NVAX - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to Novavax' First Quarter 2018 Financial Results Conference Call. [Operator Instructions] And as a reminder, this conference is being recorded.

Now I'd like to turn the conference over to Erika Trahan, Investor Relations. Please go ahead.

Erika Trahan

Thank you, operator. everyone. afternoon, Good Trahan, at Erika of and Investor This Senior Relations Novavax. Public is Manager like for financial I to thank to would everyone quarter operational discuss joining XXXX highlights and results. first call today's our earnings and be novavax.com, archive available A press our audio release is available later website an call on conference this website currently of on at our will of today.

President Chief Greg call CEO, Financial Trizzino. Stan Officer with our Joining Glenn; Chief and Erck; Dr. Development, our President me of is on Officer, and Novavax's Business today's and and Research along John

performance, development remind our that statements financial other statements it clinical meaning Act. milestones and Before remarks, Stan time. could commercial financial forward-looking these of usage turn operating to we begin matters, conditions which I'll and prepared change now business-related to Private over teleconference and to uncertainties, forward-looking business relating the will I include the Novavax Securities expectations the forward-looking cash or and call. need Litigation making strategies Statements Reform numerous assumptions, today's regarding to clinical revenue, or are statements future projections. that you and within begin be financial, risks including that over anticipated expenses, we to subject during or cautions are

Stanley Erck

financials. to programs I'll with trial, lead our an John last will least, start earnings Greg contributors but Flu. and some our Welcome Prepare call. the on call brief. fairly report of To our importance our RSV provide and on will global XXXX Erika. in first quarter commentary this update Thanks, the to the then of not be set your will expectations, status on

emphasize our are updates Flu last product is presented we're on important presentations content RSV at presentations we during of our Annual in see These call. that so Congress last questions will these Since course, are the call, answer what any represents So the review happy available let's today's won't their for candidates. of best-in-class What but, portion started. Vaccine our Q&A World I and you'll website, here, to we get what of month. your believe programs we both

Additionally, to F of on F of occurring to RSV Based Vaccine expect our clear likely first RSV achieve our the RSV being many years. regard to Vaccine, throughout to have seems market. advantage vaccine exclusivity understanding a world, with to with we expected the for continue our developments we

on via to III is Focusing Prepare, RSV progress which make Phase our in maternal continue our immunization. infants we for trial F the Vaccine, substantial clinical

analysis this for With number believe interim the including the analysis active enrollees. December we important target information the X,XXX participants Heading program, we we'll III which an placebo achieved to the X was enrollment that of totaled milestone the vaccinees arm, last successful Novavax. announced Phase after X,XXX of and infant this a is trial, prespecified enrollment we Prepare efficacy last trial, this born. in months ready in be that we Following this significantly Monday, de-risked announced which, conduct

marketing will and first readout Agency. during U.S. analysis to the quarter RSV our for Prepare the the is obviously trial licensure expectation analysis element form the We interim first that applications the to Vaccine. Medicines of the our critical the results interim conclude allow pathway is our European Currently, report and basis FDA efficacy XXXX. to a the with the on F of in Prepare expect for Conducting quarter will the our us trial of

by granted this Track indication filing has Fast targeting by these the Vaccine Designation are the I XXXX. of first We our marketing RSV F applications quarter remind that been FDA. currently you for

position the market in about a that of our our competitive couple take talking minutes prospective here I'll to program, review the RSV I'm market. of While and F Vaccine opportunity

is income in least As any becomes infants We remains bigger given this me it with to say the all of for mortality when RSV RSV there to billion a an RSV the infant obviously, and of morbidity $X.X much believe And, you market disease in vaccine due countries. medical treatment associated in we once gets rest the the prevent market significant the vaccine at urgent ill. heard or to unmet global that opportunity in consider the higher geographies. world, infants an need before, absence any

We Practices, important ACIP, expect Advisory from CDC's recommendations that receive shortly or Committee on FDA the we Immunization after will approval.

be future. first-to-market for will first-in-class. As be and, And thus, earlier, that I by will will expect our we definition, exclusivity continue said vaccine foreseeable the

that given the expect vaccines. to level compliance uptake, is be and high, high of vaccine ACIP uptake a also there similar disease recommendations a high pediatric of will pediatric there vaccine We is with that for burden this

Moving our on to program. NanoFlu

older flu Fluzone trial In last call, to Phase for urgent NanoFlu? the our in with showed upcoming FDA is Repeated, for back seasons months. As to design I/II What's few February. hospitalizations Phase next effectiveness the HXNX our line in we levels the of reported Phase compared flu plan with this this improved demonstrated the over HXNX immune discuss in significantly need vaccine. the U.S. XXXX-'XX recent the earnings responses associated We superior and evolved in tested immune against number NanoFlu of high scheduled Phase flu that when in the We've begin years. demonstrated strains XX% better, next to compared for we Fluzone we responses trial, data trial the the detailed for antibodies hospitalizations the of against vaccine improved have was low flu in positive II vaccine High-Dose adults. strain, roughly highlight which and I/II more fall. effective clinical High-Dose, market-leading top trial flu-related results season several to The II

the unadjuvanted trial in used effect the I/II our doses. expect and quadrivalent to adjuvant II important adjuvanted effect trivalent We Matrix-M two, trial. the vaccines explore And comparing Phase will the Phase of our One, X issues. compared formulations of by

We year. expect line quarter II top the the to Phase of first trial data from announce during next

to II And to discuss Phase initiate Prepare schedule the for some will meeting for we an Phase trial FDA interface Following of with over our III second that data, to of half hope that, I'll the the the XXXX. pivotal the Greg we to our plans the in with trial. and trial, availability about comments turn call

Gregory Glenn

immunization, us our goal regards importance a we've Thanks, parties Phase afternoon, RSV highlight to truly to Stan, the for of of With Prepare is milestone III take the thank United hospitalization the It and infants leading and everyone. maternal against a the protecting few reached and want that recently via minutes infants involved. the brings good of disease, to States. enrollment trial infant historical this I cause achievement closer to in

to pregnant States. We within in volunteered These of women safety women RSV being XX vaccine the they for X,XXX against an the enrolled have are for trial over sites vaccine disease. studied women than infants efficacy which and United and XX investigational more in including receive both countries, their

the sentimental implementation As Safety dedicated I've take independent thank RSV our opportunity Data to discussed carefully by At before, the the Board. being safety Safety the I by monitored well-known assisted over and experts is of this to are Monitoring years. these in across globe, who I the this trial X.X the the many the want moment, monitored F thank staff of at have experts. experienced Data sites Monitoring which Board, of on an Vaccine safety past RSV of and run and volunteers also the

protect to their Foundation thank and and Bill share trial. for RSV babies. for to visionary and support the consequences a Gates I'll review associated thank financial participated with serious disease & Melinda with in They to call the wish to prevent I future now who John infants licensed of this also program. available the a want vaccine results And newborn in our the finally the importantly, vision women turn PATH quarter. Trizzino disease both of this We this over against most to

John Trizzino

results wanted summary can some to of financial Today, quarter today's A first of results. components highlight in press XXXX. found you, key release, for of Thank announced Greg. financial I but our the statements be our we

for by the XXXX. in to under increased same Revenue by year-over-year $XX million quarter, $X.XX under mainly increased in $XX.X compared agreement. Foundation compared higher Prepare million given grant, the revenue loss per of the net net the the Phase quarter in first For $X.XX offset million Bill Melinda net recorded grant share associated or & period R&D increased higher in was III the or quarter in Gates a trial, due increase $X.X of revenue $XX.X trial. the to to Foundation enrollment loss was recorded share a The loss we million driven per Prepare increase This $X.X with XXXX. Gates million the partially of to spending XX%

is the As the trial. you Foundation operating activity Melinda know, & to Gates the revenue related in Bill Prepare directly

due XX% the XXXX $X.X revenue to III increased net development quarter We R&D expenses continue the at as of the associated in $XX.X million to trial. essentially the expenses to in Prepare loss Phase a million result G&A Related relative in level BMGF again, the of the in the expect trial. for quarter. with increased activities, activities to Prepare were increased flat our to an increase quarter, in XXXX

public impacted Wyeth million and activities $XX quarter not offering. XXXX the the to adoption quarter in and cash quarter which termination Road million million standard, cash cash cash of not usage XXXX, approximately respectively. payment which last a accounting equivalents, beginning facility, the our XX, quarter by primarily approximately include occur cash fee $XX million This which the a included payment compared for of $XXX.X balance activities balances As of does ending in of on a -- requires included our our $XX.X first due annual securities used increase cash $X of of employees, operating the did the cash was million in to by March $X first lease increased in cash an also new XXXX, change first lease restricted bonus year. of cash the Net usage through flows. of $XX.X and proceeds the to million payments and be of ending was used accounting restricted million statements XXXX. XXXX This our to and that operating cash, raised in in first to and The one-time of was marketable for had the Clopper April Novavax in sheet, in net

cash to expect of used subsequent quarter financial first review. significantly to to Stan. the for back activities This call my concludes compared XXXX. XXXX over the of turn in as We decrease the quarters now our operating I'll

Stanley Erck

execute to I'm XXXX Flu. milestones. and RSV on particularly We up our Q&A? John. for of to prospects excited you Q&A. it and about against and regard forward programs up Thanks, here look Operator, our the we remainder with beyond, and updating open in lead and our progress as our wrap our continue key We'll pipeline to it X to

Operator

with Instructions] [Operator Our from question Beatty Citi. first Joel

Unidentified Analyst

This event Joel. is initial a Sean I for expectations? the for in your rate Phase line here. Is got with the III few in calling

Stanley Erck

our Yes, we in it's don't share information, line expectations. specific but with

Unidentified Analyst

And on other color continuously trying of point then more thresholds? the that. your for those endpoint. specific during or understand a RSV Can little then pulse Are oxim time at detected better you hospitalization? about sensitivity And assessed a often bit respiratory during I'm how pivotal PCR Great. respiratory bit infections? also just to is via talk

Stanley Erck

Okay.

start the back. let's at So

it's works passive so symptom not that in hospital. the trial any the way been seen by the has infant a active the in and has that site, surveillance So is

aside, swab. and symptoms step the pulse clinicians oximetry. the the of illness, do for and signs respiratory infant using to measure respiratory will examine tract So lower and rate there They assess

contacting data specific the the collected mother, how within infection they're the by who to have subject, is or our site us and for that's going said So the call they time. either

question think just pardon the And endpoints clear remind I collected. about question, that me? be first was, to So how are that's me,

Unidentified Analyst

of detected RSV other respiratory infections? via PCR is whether Curious during

Stanley Erck

when we of Well, I'm so do multiple obviously, ideologies I ex-PCR not viruses. mean, respiratory multiple I are other infections, organ multiple sure. and say we you there other mean, for infection, -- respiratory do

second that see since manifestation been of of do is leading of hospitalization So, the mortality. cause infant hospitalizations leading or so -- disease, cause of we U.S., in clinical global as of cause a the the RSV course, and infant leading it's

Unidentified Analyst

on then update. final quick enrollment That's one helpful. one question, And as my just the

to will enrollment, With this analysis? the final? the XXX% additional will Or enroll continue be interim to women offer you

Gregory Glenn

and that the we've X,XXX No, what we And obviously, our we X,XXX. is born start follow that. and enrollment, is -- the upon we is, will meet our when beyond paused -- we our stop we so now we all is days the, is we expectation baby the stop interim last analysis know our now so and BLA. expectation of stopped we based rate far at want until know -- expectation to our that from is, XXX preparing formally that that open what the know and we observed -- infection trial And expectation

preparing think BLA our before that In fact, we'll start I date.

Operator

Kevin next with Our from DeGeeter question comes Ladenburg.

Kevin DeGeeter

just remind you know on the us a do of So assessing you about questioning -- go about rate kind can a or much run event prior rate Greg, you here. follow-up unblinding? of how just how the to line

Gregory Glenn

Yes.

our We So samples. the track central surveillance. -- to we lab, so see performance PCR are we of positive PCRs sent

we're in PCR they went, that positive. We know category able track are are blinded, so but to cases we the which don't

Kevin DeGeeter

clarification. Perfect. Appreciate the

Gregory Glenn

well, we're -- well. believe surveillance which sites lot it A do going very performing has doing -- with we that to sure it's and our are be of to

Kevin DeGeeter

then is, mentioned to working which enrollment remain things of kids? level And sort as John. a And completed of beginning one until and particular levels. more, just Prepare? year through lower up QX R&D, about that work I majority at the -- one from second after its that cash guess, the is we XXXX in for we Great. half follow plateaued of But down the in way should about these on of completion go this you think as -- mothers reported the of will Should

John Trizzino

decrease remarks, over mentioned know, do quarters see cash give for the to on significant of we year. specific in don't subsequent guidance a You my balance But the burn. as expect Kevin, the I we

attributed of R&D to so reduction, that's be expenses. going of the to And mostly kind

spending I balance the an 'XX. of be our So think give indication we to that's enough through kind you of to expect of what

Operator

Our George next with question comes Riley. from Zavoico B

George Zavoico

to from is the with rate, that of be to rates for the going year-to-year? the low? regard that RSV for because now regard Or evidence opposed and years, the event varied to trial enrollment X have or population elderly? there attack the is your With really is some any -- infant is on there high, it tracking of this for evidence important as Some X

Stanley Erck

even. a Yes, global think I pretty it's trial. It's

trial, kind of global much which and frame expectations. trial the But seeing merits small very the southern a we're conducting we the it's have trial, So all in of in regions, is I season. our variance line some time so tropical have is which northern, across the rate, we're with think a attack

George Zavoico

That's the the be Good to And preparing already regard NanoFlu II, correct?? Okay. you're the vaccine? -- already And and with good. know right? the quadrivalent, that Phase vaccine, hear. to the Is to strains that's you going manufacturing

Gregory Glenn

Yes. great. That's

George Zavoico

And against just clear, be to Fluzone, be quadrivalent then it'll right?

Gregory Glenn

correct. We'll... That's

Stanley Erck

the to compare comes in we'll be to against it'll But they trivalent, adults. Fluzone compare it it If whatever the to then out. Well, we continue ship market-leading trivalent. vaccine older

George Zavoico

confidence use going that -- that vaccine And high vaccine on? Okay. the And that for question effective base in women. ACIP to What in a the follow already know do on to to the finally, the XX% vaccine as trimester you of mentioned you recommend to is if third it's be that, XX of recommendation? within range. it's part range pregnant I expected recommend going low you is XXX% hope level that to in the ACIP a Would be XX% per in there high I range? to that confidence the efficacy. up range still is But of higher between -- mean, as

Stanley Erck

Yes, George, Stan.

is couple So yes, things. based our a expectation of on

CDC, progress up ACIP RSV ago for of in So They, vaccines. the adult specifically working started both a because ACIP, we're of the when we program. couple of these Novavax's with working a set doing older years the group

is for tradition approved tell really XXs. to to know the the the the in picked by we've XX but of vaccine the -- the they're them. ACIP, vaccines. you above today, by that well. They the going We approved not familiar that vaccines ACIP We talked recommended FDA. anything so with the know positively get number, Because get ACIP. once to believe know be they other And we're threshold by us, recommend that We we would and to

that I -- don't approved. know, if that not they FDA has ACIP has approved, So any, the

Gregory Glenn

Greg I is this there a George, need very also, chime medical it's no to in, where is specific treatment. think unmet large

And secondary And the very But be know, it'd think so important all it this right. as collecting endpoints, the seen meet think and we lower be efficacy, positively. of -- the data you end we those to would is going we an -- then I are so important. totality of

think correct, Stan I are part will whole of I if set, the recommendation. think, at endpoint is secondary as data important they'll recommend it. data their collecting so we again, look well, as they But

George Zavoico

John, just enrolling stopped in following finally, patients. -- you're And now your Prepare, Okay. so

So in expenses NanoFlu the period. But decrease the that starting that and trial clearly R&D contributes II also operating to Phase you're same in expenses.

the of So the for because small, NanoFlu. savings trial to than that NanoFlu trial going what you size be us remind fairly more is Could right? increase just going cost And much expect you to the is be? be that's the to cost

John Trizzino

again, So trials we total and other the R&D on have that, for guidance we cost each we a George, or of don't won't would year. burn, decrease the but that expenses cash in we that offset specific give are, expected

you first remaining in that see that quarters, quarter. remarks, my the as as we're compared see in I subsequent XXXX over well, will mentioned quarters in significant Kevin and quarter, the a going I X questioned think to the as reduction to

Operator

Piper question Jaffray. Our Tenthoff with comes next from Ted

Ted Tenthoff

we happens follow-up? the be you might steps birth positive then if to how the that? the are and And are accelerate be think the on going steps data with BLA? to a you is you're vaccine. and the hope we take step you RSV file And through the what back. data, side data, Greg, do us of positive guys Well, data? I What assuming will to assuming wondering Stan When collecting what final was positive do So assuming how far walk for quickly you can And that? able could

Stanley Erck

Yes, Stan. Ted, question. is for This the thanks

now we're is -- been this baby we've right what the So peak X,XXX hasn't because now is got actually, -- yet. the well, our just doing data following are into collection born of we now

out because peak. we'll think kids by fourth thereafter, the you of will your of process the we've been as the get day then the data be X the to from quarter, And last lieu process of end trial X about X-year and more in all October it be month and at people A. the at -- kids out dropping past be every dropping done in quarter and So this And they of go up cleaning X. this X, November, now time get we year and year throughout down years than by X working will year

by times that's XXX so the and up of is, the we it but won't to reaches X,XXX shortly So when we'll days be game stay last And open process. all have it That's -- is kid. then And a last be very the there, we clean data after days. our to We'll what ahead we baby the people is from XXX born, it after to like it so then. trying the get child down right? end, last a to be the

had very informational analysis. because So right what expectation now do we've Our positive expect? is

in our data, is so rates that the had begun. those we are are up on we what planned We already expectations and the have and And so what line our will do open high. -- we'll trial we design, attack when seen with have for

not have activities BLA fact, the we'll meeting data, BLA, just going first obviously. into shortly, to In that and go the clinical all our planning start very so we're

year. filing some get the from the during trial going we'll in as the And be ahead much And into as possible. starting efficacy game of so be all the and safety incorporating that quarter first to we're -- we'll of data Prepare next BLA time

process as quickly incentive, as We XXXX. make to obviously, have grow that possible every during

expectation And the I have Track. market first this the the filed have Fast XXXX, BLA. we will set think our have of we quarter we -- to by

Meeting that ACIP products And be following after XXXX, or approval. during June means very the So we'll time, we'll a directly the all ACIP during go approval have the and somewhere, to and activities doing our all and FDA then start after launch go has FDA expectations manufacturing first to to ACIP, we'll which shortly we'll year, February, approval. October some Xx time and

Ted Tenthoff

to All do, right. that's go it. Well, of work really to through but lot helpful

Stanley Erck

It's to be all good work done.

Operator

Seaport. with Our next question comes from Vernon Bernardino

Vernon Bernardino

I said have number just definitely maybe point, Is questions. George's your, as and At surveillance said so you're far you the attack that an rate? wanted attack expectations. follow-up line getting that rate data think, with implied in I a on is you idea you that this to the there your

Gregory Glenn

to what X% about I'm would is we it's we months analogue, No. is And normal age. within there, hospitalization. of X% the which the in range X respect say to With literature think to attack a the rate, under referring infants for

Stanley Erck

-- in monitor placebo know infections So we that Vernon, we we result versus illnesses, active. monitor but don't

the make certain of globally it's it's but in rate have to is what give we -- have RSV hard which some expectations, a is the we can do To know attack tracking the for hard is population. is we -- rate with our surrogate, us infection is right, Greg trial But a to assumptions hospitalizations. and idea exactly So literature. have what

Operator

in I'd for like no Mr. further queue, over show to Erck turn closing it questions so remarks. to back I

Stanley Erck

important X of Thanks, most probably which of Okay. for everybody. is the big vaccine the RSV. our milestones, the position these in RSV leadership This because are an need -- RSV and very is

so we pathway. point would able on you. envelope, we're of be And we we're before think excited by open up a that now it's And to a got so did. now the have time I get wouldn't Thank skeptics we to We told matter that us to to and be and excited.

Operator

conference. you. conclude that today's your Thank gentlemen, Thank participation. Ladies does you very and much for

a Have wonderful You may day. disconnect. all

Novavax (NVAX) 9 May 182018 Q1 Earnings call transcript