “Par MSA”) that the Company entered into with Par in September 2020 to provide fill-finish manufacturing services for NVX-CoV2373. On April 4, 2023, the parties entered into a Settlement Agreement and Release of Claims pursuant to which Novavax agreed to pay $27.0 million to Par, which was fully accrued for as of March 31, 2023. Novavax characterized the payment as a $15.0 million termination fee due under the Par MSA and a $12.0 million settlement payment. Because Par and its parent company, Endo International plc, are parties to Chapter 11 bankruptcy proceedings, the Settlement Agreement and Release of Claims and the payment due thereunder required, and subsequently received, approval from the bankruptcy court. The matter is atCompany has made the payment required by the Settlement Agreement and Release of Claims, and, subject to the non-occurrence of certain contingencies, the arbitration will be dismissed on or about July 13, 2023.
On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA based on Gavi’s failure to procure the purchase of 350 million doses of NVX-CoV2373 from the Company as required by the Gavi APA. As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses. On December 2, 2022, Gavi issued a preliminary stagewritten notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the potential loss is not reasonably estimable. While the Company maintainsGavi APA. Gavi also contends that, no breachbased on its purported termination of the MSA has occurred and intendsGavi APA, it is entitled to vigorously defenda refund of the matter, ifAdvance Payment Amount less any amounts that have been credited against the finalpurchase price for binding orders placed by a buyer participating in the COVAX Facility. As of December 31, 2022, the remaining Gavi Advance Payment Amount of $697.4 million, pending resolution of the matter is adversedispute with Gavi related to a return of the remaining Advance Payment Amount, was reclassified from Deferred revenue to Other current liabilities in the Company’s consolidated balance sheet. On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above. The Company filed its Answer and Counterclaims on March 2, 2023. On April 5, 2023, Gavi filed its Reply to the Company’s Counterclaims. Arbitration is inherently uncertain, and while the Company believes that it could haveis entitled to retain the remaining Advance Payment Amount received from Gavi, it is possible that it will be required to refund all or a material impact onportion of the Company's financial position, results of operations, or cash flows.remaining Advance Payment Amount from Gavi.
The Company is also involved in various other legal proceedings arising in the normal course of business. Although the outcomes of these other legal proceedings are inherently difficult to predict, management doesthe Company do not expect the resolution of these other legal proceedings to have a material adverse effect on the Company'sits financial position, results of operations, or cash flows.
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Note 16Subsequent Events
In April 2022,December 2020, the Company entered into an APA with the Commonwealth of Australia for the purchase of doses of NVX-CoV2373 (the “Australia APA”). In April 2023, the Company entered into an amendment to the Australia APA that reduced the number of doses to be delivered under the Australia APA with a commensurate increase in the per-dose price, such that the total contract value of the Australia APA was granted conditional marketing authorization for NVX-CoV2373 by Swissmedic, the regulatory authority in Switzerland.maintained, with doses to be delivered through 2024.
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In January 2021, the Company entered into an APA with Her Majesty the Queen in Right of Canada as represented by the Minister of Public Works and Government Services for the purchase of doses of NVX-CoV2373 (the “Canada APA”). In April 2022, Takeda received marketing and manufacturing approval2023, the Company entered into an amendment to the Canada APA under which it will receive a payment of $100.4 million for NVX-CoV2373 from the Japan Ministryforfeiture of Health, Labour and Welfare.doses originally scheduled for delivery in 2022.

In April 2022, SIIPL was granted EUA byMay 2023, the Thailand FoodCompany announced a global restructuring and Drug Administration forcost reduction plan. This plan includes a more focused investment in its NVX-CoV2373 program, reduction to its pipeline spending, the continued rationalization of its manufacturing network, a reduction to the Company’s global workforce, as well as the consolidation of facilities and infrastructure. The planned workforce reduction includes an approximately 25% reduction in the Company’s global workforce, comprised of an approximately 20% reduction in full-time Novavax employees and the remainder comprised of contractors and consultants. The Company expects the full annual impact of the cost savings to be manufacturedrealized in 2024 and marketed by SIIPL underapproximately half of the brand name Covovax™, and EUA by the Drugs Controller General of India for the use of NVX-CoV2373 in adolescents aged 12 to 17 years,annual impact to be manufacturedrealized in 2023 due to timing of implementing the measures, and marketedthe applicable laws, regulations, and other factors in India as Covovax™.
In April 2022, the U.S. government extendedjurisdictions in which the prescribed timeCompany operates. The Company expects to meet its July 2021 instructionsrecord a charge of approximately $10 million to $15 million related to one-time employee severance and benefit costs, the majority of which are expected to be incurred in the second quarter of 2023 and is evaluating the anticipated costs related to the Company’s agreement under the U.S. government partnership formerly known as Operation Warp Speed (“OWS”) requiring that the Company align with the U.S. Foodconsolidation of facilities and Drug Administration (“FDA”) on analytic methods before conducting additional U.S. manufacturing, to July 2022.infrastructure.

In April 2022, the Company announced initial results from the Phase 1/2 clinical trial of its COVID-Influenza Combination Vaccine (“CIC”). The CIC combines NVX-CoV2373 and its quadrivalent influenza vaccine candidate. The CIC trial demonstrated that formulating the combination vaccine is feasible, well-tolerated, and immunogenic.
In April 2022,May 2023, the Company announced that the FDA’s Vaccinesits CIC, stand-alone influenza and Related Biological Products Advisory Committee (“VRBPAC”) will review NVX-CoV2373 athigh-dose COVID vaccine candidates all showed a meeting scheduled for June 7, 2022. VRBPAC reviewsreassuring preliminary safety profile as well as comparable reactogenicity to individual Novavax influenza and evaluates data regardingCOVID vaccine candidates or authorized influenza vaccine comparators. Additionally, all three vaccines demonstrated preliminary robust immune responses. The primary endpoint evaluated the safety of different formulations of the CIC vaccine candidate and efficacy of vaccinesthe quadrivalent influenza vaccine candidate compared to Fluad® and related biological productsFluzone High-Dose Quadrivalent® (Fluzone HD), as well as a high-dose COVID vaccine candidate in adults aged 50 through 80. All three vaccine candidates contained Novavax’s patented Matrix-M adjuvant and showed reassuring preliminary safety profiles and reactogenicity that are intended for use in the prevention, treatment, or diagnosis of human diseases.was comparable to Fluad and Fluzone HD.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Any statements in the discussion below and elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report"(“Quarterly Report”) about expectations, beliefs, plans, objectives, assumptions, or future events or performance of Novavax, Inc. (“Novavax,” and together with its wholly owned subsidiaries, the “Company,” “we,” or “us”) are not historical facts and are forward-looking statements. Such forward-looking statements include, without limitation, statements about our capabilities, goals, expectations regarding future revenue and expense levels, and capital raising activities; our operating plans and prospects;prospects, including our ability to continue as a going concern through one year from the date of Novavax’ unaudited financial statements for the period ended March 31, 2023; global restructuring and cost reduction plan, which includes a more focused investment in our NVX-CoV2373 program, reduction to our pipeline spending, the continued rationalization of our manufacturing network, a reduction to our global workforce, as well as the consolidation of facilities and infrastructure, the size and timing of the Company’s workforce reduction, the amount and timing of the charges and cash expenditures resulting from the workforce reduction, and the expected timing and impact of cost savings from our global restructuring and cost reduction plan; potential market sizes and demand for our product candidates; the efficacy, safety, and intended utilization of our product candidates; the development of our clinical-stage product candidates and our recombinant vaccine and adjuvant technologies; the development of our preclinical product candidates; our expectations related to enrollment in our clinical trials; the conduct, timing, and potential results from clinical trials and other preclinical studies; plans for and potential timing of regulatory filings; our expectation of manufacturing capacity, timing, production, distribution, and delivery for our coronavirus vaccine candidate (“NVX-CoV2373")NVX-CoV2373 (as defined below) by us and our partners; our estimate of the number of individuals who may potentially be reached by NVX-CoV2373; our expectations with respect to the anticipated ongoing development and commercialization or licensure of NVX-CoV2373, ongoing development of COVID-19 variant strain including the Phase 2b/3 Hummingbird™ trial, the timing of anticipated results and our efforts for the Fall 2023 vaccination season, efforts to expand the NVX-CoV2373 label worldwide as a booster, and to various age groups and geographic locations, and our seasonal quadrivalent influenza vaccine, previously known as NanoFlu; the expected timing, content, and outcomes of regulatory actions; funding from the U.S. government partnership formerly known as Operation Warp Speed (“OWS”),under the U.S. Department of Defense (“DoD”), and the Coalition for Epidemic Preparedness Innovations (“CEPI”), and payments from the Bill & Melinda Gates Foundation (“BMGF”)USG Agreement (as defined below); funding under our advance purchase agreements (“APAs”) and supply agreements and amendments to, or termination of, or legal disputes relating to any such agreement; our available cash resources and usage and the availability of financing generally; plans regarding partnering activities and business development initiatives; and other matters referenced herein. Generally, forward-looking statements can be identified through the use of words or phrases such as “believe,” “may,” “could,” “will,” “would,” “possible,” “can,” “estimate,” “continue,” “ongoing,” “consider,” “anticipate,” “intend,” “seek,” “plan,” “project,” “expect,” “should,” “would,” “aim,” or “assume,” the negative of these terms, or other comparable terminology, although not all forward-looking statements contain these words.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs and expectations about the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Forward-looking statements involve estimates, assumptions, risks, and uncertainties that could cause actual results or outcomes to differ materially from those expressed or implied in any forward-looking statements, and, therefore, you should not place considerable reliance on any such forward-looking statements. Such risks and uncertainties include, without limitation, challenges satisfying, alone or together with partners, various safety, efficacy, and product characterization requirements, including those related to process qualification and assay validation, necessary to satisfy applicable regulatory authorities, such as the U.S. Food and Drug Administration (“FDA”), the World Health Organization (“WHO”), United Kingdom (“UK”) Medicines and Healthcare Products Regulatory Agency (“MHRA”), the European Medicines Agency (“EMA”), the Republic of Korea’s Ministry of Food and Drug Safety, (“MFDS”), or Japan’s Ministry of Health, Labour and Welfare (“MHLW”);Welfare; unanticipated challenges or delays in conducting clinical trials; difficulty obtaining scarce raw materials and supplies; resource constraints, including human capital and manufacturing capacity, constraints on the ability of Novavax to pursue planned regulatory pathways, alone or with partners, in multiple jurisdictions simultaneously, leading to staggering of regulatory filings, and potential regulatory actions; challenges meeting contractual requirements under agreements with multiple commercial, governmental, and other entities; challenges in implementing our global restructuring and cost reduction plan; challenges in obtaining commercial adoption of NVX-CoV2373 or a COVID-19 variant strain-containing formulation; and other risks and uncertainties identified in Part II, Item 1A “Risk Factors” of this Quarterly Report and in Part I, Item 1A “Risk Factors” of the Company'sour Annual Report on Form 10-K for the fiscal year ended December 31, 2021,2022, which may be detailed and modified or updated in other documents filed with the United States Securities and Exchange Commission (“SEC”)SEC from time to time, and are available at www.sec.gov and at www.novavax.com. You are encouraged to read these filings as they are made.

Information in this Quarterly Report includes a financial measure that was not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which we refer to as adjusted cost of sales. We are presenting this non-GAAP financial measure to assist an understanding of our business and its performance. Adjusted cost of sales includes an estimate of standard manufacturing costs that were previously expensed to research and development prior to regulatory approvals for NVX-CoV2373 that would otherwise have been capitalized to inventory. Any non-GAAP financial measures presented are not, and should not be viewed as, substitutes for financial measures required by GAAP, have no standardized meaning prescribed by GAAP, and may not be comparable to the calculation of similar measures of other companies.

We cannot guarantee future results, events, level of activity, performance, or achievement. Any or all of our forward-looking statements in this Quarterly Report may turn out to be inaccurate or materially different from actual results. Further, any forward-looking statement speaks only as of the date when it is made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
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Information in this Quarterly Report, includes a financial measure that was not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which we refer to as adjusted cost of sales. We are presenting this non-GAAP financial measure to assist an understanding of our business and its performance. Adjusted cost of sales includes an estimate of standard manufacturing costs that were previously expensed to research and development prior to regulatory approvals for NVX-CoV2373 that would otherwise have been capitalized to inventory. Any non-GAAP financial measures presented are not, and should not be viewed as, substitutes for financial measures required by GAAP, have no standardized meaning prescribed by GAAP, and may not be comparable to the calculation of similar measures of other companies.
Overview

Novavax, Inc., together with our wholly-owned subsidiaries, isWe are a biotechnology company that promotes improved health globally through the discovery, development, and commercialization of innovative vaccines to prevent serious infectious diseases around the world.diseases. Our proprietary recombinant technology platform harnesses the power and speed of genetic engineering to efficiently produce highly immunogenic nanoparticle vaccines designed to address urgent global health needs.

Our vaccine candidates are genetically engineered nanostructures of conformationally correct recombinant proteins that mimic those found on natural pathogens. This technology enables the immune system to recognize the right target proteins from different angles and develop protective antibodies. We believe that our vaccine technology may lead to the induction of a differentiated immune response that may be more efficacious than naturally occurring immunity or some other vaccine approaches. Our vaccine candidates also incorporate our proprietary saponin-based Matrix-M™ adjuvant to enhance the immune response, and stimulate higher levels of functional antibodies, and induce a cellular immune response.

We have developed a COVID-19 vaccine (“NVX-CoV2373, “Nuvaxovid™,” “Covavax”“Covovax™,” “Novavax COVID-19 Vaccine, Adjuvanted”), and are developing an influenza vaccine, a COVID-19-Influenza Combination vaccine, and additional vaccine candidates. NVX-CoV2373that has received approval, interim authorization, provisional approval, conditional marketing authorization (“CMA”), and emergency use authorization (“EUA”) from multiple regulatory authorities globally.globally for both adult and adolescent populations as a primary series and for both homologous and heterologous booster indications. We are also developing an influenza vaccine candidate, a COVID-19-Influenza Combination (“CIC”) vaccine candidate, as well as COVID-19 variant strain-containing formulation that we intend to provide in a monovalent or bivalent presentation in alignment with public health recommendations. In addition to COVID-19 and seasonal influenza, our other areas of focus include respiratory syncytial virus (“RSV”)providing Matrix-M™ adjuvant for collaborations investigating the prevention of malaria, including R21/Matrix-M™ adjuvant malaria vaccine, which recently received authorization in several countries.
We intend to focus the organization to align our investments and malaria.

activities with our top priority of delivering an updated COVID-19 vaccine consistent with public health recommendations for strain composition for the 2023 Fall vaccination season. To maximize our opportunities and mitigate the significant risks and uncertainties of the COVID-19 market, we have taken several cost restructuring measures to reduce spend, extend our cash runway, and operate efficiently to best position the company to deliver longer-term growth. We discuss these cost restructuring strategies in greater detail in Note 2 to our consolidated financial statements in this Quarterly Report.
Technology Overview

We believe our recombinant nanoparticle vaccine technology, together with our proprietary Matrix-M™ adjuvant, is well-suitedwell suited for the development and commercialization of vaccine candidates targeting a broad scope of respiratory and other endemic and emerging infectious diseases at scale.

Recombinant Nanoparticle Vaccine Technology

Once a pathogenic threat has been identified, the genetic sequence encoding the antigen is selected for subsequent use in developing the vaccine construct. The genetic sequence may be optimized to enhance protein stability or confer resistance to degradation. This genetic construct is inserted into the baculovirus Spodoptera frugiperda (“Sf9/Sf-/BV”) insect cell-expression system, which enables efficient, large-scale expression of the optimized protein. The Sf9/Sf-/BV system produces proteins that are properly folded and modified – modified—which can be critical for functional, protective immunity – immunity—as the vaccine antigen. Protein antigens are purified and organized around a polysorbate-based nanoparticle core, in a configuration that resembles their native presentation. This results in a highly immunogenic nanoparticle that is ready to be formulated with Matrix-MMatrix-M™ adjuvant.

Matrix-M™ Adjuvant

Our proprietary Matrix-M™ adjuvant has beenis a key differentiator within our platform. This adjuvant has demonstratedenabled potent, well-tolerated,well tolerated, and durable efficacy by stimulating the entry of antigen presenting cells (“APCs”) into the injection site and
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enhancing antigen presentation in local lymph nodes. This in turn activates APCs, T-cell and B-cell populations, and plasma cells, andwhich promotes the production of high affinity antibodies, therebyan immune boosting immune response. This potent mechanism of action enables a lower dose of antigen required to achieve the desired immune response, and we believe thereby contributescontributing to increased vaccine supply and manufacturing capacity. These immune-boosting and dose-sparing capabilities contribute to the adjuvant’s highly unique profile.
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We continue to evaluate commercial opportunities for the use of our Matrix-M™ adjuvant alongside vaccine antigens produced by other manufacturers. Matrix-M™ adjuvant is being evaluated in combination with several partner-led malaria vaccine candidates, including for R21/Matrix-M™ adjuvant, a malaria vaccine candidate created by the Jenner Institute, University of Oxford. The R21/Matrix-M™ adjuvant vaccine has been licensed to Serum Institute of India Pvt. Ltd. (“SIIPL”) for commercialization. Our adjuvant technology is also being investigated in veterinary applications and is a key component in equine vaccine to prevent Strangles.


NVX-CoV2373 Regulatory and Licensure

We continue to make progress inare advancing NVX-CoV2373 towardthrough multiple regulatory approvals. We have received numerous authorizations in over 40 countries globally which collectively havefrom major regulatory agencies including the potential to reach over six billion individuals.FDA, the WHO, the EMA, and the MHRA. To date, we have received approval, interim authorization, provisional approval, CMA, and EUA for the adult population, aged 18 and older, the adolescent population, aged 12 to 17 years, and the pediatric population, aged 7 to 11 years in select territories. The regulatory authorizations for NVX-CoV2373 include primary series and both adulthomologous and adolescent populations,heterologous booster indications within specific countries. For the territories in which our vaccine has gained authorization, NVX-CoV2373 is marketed under the brand names (i) Nuvaxovid™ (SARS-CoV-2 rS Recombinant, adjuvanted), (ii) Covovax™ (manufacturing and commercialization by SIIPL), or (iii) Novavax COVID-19 Vaccine, Adjuvanted.
Below we expecthighlight the first quarter 2023 and subsequent regulatory authorizations received through the date of this filing on Form 10-Q.
In January 2023, our partner SK bioscience received expanded manufacturing and marketing approval from Korean Ministry of Food and Drug Safety for Nuvaxovid™ for use as a booster in adults aged 18 and older.
We are working to initiate additional rolling submissions worldwide.continue to expand our label for heterologous boosting in adults, adolescents, and younger children, and to achieve supportive policy recommendations enabling broad market access. We continue to work closely with governments, regulatory authorities, and non-governmental organizations in our commitment to facilitate equitable global access to our COVID-19 vaccine.

For the territories in which our vaccine has gained authorization, NVX-CoV2373 is marketed under the brand name of Nuvaxovid™ COVID-19 Vaccine (SARS-CoV-2 rS [Recombinant, adjuvanted]) or as Covovax™ (manufacturing and commercialization by the Serum Institute of India Pvt. Ltd. (“SIIPL”)).
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Through the date of filing this Quarterly Report, the below is a summary of regulatory authorizations for NVX-CoV2373:

nvax-20220331_g1.jpg
(1)    Regulatory manufacturing and marketing approval received by partner Takeda Pharmaceutical Company Limited (“Takeda”).
(2)    Regulatory approval received in partnership with SIIPL.
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In the first quarter of 2022, we have completed additional regulatory submissions in major markets for both adult and adolescent populations. We are in active discussions with regulatory authorities and remain focused on seeking additional authorizations for NVX-CoV2373.

Below is a summary and status of our regulatory submissions completed through the date of filing this Quarterly Report.
nvax-20220331_g2.jpg
(1)    Regulatory filing submitted by our partner, SK bioscience, Co., Ltd. (“SK bioscience”).
(2)    Regulatory filing submitted in partnership with SIIPL.

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Clinical Pipeline

Our clinical pipeline encompassesis comprised of vaccine candidates spanning multiple therapeutic areas including coronavirus, seasonal influenza, RSV, and Matrix-MTM adjuvant collaborations for the prevention of malaria.infectious diseases. Our lead product is our COVID-19 vaccine, candidate, NVX-CoV2373, is our leading product, havingwhich has received approval, interim authorization, provisional approval, CMA, or EUA for both adult and EUA from multiple regulatory authorities globally.adolescent populations in over 40 countries. We advanced NVX-CoV2373 through two pivotal Phase 3 clinical trials that demonstrated high efficacy against both the original COVID-19 strain and commonly circulating COVID-19 variants, of concern (“VoC”), while maintaining a favorable safety profile. We also advancedBeyond COVID-19, our clinical pipeline includes seasonal influenza vaccine through a Phase 3 clinical trial, which demonstrated positive top-line results and achieved statistical significanceCIC vaccines, in key secondary endpoints. We initiated a trialaddition to our Matrix-M™ adjuvant being used for collaborations investigating the prevention of a COVID-19-Influenza Combination vaccine (“CIC”) consisting of our influenza vaccine and NVX-CoV2373. In April 2022, we announced initial results from Phase 1/2 clinical trial of CIC demonstrating that formulating the combination vaccine is well-tolerated and immunogenic. Modeling results showed that combined formulation has the potential to reduce total antigen amount by up to 50% overall, optimizing production and delivery. Additionally, we remain interested in further development of our RSV Program for respiratory syncytial virus fusion (F) protein nanoparticle vaccine candidate (“RSV F Vaccine”). Ongoing Phase 3 trials are being conducted by our partner, Jenner Institute, University of Oxford, for R21, a malaria candidate currently under development by the University of Oxford in partnership with SIIPL, which is formulated using our Matrix-M adjuvant.

malaria.
We remain focused on bringingexpanding our NVX-CoV2373 vaccine candidate tolabel within the booster and adolescent market following global regulatory authorizations. ThroughWe continue to evaluate vaccine effectiveness through ongoing booster studies in our clinical trials, and we continue to advance development of our COVID-19 variant strain containing monovalent or bivalent formulation. In March 2023, we initiated the Phase 3 COVID-19 Omicron BA.5 clinical trial evaluating our prototype vaccine compared to an Omicron BA.5 vaccine, as well as a bivalent containing vaccine. Topline results are expected mid-year 2023, which we expect will confirm the strain-change approach we anticipate using for future variant vaccine candidate approvals.
Further pediatric development is ongoing in the Phase 2b/3 Hummingbird™ Global Clinical Trial, which is evaluating the safety, immunogenicity, and effectiveness of COVID-19 variant strain vaccine candidates, we continueNVX-CoV2373 in children. The trial includes three age de-escalation cohorts of 1,200 children each. The cohort aged six to collect data11 years has completed enrollment, and enrollment is ongoing in the cohort aged two to characterize and improve vaccine performance. five years. Topline results in the cohort aged six to 11 years are expected mid-year 2023.
We expect to leverage these clinical insights to advance the use andpursue additional regulatory approvals of our COVID-19 vaccine for both primary, vaccination around the globe, to use within a booster, setting, and for the pediatric populationindications globally, amidst the ongoing COVID-19 landscape.
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Additionally, we are developing our quadrivalent nanoparticle influenza vaccine (“qNIV”) candidate, which we advanced through a successful Phase 3 study published in September 2021, demonstrating the utility of a stand-alone influenza vaccine or for use in a combination vaccine. We have subsequently updated our qNIV candidate for further development. We continue to progress a Phase 2 dose-confirming trial evaluating our stand-alone influenza vaccine candidate, qNIV and evolvingour CIC vaccine candidate, which combines NVX-CoV2373 and our updated qNIV approach in a single formulation. In January 2023, we completed enrollment of 1,575 participants in the Phase 2 CIC clinical trial. The clinical trial will evaluate safety and immunogenicity of different formulations of CIC and influenza stand-alone vaccine candidates in adults aged 50 to 80 years, with topline results expected by mid-year 2023.
Although our COVID-19, pandemic.CIC, and influenza stand-alone vaccine candidates are our near-term priorities, our partner-led malaria candidates present strong opportunities for future development. An ongoing Phase 3 clinical trial is being conducted for R21/Matrix-M™ adjuvant malaria vaccine, developed by our partner, the Jenner Institute, University of Oxford, manufactured by SIIPL, and is formulated with our Matrix-M™ adjuvant. As of the filing of this Quarterly Report, the R21/Matrix-M™ adjuvant malaria vaccine received authorizations in Ghana and Nigeria. We have an agreement with SIIPL related to its manufacture of R21/Matrix-M™ adjuvant malaria vaccine under which SIIPL purchases Matrix-M™ adjuvant, as well as pays royalties based on its vaccine sales.

The pipeline chart below summarizes the core clinical and preclinical development programs that we are focusing on in the near-term.

nvax-20220331_g3.jpgCore Pipeline.jpg
(1)    Supported by OWS, DoD, CEPI, and BMGF.
(2)    Authorized for provisional approval, CMA, or EUA in select geographies under trade names NuvaxovidTM Novavax COVID-19 Vaccine, Adjuvanted; Covovax™; and CovovaxTMNuvaxovid™. Request submitted to the FDA for EUA. PREVENT-19, a
(2)    Ongoing Phase 3 clinical trial in the U.S. and Mexico; Ongoing PREVENT-19 pediatric expansion in the U.S.; Phase 3 clinical trial in the UK; Ongoing Phase 2b clinical trial in South Africa. We, along with our partners, will have commercial rights in authorized geographies to sell and distribute NVX-CoV2373.strain change trial.

(3)    R21/Matrix-M™ adjuvant malaria vaccine being commercialized by SIIPL.
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Business Highlights
First Quarter 20222023 and Recent Highlights
During the quarter, we made progress delivering on the three near-term priorities laid out during our fourth quarter 2022 earnings call.
Priority #1: Deliver an Updated, Competitive COVID Vaccine for the Upcoming 2023 Fall Vaccination Season
We remain focused on our top priority of delivering an updated, competitive COVID vaccine consistent with public health recommendations for the 2023 Fall vaccination season.

Ongoing discussions with global regulators on strain selection guidance and advancement of commercial preparedness for Fall 2023
Expanded Worldwide AuthorizationsInvited to join the U.S. FDA Technology Working Group to evaluate emerging variants in preparation for COVID-19 Primarystrain selection at the June VRBPAC meeting
Ongoing development of variant strains “at risk” to support regulatory and Booster Vaccinationcommercial readiness
Modified U.S. government agreement for up to 1.5 million additional doses of Novavax’s COVID vaccine for delivery in Adult Population Aged 18+

2023, with initial delivery supplied in five-dose vials in the first quarter of 2023
Received manufacturing and marketing approval with our partner Takeda,Continued expansion of Nuvaxovid label to enable broader uptake in Japan for Nuvaxovid™ for primary, heterologous and homologous boosting indications

Granted authorization (emergency use, provisional, interim or conditional) for Nuvaxovid™ in Great Britain, Canada, Australia, Switzerland, Singapore and New Zealand

Received full regulatory approval for Nuvaxovid™ in South Korea with our partner SK bioscience, becoming the first protein-based vaccine approved in South Korea

Granted EUA for Covovax™ with our partner SIIPL in Thailand and Bangladesh

Submitted request for EUA to the U.S. FDA and, with SIIPL, filed for EUA in South Africa
FDA scheduled Vaccines and Related Biological Products Advisory Committee (“VRBPAC”) meeting for June 7th, 2022

Progressed COVID-19 Vaccine Regulatory Pathway for Children Aged 12-17 Years

Granted EUA for adolescents in India with SIIPL for Covovax™

Submitted requests for authorization for Nuvaxovid™ in adolescents to the European Union, Great Britain, Australia and New Zealand

Filed for approval of Nuvaxovid™ with SK bioscience, for adolescents in South Korea

Additional global submissions planned throughout the second quarter of 2022

CIC Vaccine Candidate Clinical Development

Announced initial results of CIC Phase 1/2 trial, combining NVX-CoV2373 and quadrivalent influenza vaccine candidate
Immune response confirmed in stand-alone influenza vaccine candidate and CIC vaccine candidate with potential path forward for both
Demonstrated combined formulation has potential to reduce total antigen amount by up to 50% overall
Expect to begin CIC Phase 2 trial by the end of 2022

COVID-19 Vaccine Supply and Distribution

Delivered Nuvaxovid™ globally to European Union, Canada, Australia, Thailand, Singapore and New Zealand and with SK bioscience to South Korea

COVID-19 Vaccine Clinical Development

UK Phase 3 study demonstrated ongoing durability of protection against infection and disease in long term follow-up (median of 101 days)
82.5% efficacy in protection against all COVID-19 infection, as measured by PCR+ or anti-N seroconversion
82.7% overall efficacy against disease
100% efficacy against severe disease

long-term commercial market
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Continued rapid developmentCompleted enrollment and assessmenton track to receive topline results mid-2023 for Part 2 of Phase 3 strain change including Omicron-specific clinical studies with topline readoutstudy, which is a regulatory prerequisite for updating our 2023-2024 vaccine composition
Expect to file U.S. Biologics License Application in second half of 2023
Priority #2: Reduce our Rate of Spend, Manage our Cash Flow and Evolve our Scale & Structure
We are focused on significantly reducing our expenses while retaining the key capabilities needed to execute our operating plans.
Announced a global restructuring and cost reduction plan, which is expected in third quarter of 2022to reduce our annual combined 2024 R&D and SG&A expenses
Evaluating benefitIncludes consolidation of Omicron-specific (BA.1facilities and BA.2) or bivalent vaccine compared to current prototype, with first doses expected this monthinfrastructure and approximately 25% reduction in global workforce

2023 R&D and SG&A expense reduction expected to be based on timing of implementation, local laws and regulations and other factors
Priority #3: Leverage our Technology Platform, our Capabilities and our Portfolio of Assets to Drive Additional Value Beyond Nuvaxovid Alone
We continue to leverage our pipeline and technology with the intent of delivering long-term growth and protecting global health.
Announced positive Phase 2 COVID-Influenza Combination (CIC) vaccine, standalone influenza, and high-dose COVID vaccine data, which evaluated safety and immunogenicity of different formulations
All three vaccine candidates were well-tolerated, demonstrated a reassuring preliminary safety profile, and had reactogenicity comparable to authorized comparators
Preliminary topline immune responses for all three vaccine candidates were robust
Progressed South Africa Phase 2 study with ongoing administrationSerum Institute of India has received authorizations in participants to evaluate a three-dose regimenGhana and different dosing schedules in -immunocompromised participants, providing flexibility to national delivery programs
Topline results expected in fourth quarter of 2022

Progressed PREVENT-19 Phase 3 study in adolescents aged 12-17 years
Achieved primary effectiveness endpoint and demonstrated comparability to adult population
Demonstrated 80% overall clinical efficacy and 82% efficacy against Delta variantNigeria for R21/Matrix-M™ adjuvanted malaria vaccine
Vaccine was generally well-tolerateddeveloped by Jenner Institute, University of Oxford, and safety profile was consistentformulated with previous studies
Initiated booster study to evaluate safety and immunogenicity of a third doseour proprietary Matrix-M™ adjuvant

Continued clinical trials in younger age groups to build on positive pediatric data
Expect to initiate PREVENT-19 Phase 3 trial in younger age groups (5-11 years) by third quarter of 2022
SIIPL generated positive data from Phase 2/3 India study in children ages 2-17 years showing robust immune responses with favorable reactogenicity profiles

Announced participation in Phase 1/2 heterologous booster study sponsored by National Institute of Allergy and Infectious Diseases
Evaluating safety, reactogenicity and immunogenicity of heterologous boosters in approximately 180 individuals aged 18 years or older
Topline results expected later this year and full results in 2023

Announced participation in Phase 3 study in the United Arab Emirates evaluating boost with NVX-CoV2373 in participants who were immunized with an inactive COVID-19 vaccine in individuals aged 18 years or older
Sales of Common Stock
During the three months ended March 31, 2022,In June 2021, we sold 2.2 million of shares of our common stock resulting in net proceeds of approximately $179 million, under our most recententered into an At Market Issuance Sales agreement entered in June 2021Agreement (the “June"June 2021 Sales Agreement”Agreement"), which allows us to issue and sell up to $500 million in gross proceeds of shares of ourits common stock. As of March 31, 2022,2023, the remaining balance available under ourthe June 2021 Sales Agreement was approximately $318 million. There were no sales recorded under the June 2021 Sales Agreement during the three months ended March 31, 2023.
During the three months ended March 31, 2021,2022, we sold 2.62.2 million shares of our common stock resulting in net proceeds of approximately $565$179 million, under our various At Market Issuancethe June 2021 Sales agreements then in effect.Agreement.
Critical Accounting Policies and Use of Estimates
ThereThe discussion and analysis of our financial condition and results of operations are no material changesbased upon our consolidated financial statements (unaudited) and the accompanying notes, which have been prepared in accordance with generally accepted accounting principles in the United States.
The preparation of our consolidated financial statements requires us to ourmake estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, and equity and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Our critical accounting policies as described inand estimates are included under Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021,2022, as filed with the SEC.
Recent Accounting Pronouncements Not Yet Adopted
See “Note 2―Summary of Significant Accounting Policies” included in our Notes to Consolidated Financial Statements (under the caption “Recent Accounting Pronouncements”).
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Results of Operations
The following is a discussion of the historical financial condition and results of the Company’sour operations that should be read in conjunction with the unaudited consolidated financial statements and notes set forth in this Quarterly Report.
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Three Months Ended March 31, 20222023 and 20212022
Revenue
Three Months Ended March 31,Three Months Ended March 31,
20222021Change20232022Change
Revenue (in thousands):Revenue (in thousands):Revenue (in thousands):
Product salesProduct sales$585,628 $— $585,628 Product sales$(7,457)$585,628 $(593,085)
GrantsGrants99,301 446,893 (347,592)Grants87,379 99,301 (11,922)
Royalties and otherRoyalties and other19,042 336 18,706 Royalties and other1,029 19,042 (18,013)
Total revenueTotal revenue$703,971 $447,229 $256,742 Total revenue$80,951 $703,971 $(623,020)
Revenue for the three months ended March 31, 20222023 was $704.0$81.0 million as compared to $447.2$704.0 million for the same period in 2021, an increase2022, a decrease of $256.7$623.0 million. Revenue for the three months ended March 31, 2023 was primarily for services performed under our U.S. government agreement with Advanced Technology International (“USG Agreement”), the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with the partnership formerly known as Operation Warp Speed, net of a credit related to product sales of NVX-CoV2373. Revenue for the three months ended March 31, 2022 was primarily comprised of revenue from product sales of NVX-CoV2373, which commenced in 2022 and, to a lesser extent, revenue for services performed under the agreement withUSG Agreement. The reduction in revenue is primarily due to the U.S. government partnership formerly knowndecrease in product sales of NVX-CoV2373 during the three months ended March 31, 2023 as OWS (“OWS Agreement”). Revenuecompared to the same period in 2022.

Product sales
Product sales for the three months ended March 31, 20212023 were $(7.5) million as compared to $585.6 million during the three months ended March 31, 2022. Product sales in the three months ended March 31, 2023, included a credit of $64.7 million for certain doses delivered in 2022 that qualified for replacement. The credit is the result of a single lot sold to the Australian government that upon pre-planned 6-month stability testing was primarilyfound to have fallen below the defined specifications and the lot was therefore removed from the market. The geographic distribution of product sales was as follows:
Three Months Ended March 31,
20232022Change
North America$— $64,762 $(64,762)
Europe57,267 413,745 (356,478)
Rest of the world(64,724)107,121 (171,845)
Total product revenue$(7,457)$585,628 $(593,085)
Grants
Grant revenue during the three months ended March 31, 2023 was $87.4 million as compared to $99.3 million during the same period in 2022, a decrease of $11.9 million. Grant revenue for 2023 and 2022, comprised of revenue for services performed under the OWS Agreement and our funding agreements with CEPI.Project Agreement. The increase in revenuedecrease was primarily due to the commencementnet effect of product sales of NVX-CoV2373, partially offset by decreased development activities under the OWS Agreement as we approach anticipated commercialization of NVX-CoV2373.
We expecta cumulative constraint on revenue in 2022 to significantly increase as compared to 2021 due to product sales of NVX-CoV2373 under various supply agreements, sometimes referred to as advance purchase agreements (“APAs”), as a result of multiple global regulatory approvals, royalties from the saleexecution of NVX-CoV2373 under our supply and license agreements with strategic partnersModification 17 to supply NVX-CoV2373 in their specified territories where we are entitled to receive royalties from such sales, and our NVX-CoV2373 program, which we anticipate will continue to be funded by OWS and other revenue sources.
Expenses
Three Months Ended March 31,
20222021Change
Expenses (in thousands):
Cost of sales$15,204 $— $15,204 
Research and development383,483 592,671 (209,188)
Selling, general, and administrative95,992 63,190 32,802 
Total expenses$494,679 $655,861 $(161,182)
the Project Agreement during the three months ended March 31, 2023.
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Expenses
Three Months Ended March 31,
20232022Change
Expenses (in thousands):
Cost of sales$34,086 15,204 $18,882 
Research and development247,101 383,483 (136,382)
Selling, general, and administrative112,532 95,992 16,540 
Total expenses$393,719 $494,679 $(100,960)
Cost of Sales
Cost of sales was $34.1 million for the three months ended March 31, 2023, including expense of $20.2 million related to excess, obsolete, or expired inventory and losses on firm purchase commitments. Cost of sales was $15.2 million, or 3% of product sales, for the three months ended March 31, 2022.2022, due to the significant write off of pre-launch inventory as research and development expenses. Prior to receiving regulatory approval, we expensed manufacturing costs as research and development expenses. After receiving regulatory approval, we capitalize the costs of production for a particular supply chain when we determine that we have a present right to the economic benefit associated with the product. While we tracked the quantities of our manufactured vaccine product and components, we did not track pre-approval manufacturing costs and therefore the manufacturing cost of our pre-launch inventory produced prior to approval is not reasonably determinable. However, based on our expectations for future manufacturing costs to produce our vaccine product and components inventory, we estimate thatat March 31, 2023, we had approximately $0.7 billion$6.4 million of salable commercial inventory that was expensed prior to approval. We expect to utilize the majority of our reduced-cost inventory during 2022.through 2023. If inventory sold for the three months ended March 31, 2023 was valued at expected standard cost, including expenses related to excess and obsolete inventory, adjusted cost of sales for the period would have been approximately $49.1 million, an adjustment of $15.0 million as compared to cost of sales recognized. If inventory sold for the three months ended March 31, 2022 was valued at expected standard cost, adjusted cost of sales for the period would have been approximately $160$160.0 million, or 27% of product sales, an adjustment of $145$145.0 million. The cost of sales as a percentage of product sales may fluctuate in the future as a result of changes to our customer pricing mix or standard costs.
Research and Development Expenses
Research and development expenses decreased to $247.1 million for the three months ended March 31, 2023 as compared to $383.5 million for the three months ended March 31, 2022, a decrease of $136.4 million. The decrease was primarily due to a reduction in overall expenditures relating to development activities on coronavirus vaccines, including NVX-CoV2373 and Omicron variant vaccine candidates, bivalent formulations, and CIC, as compared to $592.7 millionsummarized in the table below (in thousands):
Three Months Ended March 31,
20232022
Coronavirus vaccines$140,014 $288,933 
Influenza vaccine1,476 1,296 
Other vaccine development programs481 803 
Total direct external research and development expense141,971 291,032 
Employee expenses53,413 43,742 
Stock-based compensation expense13,858 16,887 
Facility expenses19,402 13,208 
Other expenses18,457 18,614 
Total research and development expenses$247,101 $383,483 
Research and development expenses for coronavirus vaccines for the three months ended March 31, 2021,2023 and 2022, included a decreasebenefit of $209.2$11.7 million primarily duerelated to researchpreviously accelerated manufacturing costs and developmentan expense of NVX-CoV2373, as summarized in the table below (in millions):

Three Months Ended March 31,
20222021
NVX-CoV2373$288,933 $538,125 
Influenza vaccine1,296 1,126 
Other vaccine development programs803 304 
Total direct external research and development expense291,032 539,555 
Employee expenses43,742 24,955 
Stock-based compensation expense16,887 23,790 
Facility expenses13,208 2,995 
Other expenses18,614 1,376 
Total research and development expenses$383,483 $592,671 
Research and development expenses for NVX-CoV2373 for the three months ended March 31, 2022, and March 31, 2021 included approximately $21.0 million and $22.8 million, respectively, related to the acceleration of manufacturing costs, respectively, for leases that we determined were embedded in multiple
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manufacturing supply agreements with Contract Manufacturing Organizations (“CMOs”) and contract manufacturing and development organizations (“CDMOs”). For 2022, we expect total research and development expenses to decrease as compared to 2021. The decline in 2022 is anticipated to result from expected capitalization of manufacturing costs during 2022 that were previously recognized as research and development expenses in prior periods, partially offset by research and development expenses related to increased clinical activities as we continue to develop our NVX-CoV2373 and other programs.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased to $96.0$112.5 million for the three months ended March 31, 20222023 from $63.2$96.0 million for the same period in 2021,2022, an increase of $32.8$16.5 million. The increase in selling, general, and administrative expenses is primarily due to an increase in professional feesexpenses related to the expansion of our commercial sales operations in Europe and other costs in support of our NVX-CoV2373 program. program, partially offset by certain cost containment measures to reduce our operating spend.
For 2022,the remainder of 2023, we expectplan to restructure our global footprint to reduce our annual combined research and development, and selling, general, and administrative expenses to increase significantly due to increased activities related to supporting our NVX-CoV2373 program and increases in employee-related costs and professional fees.spend.
Other Income (Expense)Expense
Three Months Ended March 31,
20222021Change
Other Income (Expense) (in thousands):
Interest expense$(4,876)$(4,839)$(37)
Other income (expense)1,654 (6,231)7,885 
Total other expense, net$(3,222)$(11,070)$7,848 
Three Months Ended March 31,
20232022Change
Other income (expense):
Interest expense$(4,316)$(4,876)$560 
Other income24,362 1,654 22,708 
Total other income (expense), net$20,046 $(3,222)$23,268 
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We hadTotal other income, net was $20.0 million for the three months ended March 31, 2023 as compared to a total other expense, net of $3.2 million for the three months ended March 31, 2022 as compared to $11.1 million for the same period in 2021. In the three months ended March 31, 2021, we recorded a $5.9 million loss on the intercompany loan with Novavax CZ2022. The increase in other income is due to changesthe favorable impact of exchange rates on foreign currency denominated balances and an increase in the foreign exchangeinvestment income due to higher interest rates.
Income Tax Expense
We recognized federal and state income tax expense of $0.6 million, in total, for the three months ended March 31, 2022 and did not recognize federal or state income tax expense for the three months ended March 31, 2021. During the three months ended March 31, 20222023 and 2021,2022, we recognized $2.1$1.2 million and $3.0$2.7 million, respectively, of income tax expense related to federal, state, and foreign income taxes and foreign withholding tax expense on royalties.
Net Income (Loss)Loss
Three Months Ended March 31,Three Months Ended March 31,
20222021Change20232022Change
Net Income (Loss) (in thousands, except per share information):Net Income (Loss) (in thousands, except per share information):Net Income (Loss) (in thousands, except per share information):
Net income (loss)Net income (loss)$203,408 $(222,719)$426,127 Net income (loss)$(293,905)$203,408 $(497,313)
Net income (loss) per share, basicNet income (loss) per share, basic$2.66 $(3.05)$5.71 Net income (loss) per share, basic$(3.41)$2.66 $(6.07)
Net income (loss) per share, dilutiveNet income (loss) per share, dilutive$2.56 $(3.05)$5.61 Net income (loss) per share, dilutive$(3.41)$2.56 $(5.97)
Weighted average shares outstanding, basicWeighted average shares outstanding, basic76,457 73,035 3,422 Weighted average shares outstanding, basic86,158 76,457 9,701 
Weighted average shares outstanding, dilutiveWeighted average shares outstanding, dilutive80,711 73,035 7,676 Weighted average shares outstanding, dilutive86,158 80,711 5,447 
Net incomeloss for the three months ended March 31, 20212023 was $203.4$293.9 million, or $2.66$3.41 per share, basic, as compared to a net lossincome of $222.7$203.4 million, or $3.05$2.66 per share, basic, for the same period in 2021.2022. The changedecrease in net income (loss)during the three months ended March 31, 2023, was primarily due to the commencement ofdecline in commercial sales of NVX-CoV2373 partiallyin the three months ended March 31, 2023, offset by decreased revenue under the OWS Agreement.a decrease in research and development expenses.
The increase in weighted average shares outstanding for the three months ended March 31, 2022 is2023 was primarily a result of salesthe sale of our common stock and exercises of stock-based awards in 2022 and 2021.awards.
Liquidity Matters and Capital Resources

Our future capital requirements depend on numerous factors including, but not limited to, revenue from our product sales and royalties under licensing arrangements with our strategic partners; funding and repayments under our grant
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agreements; our projected activities related to the development and commercial support of NVX-CoV2373 and variant candidates, including significant commitments under various CRO,contract research organization, CMO, and CDMO agreements; the progress of preclinical studies and clinical trials; the time and costs involved in obtaining regulatory approvals; the costs of filing, prosecuting, defending, and enforcing patent claims and other intellectual property rights; and other manufacturing, sales, and distribution costs. We plan to continue developing other vaccines and product candidates, such as our influenza vaccine candidate and potential combination vaccines candidates, which are in various stages of development.

We have entered into supply agreements, sometimes referred to as APAs, with Gavi, the Vaccine Alliance (“Gavi”); the European Commission;Commission (“EC”); and various countries globally. We also have grant and license agreements. As of March 31, 2022,2023, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties under the license agreements, our advance purchase agreement with Gavi (the “Gavi APA”) and the reduction in doses related to the Amended and Restated UK Supply Agreement (as defined below), was approximately $7 billion.$3 billion, of which $689.8 million is included in Deferred revenue in our Consolidated balance sheet. Failure to meet regulatory milestones, timely obtain supportive recommendations from governmental advisory committees, or achieve product volume or delivery timing obligations under our APAs may require us to refund portions of upfront payments or result in reduced future payments, which could adversely impact our ability to realize revenue from our unsatisfied performance obligations. The timing to fulfill performance obligations related to grant agreements will depend on the results of our research and development activities, including clinical trials, receipt of US marketing authorization, and delivery of doses. The timing to fulfill performance obligations related to supply agreements will depend on timing of product manufacturing, receipt of marketing authorizations andfor additional indications, delivery of doses.doses based on customer demand, and the ability of the customer to request variant vaccine in place of the prototype NVX-CoV2373 vaccine under certain of our APAs. The supply agreements typically contain terms that include upfront payments intended to assist us in funding investments related to building out and operating our manufacturing and distribution network, among other expenses, in support of our global supply commitment, and are applied to billings upon delivery of NVX-CoV2373. Such upfront payments generally become non-refundable upon our achievement of certain development, regulatory, and commercial milestones. Certain
Pursuant to the Fujifilm Settlement Agreement, we are responsible for a Settlement Payment of up to $185.0 million to Fujifilm in connection with the supply agreements maycancellation of manufacturing activity at FDBT under the Fujifilm CSA, of which (i) $47.8 million, constituting the initial reservation fee under the CSA, was credited against the Settlement Payment on September 30, 2022 and (ii) the remaining balance is to be terminated bypaid in four equal quarterly installments of $34.3 million each. We paid the counterpartyfirst installment of $34.3 million during the three months ended March 31, 2023 and the remaining balance of $102.9 million is reflected in Accrued expenses (see Note 4 to our consolidated financial statements in this Quarterly Report).
During April 2023, we made a payment of $27.0 million to Par Sterile Products, LLC (“Par”) under the event we failSettlement Agreement and Release of Claims (see Note 15 to achieve requisite regulatory approval for NVX-CoV2373our consolidated financial statements in relevant jurisdictions within established time periods. Failure to successfully develop and commercialize NVX-CoV2373 and failure to meet regulatory milestones or product volume or delivery timing obligations under our supply agreements may require us to refund significant portions of the prepayments or reduce payments, which could have a material and adverse effect on our financial condition. this Quarterly Report).
In addition, we continue to assess our manufacturing needs and intend to modify our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated demand for, NVX-CoV2373, and in doing so recognize that significant costs may be incurred.
We have an APA with the Commonwealth of Australia for the purchase of doses of NVX-CoV2373 (the “Australia APA”). In April 2023, we amended the Australia APA to reduce the number of doses to be delivered with a commensurate increase in the per-dose price, such that the total contract value of the Australia APA is maintained with doses to be delivered through 2024. In May 2023, we extended a credit for certain doses delivered in 2022 to Australia that qualified for replacement under the Australia APA. This credit is the result of a single lot sold to the Australian government that upon pre-planned 6-month stability testing was found to have fallen below the defined specifications and the lot was therefore removed from the market. The credit will be applied against the future sale of doses to Australia.

We have an APA with Her Majesty the Queen in Right of Canada as represented by the Minister of Public Works and Government Services for the purchase of doses of NVX-CoV2373 (the “Canada APA”). In April 2023, we amended the Canada APA to forfeit certain doses originally scheduled for delivery in 2022 for a payment of $100.4 million expected to be received in the second quarter of 2023.

In July 2022, we entered into an Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (as amended on September 26, 2022, the “Amended and Restated UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020, between the parties (the “Original UK Supply Agreement”). Under the Original UK Supply Agreement, the Authority agreed to purchase 60 million doses of NVX-CoV2373 and made an upfront payment to us. Under the terms of the Amended and Restated UK Supply Agreement, the Authority agreed to purchase a
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minimum of 1 million doses and up to an additional 15 million doses (the “Conditional Doses”) of NVX-CoV2373, with the number of Conditional Doses contingent on, and subject to reduction based on, our timely achievement of supportive recommendations from the Joint Committee on Vaccination and Immunisation (the “JCVI”) that is approved by the UK Secretary of State for Health, with respect to use of the vaccine for (a) the general adult population as part of a SARS-CoV-2 vaccine booster campaign in the United Kingdom or (b) the general adolescent population as part of a SARS-CoV-2 vaccine booster campaign in the United Kingdom or as a primary series SARS-CoV-2 vaccination, excluding where that recommendation relates only to one or more population groups comprising less than one million members in the United Kingdom. If the Authority does not purchase the Conditional Doses or the number of such Conditional Doses is reduced below 15 million doses of NVX-CoV2373, we would have to repay up to $225.0 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement. Under the Amended and Restated UK Supply Agreement, the Authority also has the option to purchase up to an additional 44 million doses, in one or more tranches, through 2024.

As of November 30, 2022, the JCVI had not yet made a supportive recommendation with respect to NVX-CoV2373, thereby triggering, under the terms of the Amended and Restated UK Supply Agreement, (i) a reduction of the number of Conditional Doses from 15 million doses to 7.5 million doses, which reduced number of Conditional Doses are contingent on, and subject to further reduction based on, our timely achievement by November 30, 2023 of a supportive recommendation from JCVI that is approved by the UK Secretary of State for Health as described in the paragraph above, and (ii) an obligation for us to repay $112.5 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement. In April 2023, we repaid the $112.5 million related to the November 30, 2022 triggering event. If we are unable to timely achieve a supportive recommendation from the JCVI by November 30, 2023, a reduction in the number of Conditional Doses from 7.5 million doses to zero will be triggered and we may be required to repay an additional $112.5 million in 2024.

Under the terms of our contracted supply commitment withthe Gavi which includes the supply obligation of our licensed partner, SIIPL, 1.1 billion doses of NVX-CoV2373 are to be made available to countries participating in the COVAX Facility, which was established to allocate and distribute vaccines equitably to participating countries and economies. The Novavax portion is a supply agreement that contemplates that we will manufacture and distribute 350 million doses. Under that agreement with Gavi,APA, we received an upfront payment of $350$350.0 million from Gavi in 2021 and an additional payment of $350$350.0 million in the first quarter of 2022 related to our achieving an emergency use license for NVX-CoV2373 by the WHO EUL. Although Novavax is prepared to deliver the quantities of NVX-CoV2373 doses(the “Advance Payment Amount”). On November 18, 2022, we delivered written notice to Gavi underto terminate the termsGavi APA on the basis of our supply agreement, we were recently notified by GaviGavi’s failure to procure the purchase of their intent to seek to revise the number and timing of350 million doses of NVX-CoV2373 suppliedfrom us as required by Novavaxthe Gavi APA. As of November 18, 2022, we had only received orders under such agreement. To date, Novavax has not received an order fromthe Gavi APA for approximately 2 million doses. On December 2, 2022, Gavi issued a written notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the timing and quantitiesGavi APA. Gavi also contends that, based on its purported termination of futurethe Gavi APA, it is entitled to a refund of the Advance Payment Amount less any amounts that have been credited against the purchase price for binding orders to deliver NVX-COV2373 toplaced by a buyer participating in the COVAX facility are unclear.

Facility. As of December 31, 2022, the remaining Gavi Advance Payment Amount of $697.4 million, pending resolution of the dispute with Gavi related to a return of the remaining Advance Payment Amount, was reclassified from Deferred revenue to Other current liabilities in our consolidated balance sheet. On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above. We have also entered into supplyfiled our Answer and license agreements with strategic partners, such as SIIPL in India, Takeda in Japan,Counterclaims on March 2, 2023. On April 5, 2023, Gavi filed its Reply to our Counterclaims. Arbitration is inherently uncertain, and SK bioscience in the Republic of Korea,while we believe that allow them to supply NVX-CoV2373 in their specified territories and under which we are entitled to receive royalties primarilyretain the remaining Advance Payment Amount received from their salesGavi, it is possible that we will be required to refund all or a portion of NVX-CoV2373. During the three months ended March 31, 2022, we recognized royalties of $7.4 million under these licensing arrangements.

remaining Advance Payment Amount from Gavi.
In February 2023, in connection with the three months ended March 31, 2022,execution of Modification 17 to the USG Agreement, the U.S. government indicated to us that the award may not be extended past its current period of performance. If the USG Agreement is not amended, as we primarily funded our operationshad previously expected, then we may not receive all of the remaining $336.4 million in funding we had previously anticipated pursuant to the USG Agreement. Modification 17 included provisions requiring that the payment of $60.0 million of consideration associated with cashmanufacturing work now be contingent upon meeting certain milestones, including the delivery of up to 1.5 million doses of NVX-CoV2373 and cash equivalents, upfront payments under APAs, revenue from product sales, royalties under licensing arrangements with our strategic partners,development and proceedsregulatory milestones related to commercial readiness, expansion of the EUA and development of multiple vial presentations.
Our funding agreements currently include funding from the saleCoalition for Epidemic Preparedness Innovations (“CEPI”) in the form of common stock together with revenueone or more forgivable no interest term loans (“CEPI Forgivable Loan Funding”). Payments received under the OWS Agreement that supports ourCEPI Forgivable Loan Funding are only repayable if NVX-CoV2373 vaccine development activities. We anticipate our future operations to bemanufactured by the CMO network funded by revenue from productCEPI is sold to one or more third parties (which would have previously included, but is not limited to, any sales royalties under licensing arrangements with our strategic partners, our cash and cash equivalents, upfront payments under our APAs, revenue underGavi APA prior to its termination), and such sales cover our OWS Agreement,costs of manufacturing such vaccine, not including manufacturing costs funded by CEPI. The timing and other potential funding sources.amount of any loan repayments is currently uncertain.
As of March 31, 2022,2023, we had $1.6 billion$636.9 million in cash and cash equivalents and restricted cash as compared to $1.5$1.3 billion as of December 31, 2021.2022.
We funded our operations for the three months ended March 31, 2023 with cash and cash equivalents and revenue from product sales, together with revenue under the USG Agreement that support our NVX-CoV2373 vaccine development
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activities. In May 2023, we announced our plan to restructure our global footprint to reduce our planned expenditures. We anticipate our future operations to be funded primarily by revenue from product sales, revenue under our USG Agreement, our cash and cash equivalents, and other potential funding sources.
The following table summarizes cash flows for the three months ended March 31, 20222023 and 20212022 (in thousands):
Three Months Ended March 31,
20222021Change20232022Change
Net cash provided by (used in):Net cash provided by (used in):Net cash provided by (used in):
Operating activitiesOperating activities$(88,510)$663,085 $(751,595)Operating activities$(325,593)$(88,510)$(237,083)
Investing activitiesInvesting activities(16,826)141,609 (158,435)Investing activities(23,558)(16,826)(6,732)
Financing activitiesFinancing activities159,865 576,987 (417,122)Financing activities(354,379)159,865 (514,244)
Effect on exchange rate on cash, cash equivalents, and restricted cashEffect on exchange rate on cash, cash equivalents, and restricted cash1,312 (1,349)2,661 Effect on exchange rate on cash, cash equivalents, and restricted cash(8,372)1,312 (9,684)
Net increase in cash, cash equivalents, and restricted cash55,841 1,380,332 (1,324,491)
Net increase (decrease) in cash, cash equivalents, and restricted cashNet increase (decrease) in cash, cash equivalents, and restricted cash(711,902)55,841 (767,743)
Cash, cash equivalents, and restricted cash at beginning of periodCash, cash equivalents, and restricted cash at beginning of period1,528,259 648,738 879,521 Cash, cash equivalents, and restricted cash at beginning of period1,348,845 1,528,259 (179,414)
Cash, cash equivalents, and restricted cash at end of periodCash, cash equivalents, and restricted cash at end of period$1,584,100 $2,029,070 $(444,970)Cash, cash equivalents, and restricted cash at end of period$636,943 $1,584,100 $(947,157)
Net cash used in operating activities was $88.5$325.6 million for the three months ended March 31, 2022,2023, as compared to $88.5 million for the same period in 2022. The increase in cash used in operating activities is primarily due to a decrease in upfront payments received under our APAs, partially offset by the timing of payments to vendors.
Net cash used in investing activities was $23.6 million for the three months ended March 31, 2023, as compared to $16.8 million for the same period in 2022. The increase in cash used in investing activities is primarily due to an increase in internal use software expenditure.
Net cash used in finance activities was $354.4 million for the three months ended March 31, 2023, as compared to net cash provided by operatingfinance activities of $663.1$159.9 million for the same period in 2021.2022. The decreaseincrease in cash providedused in financing activities is primarily due to the application$325 million repayment of upfront payments under APAs resultingour 3.75% Convertible notes during 2023 and net proceeds of approximately $179 million from the sales of NVX-CoV2373our common stock under our June 2021 Sales Agreement during 2022.
Going Concern
The accompanying unaudited consolidated financial statements in Part I, Item 1, “Consolidated Financial Statements” of this Quarterly Report have been prepared assuming that we will continue as a going concern within one year after the three months endeddate that the financial statements are issued. At March 31, 2022 as compared to an increase2023, we had $636.9 million in cash due to the receipt of upfront payments under APAs during the three months ended March 31, 2021.
and cash equivalents and restricted cash. During the three months ended March 31, 20222023, we incurred a net loss of $293.9 million and 2021,had net cash flows used in operating activities of $325.6 million.
While our investing activities consisted primarily of capital expenditures and maturities and sale of marketable securities, net of purchases. Capital expenditurescurrent cash flow forecast for the threeone-year going concern look forward period estimates that we have sufficient capital available to fund operations, this forecast is subject to significant uncertainty, including as it relates to revenue for the next twelve months, ended March 31, 2022funding from the U.S. government, and 2021 were $16.8a pending matter subject to arbitration proceedings. Our revenue projections depend on our ability to successfully develop, manufacture, distribute, or market an updated monovalent or bivalent formulation of a vaccine candidate for COVID-19 for the Fall 2023 COVID vaccine season, which is inherently uncertain and subject to a number of risks, including regulatory approval and commercial adoption. In February 2023, in connection with the execution of Modification 17 to the USG Agreement, the U.S. government indicated to us that the award may not be extended past its current period of performance, which may result in us not receiving all of the remaining $336.4 million in funding we had previously anticipated. On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration regarding an alleged material breach by us of the Gavi APA. The outcome of that arbitration is inherently uncertain, and $13.8 million, respectively. For 2022,it is possible we expectcould be required to refund all or a portion of the remaining Advance payment Amount of $697.4 million. See Note 3 and Note 15 to our capital expendituresunaudited consolidated financial statements in Part I, Item 1, “Consolidated Financial Statements” of this Quarterly Report for additional information related to the arbitration with Gavi. Management believes that, given the significance of these uncertainties, substantial doubt exists regarding our ability to continue as a going concern through one year from the date that these financial statements are issued.

In accordance with Accounting Standards Codification 205-40, Going Concern, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to increase due to further development activities for our NVX-CoV2373 program, includingcontinue as a going concern within one year after the additional build-out of research and development and manufacturing facilities and related equipment, and the build-out of our new corporate office facility.
Our financing activities consisted primarily of sales of our common stock under our At Market Issuance Sales Agreements, payments of finance lease liabilities, and exercise of stock-based awards.date that these unaudited consolidated financial statements are issued. In the three months ended March 31, 2022 and 2021,May 2023, we received net proceeds of approximately $179 million and $565 million, respectively, from selling shares of common stock through our At Market Issuance Sales Agreements.announced a
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global restructuring and cost reduction plan. This plan includes a more focused investment in our NVX-CoV2373 program, reduction to our pipeline spending, the continued rationalization of our manufacturing network, a reduction to our global workforce, as well as the consolidation of facilities and infrastructure. The planned workforce reduction includes an approximately 25% reduction in our global workforce, comprised of an approximately 20% reduction in full-time Novavax employees and the remainder comprised of contractors and consultants. We expect the full annual impact of the cost savings to be realized in 2024 and approximately half of the annual impact to be realized in 2023 due to timing of implementing the measures, and the applicable laws, regulations, and other factors in the jurisdictions in which we operate. We expect to record a charge of approximately $10 million to $15 million related to one-time employee severance and benefit costs, the majority of which is expected to be incurred in the second quarter of 2023 and are evaluating the anticipated costs related to the consolidation of facilities and infrastructure.

Our ability to fund our operations is dependent upon revenue related to vaccine sales for our products and product candidates, if such product candidates receive marketing approval and are successfully commercialized; the resolution of certain matters, including whether, when, and how the dispute with Gavi is resolved; and management’s plans, which include resolving the dispute with Gavi and cost reductions associated with our global restructuring and cost reduction plan. Our plans may include raising additional capital through a combination of equity and debt financing, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements. New financings may not be available to us on commercially acceptable terms, or at all. Also, any collaborations, strategic alliances, and marketing, distribution, or licensing arrangements may require us to give up some or all of our rights to a product or technology, which in some cases may be at less than the full potential value of such rights. In addition, the regulatory and commercial success of NVX-CoV2373 and our other vaccine candidates, including an influenza vaccine candidate, CIC vaccine candidate, or a COVID-19 variant strain-containing monovalent or bivalent formulation, remains uncertain. If we are unable to obtain additional capital, we will assess our capital resources and may be required to delay, reduce the scope of, or eliminate some or all of our operations, or further downsize our organization, any of which may have a material adverse effect on our business, financial condition, results of operations, and ability to operate as a going concern.
Item 3.    Quantitative and Qualitative Disclosures Aboutabout Market Risk

We are subject to certain risks that may affect our results of operations, cash flows, and fair values of assets and liabilities, including volatility in foreign currency exchange rates and interest rate movements.

Foreign Currency Exchange Risk

Although we are headquartered in the U.S., our results of operations, including our foreign subsidiaries’ operations, are subject to foreign currency exchange rate fluctuations, primarily the U.S. dollar against the Euro, Pound Sterling, Swedish Krona, and Czech Koruna. This exchange exposure may have a material effect on our cash flowand cash equivalents, cash flows, and results of operations, particularly in cases of revenue generated under APAs that include provisions that impact our and our counterparty’s currency exchange exposure. To date, we have not entered into any foreign currency hedging contracts, although we may do so in the future.

We also face foreign currency exchange exposure that arises from translating the results of our global operations to the U.S. dollar at exchange rates that have fluctuated from the beginning of the period. While the financial results of our global activities are reported in U.S. dollars, the functional currency offor our foreign subsidiaries is generally their respective local currency. Fluctuations in the foreign currency exchange rates of the countries in which we do business will affect our operating results, often in ways that are difficult to predict. A 10% decline in the foreign exchange rates (primarily against the U.S. dollar) relating to our foreign consolidated subsidiaries would result in a decline of stockholders’ equity (deficit) of approximately $38$14 million as of March 31, 2022.

2023.
Market and Interest Rate Risk

The primary objective of our investment activities is preservation of capital, with the secondary objective of maximizing income.

Our exposure to marketinterest rate risk is primarily confined to our investment portfolio, which historically has been classified as available-for-sale. We do not believe that a change in the market rates of interest would have any significant impact on the realizable value of our investment portfolio. Changes in interest rates may affect the investment income we earn on our marketable securities when they mature and the proceeds are reinvested into new marketable securities and, therefore, could impact our cash flows and results of operations.
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Interest and dividend income is recorded when earned and included in investment income. Premiums and discounts, if any, on marketable securities are amortized or accreted to maturity and included in investment income. The specific identification method is used in computing realized gains and losses on the sale of our securities.

Our Notesconvertible senior unsecured notes have a fixed interest rate, and we have no additional material debt. As such, we do not believe that we are exposed to any material interest rate risk as a result of our borrowing activities.
Item 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the assistance of our chief executive officer and chief financial officer, has reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2022.2023. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving such control objectives. Based on the evaluation of our disclosure controls and procedures as of March 31, 2022,2023, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
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Changes in Internal Control over Financial Reporting

Our management, including our chief executive officer and chief financial officer, have evaluated changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2022,2023, and have concluded that there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reportingreporting.



PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
Stockholder Litigation

On November 12, 2021, Sothinathan Sinnathurai filed a purported securities class action in the U.S. District Court for the District of Maryland (the “Maryland Court”) against Novavaxthe Company and certain members of senior management, captioned Sothinathan Sinnathurai v. Novavax, Inc., et al., No. 8:21-cv-02910-TDC (the “Sinnathurai Action”). On January 26, 2022, the courtMaryland Court entered an order designating David Truong, Nuggehalli Balmukund Nandkumar, and Jeffrey Gabbert as co-lead plaintiffs in the Sinnathurai Action. The co-lead plaintiffs filed a consolidated amended complaint on March 11, 2022, alleging that the defendants made certain purportedly false and misleading statements concerning the Company’s ability to manufacture NVX-CoV2373 on a commercial scale and to secure the vaccine’sNVX-CoV2373’s regulatory approval. The amended complaint defines the purported class as those stockholders who purchased Novavaxthe Company’s securities between February 24, 2021 and October 19, 2021. On April 25, 2022, defendants filed a motion to dismiss the consolidated amended complaint. On December 12, 2022, the Maryland Court issued a ruling granting in part and denying in part defendants’ motion to dismiss. The Maryland Court dismissed all claims against two individual defendants and claims based on certain public statements challenged in the consolidated amended complaint. The Maryland Court denied the motion to dismiss as to the remaining claims and defendants, and directed the Company and other remaining defendants to answer within fourteen days. On December 27, 2022, the Company filed its answer and affirmative defenses.
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After the Sinnathurai Action was filed, threeseven derivative lawsuits were filed and are currently pending in the U.S. District Court for the District of Maryland: filed: (i) Robert E. Meyer v. Stanley C. Erck, et al., No. 8:21-cv-02996-TDC (the “Meyer Action”), (ii) Shui Shing Yung v. Stanley C. Erck, et al., No. 8:21-cv-03248-TDC (the “Yung Action”), and (iii) William Kirst, et al. v. Stanley C. Erck, et al., No. 8:22-cv-00024-TDC (the “Kirst Action”), (iv) Amy Snyder v. Stanley C. Erck, et al., No. 8:22-cv-01415-TDC (the “Snyder Action”), (v) Charles R. Blackburn, et al. v. Stanley C. Erck, et al., No. 1:22-cv-01417-TDC (the “Blackburn Action”), (vi) Diego J. Mesa v. Stanley C. Erck, et al. (the “Mesa Action”), and (vii) Sean Acosta v. Stanley C. Erck, et al. (the “Acosta Action”). The Meyer, Yung, Snyder, and Blackburn Actions were filed in the Maryland Court. The Kirst Action was filed in the Circuit Court for Montgomery County, Maryland, and shortly thereafter removed to the Maryland Court by the defendants. The Mesa and Acosta Actions were filed in the Delaware Court of Chancery (the “Delaware Court”). The derivative lawsuits name members of the Company’s board of directors and certain members of senior management as defendants. NovavaxThe Company is deemed a nominal defendant. The plaintiffs assert derivative claims arising out of substantially the same alleged facts and circumstances as the Sinnathurai Action. Collectively, the derivative complaints assert claims for breach of fiduciary duty, insider selling, unjust enrichment, violation of federal securities law, abuse of control, waste, and mismanagement. Plaintiffs seek declaratory and injunctive relief, as well as an award of monetary damages and attorneys’ fees. Novavax removed the Kirst Action from the Circuit Court for Montgomery County, Maryland, shortly after the case was filed.
On February 7, 2022, the plaintiffs in the Kirst Action filed a motion to remand the case to state court. The Company has opposed the remand motion. The parties finished briefing the remand motion on March 8, 2022, and await the Court’s decision. On February 4, 2022, theMaryland Court entered an order consolidating the Meyer and Yung Actions (the “Consolidated“First Consolidated Derivative Action”). The plaintiffs in the First Consolidated Derivative Action filed their consolidated derivative complaint on April 25, 2022. On May 10, 2022, the Maryland Court entered an order granting the parties’ request to stay all proceedings and deadlines pending the earlier of dismissal or the filing of an answer in the Sinnathurai Action. On June 10, 2022, the Snyder and Blackburn Actions were filed. On October 5, 2022, the Maryland Court entered an order granting a request by the plaintiffs in the First Consolidated Derivative Action and the Snyder and Blackburn Actions to consolidate all three actions and appoint co-lead plaintiffs and co-lead and liaison counsel (the “Second Consolidated Derivative Action”). The co-lead plaintiffs in the Second Consolidated Derivative Action filed a consolidated amended complaint on November 21, 2022. On February 10, 2023, defendants filed a motion to dismiss the Second Consolidated Derivative Action. The plaintiffs filed their opposition to the motion to dismiss on April 11, 2023. Defendant’s reply brief in further support of their motion to dismiss is due by May 11, 2023.
On July 21, 2022, the Maryland Court issued a memorandum opinion and order remanding the Kirst Action to state court. On December 6, 2022, the parties to the Kirst Action filed a stipulated schedule pursuant to which the plaintiffs were expected to file an amended complaint on December 22, 2022, and either (i) the parties would file a stipulated stay of the Kirst Action or (ii) the defendants would file a motion to stay the case by January 23, 2023. The plaintiffs filed an amended complaint on December 30, 2022. On January 23, 2023, defendants filed a motion to stay the Kirst action. On February 22, 2023, the parties in the Kirst Action filed for the Court’s approval of a stipulation staying the Kirst Action pending the resolution of defendants’ motion to dismiss in the Second Consolidated Derivative Action. On March 22, 2023, the Court entered an order staying the Kirst Action intendpending resolution of the Motion to file a stipulation and proposedDismiss in the Second Consolidated Derivative Action.
On August 30, 2022, the Mesa Action was filed. On October 3, 2022, the Delaware Court entered an order granting the parties’ request to temporarily stay all proceedings and deadlines in the Mesa Action pending the earlier of dismissal of the Sinnathurai Action or the filing of an answer to the operative complaint in the Sinnathurai Action. On January 9, 2023, the court entered an order granting the parties’ request to set a briefing schedule in connection with a motion to stay that defendants intended to file. Pursuant to the order, defendants filed a motion to stay on January 18, 2023. The plaintiff filed his opposition on February 8, 2023. Defendants filed their reply on February 22, 2023. On February 28, 2023, the court granted Defendants’ motion and stayed the Mesa Action pending the entry of a final, non-appealable judgment in the Second Consolidated Derivative Action.
Par Sterile Products, LLC ArbitrationOn December 7, 2022, the Acosta Action was filed. On February 6, 2023, defendants accepted service of the complaint and summons in the Acosta action. On March 9, 2023, the court entered an order granting the parties’ request to stay the Acosta Action pending the entry of a final, non-appealable judgment in the Second Consolidated Derivative Action. The financial impact of this claim, as well as the claims discussed above, is not estimable.

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On February 26, 2021, a Company stockholder named Thomas Golubinski filed a derivative complaint against members of the Company’s board of directors and members of senior management in the Delaware Court, captioned Thomas Golubinski v. Richard H. Douglas, et al., No. 2021-0172-JRS. The Company is deemed a nominal defendant. Golubinski challenged equity awards made in April 2020 and in June 2020 on the ground that they were “spring-loaded,” that is, made at a time when such board members or members of senior management allegedly possessed undisclosed positive material information concerning the Company. The complaint asserted claims for breach of fiduciary duty, waste, and unjust enrichment. The plaintiff sought an award of damages to the Company, an order rescinding both awards or requiring disgorgement, and an award of attorneys’ fees incurred in connection with the litigation. On May 10, 2021, the defendants moved to dismiss the complaint in its entirety. On June 17, 2021, the Company’s stockholders voted FOR ratification of the April 2020 awards and ratification of the June 2020 awards. Details of the ratification proposals are set forth in the Company’s Definitive Proxy Statement filed on May 3, 2021. The results of the vote were disclosed in the Company’s Current Report on Form 8-K filed on June 24, 2021. Thereafter, the plaintiff stipulated that, as a result of the outcome of the June 17, 2021 vote, the plaintiff no longer intends to pursue the lawsuit or any claim arising from the April 2020 and June 2020 awards. On August 23, 2021, the plaintiff filed a motion seeking an award of attorneys’ fees and expenses, to which the defendants filed an opposition. On October 18, 2022, the Delaware Court denied the plaintiff’s fee application in its entirety. Under a prior Delaware Court order, the case was automatically dismissed with prejudice upon denial of the plaintiff’s fee application. On November 14, 2022, Golubinski filed a Notice of Appeal in the Supreme Court of the State of Delaware. The plaintiff / appellant filed his opening appellate brief on December 30, 2022. The Company filed its responsive brief on January 30, 2023 and the appellant filed his reply brief on February 14, 2023. The financial impact of this claim, as well as the claims discussed above, is not estimable.

On March 29, 2022, Par Sterile Products, LLC (“Par”) submitted a demand for arbitration against the Company with the American Arbitration Association, alleging that the Company breached certain provisions of the Manufacturing and Services Agreement (“(the “Par MSA”) that the Company entered into with Par in September 2020 to provide fill-finish manufacturing services for NVX-CoV2373. On April 4, 2023 the parties entered into a Settlement Agreement and Release of Claims pursuant to which Novavax agreed to pay $27.0 million to Par, which was fully accrued for as of March 31, 2023. Novavax characterized the payment as a $15.0 million termination fee and a $12.0 million settlement payment. Because Par and its parent company, Endo International plc, are parties to Chapter 11 bankruptcy proceedings, the Settlement Agreement and Release of Claims and the payment due thereunder required, and subsequently received, approval from the bankruptcy court. The matter is atCompany has made the payment required by the Settlement Agreement and Release of Claims, and, subject to the non-occurrence of certain contingencies, the arbitration will be dismissed on or about July 13, 2023.

On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA based on Gavi’s failure to procure the purchase of 350 million doses of NVX-CoV2373 from the Company as required by the Gavi APA. As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses. On December 2, 2022, Gavi issued a preliminary stagewritten notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the potential loss is not reasonably estimable. While the Company maintainsGavi APA. Gavi also contends that, no breachbased on its purported termination of the MSA has occurred and intendsGavi APA, it is entitled to vigorously defenda refund of the matter, ifAdvance Payment Amount less any amounts that have been credited against the finalpurchase price for binding orders placed by a buyer participating in the COVAX Facility. As of December 31, 2022, the remaining Gavi Advance Payment Amount of $697.4 million, pending resolution of the matter is adversedispute with Gavi related to a return of the remaining Advance Payment Amount, was reclassified from Deferred revenue to Other current liabilities in the Company’s consolidated balance sheet. On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above. The Company filed its Answer and Counterclaims on March 2, 2023. On April 5, 2023, Gavi filed its Reply to the Company,Company’s Counterclaims. Arbitration is inherently uncertain, and while we believe that we are entitled to retain the remaining Advance Payment Amount received from Gavi, it is possible that we could havebe required to refund all or a material impact onportion of the Company's financial position, results of operations, or cash flows.
Generalremaining Advance Payment Amount from Gavi.

We are also involved in various other legal proceedings arising in the normal course of business. Although the outcomes of these other legal proceedings are inherently difficult to predict, we do not expect the resolution of these other legal proceedings to have a material adverse effect on our financial position, results of operations, or cash flows.
Item 1A.    Risk Factors

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Information regarding risk and uncertainties related to our business appears in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021,2022, which was filed with the SEC on March 1, 2022.February 28, 2023. There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K.10-K, other than set forth below.

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Risks Related to Regulatory and Compliance Matters

Our products might fail to meet their primary endpoints in clinical trials, meaning that we will not have the clinical data required to support regulatory approvals.
The steps generally required by the FDA before our proposed investigational products may be marketed in the U.S. include:
performance of preclinical (animal and laboratory) tests;
submission to the FDA of an Investigational New Drug Application, which must become effective before clinical trials may commence;
performance of adequate and well controlled clinical trials to establish the safety and efficacy of the investigational product in the intended target population;
performance of a consistent and reproducible manufacturing process at commercial scale capable of passing FDA inspection;
submission to the FDA of a Biologics License Application (“BLA”) or a New Drug Application; and
FDA approval of the BLA or NDA before any commercial sale or shipment of the product.

Clinical trials that we undertake in other countries will be subject to similar or equivalent processes and requirements. In Europe, as well as an authorization for the clinical trial itself, it is necessary to obtain the consent of a local ethics committee for each clinical trial site and to provide for publication specific information about the clinical trial and its outcome. If endpoints are not met, this information will be made publicly available and could be damaging to the reputation of the Company.

These processes are expensive and can take many years to complete, and we may not be able to demonstrate the safety, purity, potency and efficacy of our vaccine candidates to the satisfaction of regulatory authorities. The start of clinical trials can be delayed or take longer than anticipated for many and varied reasons, many of which are out of our control. Safety concerns may emerge that could lengthen the ongoing clinical trials or require additional clinical trials to be conducted. Promising results in early clinical trials may not be replicated in subsequent clinical trials. For example, the first batch of top line results from our Phase 2 CIC clinical trial evaluating safety and immunogenicity of different formulations of CIC and influenza stand-alone vaccine candidates, may not be consistent with top line results from subsequent batches in such trial. Regulatory authorities may also require additional testing, and we may be required to demonstrate that our proposed products represent an improved form of treatment over existing therapies, which we may be unable to do without conducting further clinical trials. Moreover, if a regulatory authority grants regulatory approval of a product, the approval may be limited to specific indications or limited with respect to its distribution. Expanded or additional indications for approved products may not be approved, which could limit our revenue. Foreign regulatory authorities may apply similar limitations or may refuse to grant any approval. Consequently, even if we believe that preclinical and clinical data are sufficient to support regulatory approval for our vaccine candidates, the FDA and foreign regulatory authorities ultimately may not grant approval for commercial sale in their applicable jurisdiction, or may impose regulatory requirements that make further pursuit of approval uneconomical in one or more jurisdictions. If our vaccine candidates are not approved, our ability to generate revenue will be limited, and our business will be adversely affected.

Risks Related to our Intellectual Property

Our success depends on our ability to maintain the proprietary nature of our technology.

Our success in large part depends on our ability to maintain the proprietary nature of our technology and other trade secrets. To do so, we must prosecute and maintain existing patents, obtain new patents and pursue trade secret and other intellectual property protection. We also must operate without infringing the proprietary rights of third-parties or allowing third-parties to infringe our rights. We currently have or have rights to over 560 U.S. and foreign patents and patent applications covering our technologies. However, patent issues relating to pharmaceuticals and biologics involve complex legal, scientific and factual questions. To date, no consistent policy has emerged regarding the breadth of biotechnology patent claims that are granted by the U.S. Patent and Trademark Office or enforced by the federal courts. Therefore, we do not know whether any particular patent applications will result in the issuance of patents, or that any patents issued to us will provide us with any competitive advantage. We also cannot be sure that we will develop additional proprietary products that are patentable. Furthermore, there is a risk that others will independently develop or duplicate similar technology or products or circumvent the patents issued to us.

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Although our patent filings include claims covering various features of our vaccine candidates, including composition, methods of manufacture and use, our patents do not provide us with complete protection against the development of competing products. Some of our know-how and technology is not patentable. To protect our proprietary rights in unpatentable intellectual property and trade secrets, we require employees, consultants, advisors and collaborators to enter into confidentiality agreements. These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information, which risk has been enhanced by the departure of employees in connection with our global restructuring restructuring and cost reduction plan.

Our vaccine candidates could become subject to a product recall which could harm our reputation, business, and financial results.

The FDA and similar foreign governmental authorities have the authority to require the recall of certain vaccine candidates. Manufacturers may, under their own initiative, recall a product if any material deficiency in a product is found. A government-mandated or voluntary recall by us or our strategic collaborators could occur as a result of manufacturing errors, design or labeling defects or other deficiencies and issues. For example, we have extended a credit of $64.7 million under the Australia APA for a single lot of NVX-CoV2373 doses sold to the Australian government that upon pre-planned 6-month stability testing was found to have fallen below the defined specifications and the lot was therefore removed from the market. Recalls of any of our vaccines or vaccine candidates would divert managerial and financial resources and have an adverse effect on our financial condition and results of operations. In addition, a recall announcement could harm our reputation with customers and negatively affect our sales, if any.

Risks Related to Employee Matters, Managing Growth and Information Technology

Given our current cash position and cash flow forecast, and significant uncertainties related to 2023 revenue, funding from the U.S. government, and our pending arbitration with Gavi, substantial doubt exists regarding our ability to continue as a going concern through one year from the date that the financial statements included in this Quarterly Report were issued.

Our management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued. At March 31, 2023, we had $636.9 million in cash and cash equivalents and restricted cash. During the three months ended March 31, 2023, we incurred a net loss of $293.9 million and had net cash flows used in operating activities of $325.6 million.

While our current cash flow forecast for the one-year going concern look forward period estimates that we have sufficient capital available to fund operations, this forecast is subject to significant uncertainty, including as it relates to the following:

Revenue: Our near-term revenue depends on our ability to successfully develop, manufacture, distribute, or market an updated monovalent or bivalent formulation of a vaccine candidate for COVID-19 for the Fall 2023 COVID vaccine season, which is inherently uncertain and subject to a number of risks, including regulatory approvals and commercial adoption. We experienced delays in early 2023 in manufacturing our BA.5 clinical trial materials, which has the potential to delay regulatory approval from the FDA for our vaccine candidate for the Fall 2023 COVID vaccine season. In addition, in January 2023, the U.S. Vaccines and Related Biologics Products Advisory Committee announced its intent to provide the industry with its strain protocol guidance in the second quarter of 2023 for the Fall 2023 COVID vaccine season. To meet potential demand for Fall 2023, we have begun manufacturing an updated COVID-19 variant strain-containing formulation prior to the availability of strain protocol guidance. If such formulation is not consistent with the strain protocol guidance, we will not be able to deliver the appropriate vaccine to our customers in sufficient quantities for the Fall 2023 COVID vaccine season and we will have incurred significant costs for a formulation that we will be unable to sell.

Funding from the U.S. Government: Our USG Agreement will expire by its terms in December 2023. We had anticipated that the U.S. government would extend the USG Agreement until the full $1.8 billion authorized amount had been realized. In February 2023, in connection with the execution of Modification 17 to the USG Agreement, the U.S. government indicated to us that the award may not be extended past its current period of performance. If the USG Agreement is not amended, as we had previously expected, then we may not receive all of the remaining $336.4 million in funding we had previously anticipated pursuant to the USG Agreement.

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Pending Arbitration: On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration regarding an alleged material breach by us of the Gavi APA. The outcome of that arbitration is inherently uncertain, and it is possible we could be required to refund all or a portion of the remaining advance payments of $697.4 million. See Note 3 and Note 15 to our consolidated financial statements in Part I, Item 1, “Financial Information” of this Quarterly Report on Form 10-Q for additional information related to the arbitration with Gavi.

Management believes that, given the significance of these uncertainties, substantial doubt exists regarding our ability to continue as a going concern through one year from the date that these financial statements are issued.

Our ability to fund Company operations is dependent upon revenue related to vaccine sales for our products and product candidates, if such product candidates receive marketing approval and are successfully commercialized; the resolution of certain matters, including whether, when, and how the dispute with Gavi is resolved; and management’s plans, which include resolving the dispute with Gavi and cost reductions associated with the restructuring of our global footprint. Management’s plans may also include raising additional capital through a combination of equity and debt financing, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements. In May 2023, we announced a global restructuring and cost reduction plan. This plan includes a more focused investment in our NVX-CoV2373 program, reduction to our pipeline spending, the continued rationalization of our manufacturing network, a reduction to our global workforce, as well as the consolidation of facilities and infrastructure. New financings may not be available to us on commercially acceptable terms, or at all. Also, any collaborations, strategic alliances, and marketing, distribution, or licensing arrangements may require us to give up some or all of our rights to a product or technology, which in some cases may be at less than the full potential value of such rights. In addition, the regulatory and commercial success of NVX-CoV2373 and our other vaccine candidates, including an influenza vaccine candidate, CIC vaccine candidate, or a COVID-19 variant strain-containing monovalent or bivalent formulation, remains uncertain. If we are unable to obtain additional capital, we will assess our capital resources and may be required to delay, reduce the scope of, or eliminate some or all of our operations, or downsize our organization, any of which may have a material adverse effect on our business, financial condition, results of operations, and ability to operate as a going concern.

Our announced global restructuring and cost reduction plan may not result in anticipated reductions in combined research and development and selling, general, and administrative expenses and may disrupt our business.

In May 2023, we announced a global restructuring and cost reduction plan. This plan includes a more focused investment in our NVX-CoV2373 program, reduction to our pipeline spending, the continued rationalization of our manufacturing network, a reduction to our global workforce, as well as the consolidation of facilities and infrastructure. The planned workforce reduction includes an approximately 25% reduction in our global workforce, comprised of an approximately 20% reduction in full-time Novavax employees and the remainder comprised of contractors and consultants. We expect the full annual impact of the cost savings to be realized in 2024 and approximately half of the annual impact to be realized in 2023 due to timing of implementing the measures, and the applicable laws, regulations, and other factors in the jurisdictions in which we operate. We expect to record a charge of approximately $10 million to $15 million related to one-time employee severance and benefit costs, the majority of which is expected to be incurred in the second quarter of 2023 and are evaluating the anticipated costs related to the consolidation of facilities and infrastructure.We may not realize, in full or in part, the anticipated benefits, savings and improvements in our cost structure from these efforts due to unforeseen difficulties, delays or unexpected costs. If we are unable to realize the potential development progress and cost savings from the global restructuring and cost reduction plan, including the reduction to our global workforce, our business strategy, operating results and financial condition would be adversely affected. Our workforce reductions could yield unanticipated consequences, such as attrition beyond planned workforce reductions or disruptions in our day-to-day operations. Our global restructuring and cost reduction plan, including the reduction to our global workforce, could also harm our ability to attract and retain qualified management and development personnel who are critical to our business. If we are unable to realize the expected benefits from the restructuring and cost reduction plan, we may decide to undertake additional workforce reductions.

If we are unable to attract or retain key management or other personnel, our business, operating results and financial condition could be materially adversely affected.

We depend on our senior executive officers, as well as key scientific and other personnel. The loss of these individuals or our failure to implement an appropriate succession plan could harm our business and significantly delay or prevent the achievement of research, development or business objectives. Turnover in key executive positions resulting in lack of management continuity and long-term history with our Company could result in operational and administrative inefficiencies and added costs. These risks have increased since our global restructuring and cost reduction plan and related workforce reduction implemented in May 2023, which increased the risk that we will lose technical know-how or other trade secrets as experienced personnel depart.

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We may not be able to attract qualified individuals for key positions on terms acceptable to us. Competition for qualified employees is intense among pharmaceutical and biotechnology companies, and the loss of qualified employees, or an inability to attract, retain and motivate additional highly skilled employees could hinder our ability to complete clinical trials successfully and otherwise develop marketable products.

We also rely from time to time on outside advisors who assist us in formulating our research and development and clinical strategy. We may not be able to attract and retain these individuals on acceptable terms, which could delay our development efforts.


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Item 6.    Exhibits
3.1
3.2
3.3
3.4
10.1*±
10.2
10.1*±10.3
10.2*±10.4*
10.5
10.6
10.7
31.1*
31.2*
32.1*
32.2*
101The following financial information from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022,2023, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) the Consolidated Statements of Operations for the three-month periods ended March 31, 2023 and 2022, and 2021, (ii) the Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, (iii) the Consolidated Statements of Comprehensive Income (Loss) for the three-month periods ended March 31, 2023 and 2022, (iii) the Consolidated Balance Sheets as of March 31, 2023 and 2021,December 31, 2022, (iv) the Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three-month periods ended March 31, 20222023 and 2021,2022, (v) the Consolidated Statements of Cash Flows for the three-month periods ended March 31, 20222023 and 2021,2022, and (vi) the Notes to Consolidated Financial Statements.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Filed or furnished herewith.
±    Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NOVAVAX, INC.
Date: May 9, 20222023By:/s/ StanleyJohn C. ErckJacobs
StanleyJohn C. ErckJacobs
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 9, 20222023By:/s/ James P. Kelly
James P. Kelly
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)



















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