Good day and welcome to the Novavax First Quarter 2021 Financial Results and Operational Highlights Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Silvia Taylor, Senior Vice President, Investor Relations and Corporate Affairs. Please go ahead.

Good afternoon, and thank you to everyone who has joined today's call to discuss our first quarter 2021 operational highlights and financial results. A press release announcing our results is currently available on our website at novavax.com. An audio archive of this conference call will be available on our website later today. The presentation slides we will be using for this call are all on our website in the Events section. Joining me today are Stan Erck, President and CEO, who will provide an overview of our progress in the first quarter as well as updates on the regulatory time lines in our manufacturing scale-up. Additionally, Dr. Greg Glenn, President of Research and Development, will provide an update on our global clinical development. John Trizzino, Chief Commercial Officer, Chief Business Officer and Interim Chief Financial Officer, will provide an update on our supply commitments and financial results for the quarter. Additionally, Dr. Filip Dubovsky, Chief Medical Officer, will be available for the Q&A section at the end of today's call. Before we begin with prepared remarks, I need to remind you that we will be making forward-looking statements during this teleconference that could include financial, clinical or commercial projections. Statements relating to future financial or business performance, conditions or strategies and other financial and business-related matters, including expectations regarding revenue, operating expenses, cash usage and clinical development and anticipated milestones, are forward-looking statements within the mandate of the Private Securities Litigation Reform Act. Novavax cautions that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. I would now like to hand the call over to Stan. For those of you following the accompanying slides, please turn to Slide #3.

Thank you, Silvia, and thank you to everyone for joining us today. In the first quarter, we built on our many achievements of 2020 -- every aspect of our business. I'm proud to say we remain tireless in our efforts, delivering on key clinical milestones, advancing efforts to ready our global supply chain for commercialization and progressing 2373 towards regulatory authorization around the world. I'd like to begin today's call by first providing a recap of some of our key achievements in the first quarter, including the fall. We announced both interim and final analyses in our South Africa Phase IIb and U.K. Phase III trials. We demonstrated 2373's favorable safety profile, immunogenicity and outstanding efficacy against multiple strains of COVID-19. We continue to advance our PREVENT-19 pivotal Phase III trials in the U.S., including expanding the study into pediatric populations. We initiated multiple crossover and booster arms in order to refine our visitor strategy, which will be key to our future. We leveraged our platform to advance the development of both our variant strains combination vaccines into preclinical studies. In our global supply chain, we expanded our global presence with new manufacturing agreements as well as advancing our existing partnerships. We successfully began GMP manufacturing at commercial scale at all of our sites. We secured additional supply agreements including finalizing an APA with Gavi for a commitment of 1.1 billion doses to address global equitable access to our vaccine in partnership with the Serum Institute of India. We'll talk later about this. We progressed our dialogue with regulatory authorities globally, making significant progress towards completing CMC and the remaining clinical requirements. Today, we are pleased to share more details on our recent progress. I will ask other members of our management team and talk about our clinical progress and plans, about the status and expectations that we have for advanced purchase agreements during this pandemic period, stretching over the next couple of years, and about our financial performance in the first quarter. Then I'd like to take back the microphone to cover a couple of important areas. Point 1, I'd like to update our guidance on a couple of near-term deliveries that we get daily questions on. And point 2, I'd like to start focusing the attention of our investors on what the mid to longer term outlook looks like for Novavax. It's a picture that is very compelling. With that, I would now like to hand it over to Greg Glenn to discuss our clinical developments in the first quarter. He'll be followed by John Trizzino and then all rejoined.

Thanks, Stan. Turning to Slide 4. In the first quarter, we made excellent progress in advancing 2373 through our various clinical trials. As Stan mentioned, we announced both interim data and final analyses for our South Africa Phase IIb and U.K. Phase III trials, rapidly completed our enrollment of our PREVENT-19 Phase III trial and initiated a number of other studies building on the excellent safety and efficacy data generated to date. In the next few slides, I will give an overview of these key clinical developments from the quarter as well as discuss our upcoming clinical milestones. Beginning with our South Africa Phase IIb trial on Slide 5. In the complete analysis from this trial, which included over 4,400 participants, 2373 achieved its primary endpoint, demonstrated overall efficacy of 48.6% and efficacy of 55.4% amongst HIV negative trial participants. We also confirm II/III efficacies against the B.1.351 variant first identified in South Africa, demonstrating approximately 51% efficacy against mild, moderate or severe disease against this variant in HIV negative participants. Importantly, there were no severe cases in the vaccine group and 5 severe cases, including 2 deaths, in the placebo group. Four out of 5 were due to the variant of concern, B.1.351. Last week, full results from our South Africa Phase IIb study were published in the New England Journal. Now moving to Slide 6. You can see a summary of results from the final analysis of our U.K. Phase III trial, which included over 15,000 participants. In this trial, 2373 achieved its primary efficacy endpoint, demonstrating overall efficacy of 89.7%. The final analysis also confirmed 2373's high efficacy against multiple variants of COVID-19, demonstrating 96.4% efficacy against the original COVID-19 and 86.3% efficacy against the B.1.1.7 variant, first identified in the U.K. The final analysis also showed…

Thanks, Greg. Turning to Slide 15. You can see a snapshot of our global supply commitments to date as well as our licensing agreements. With this as a backdrop, let me state that in the quarter, we saw that the urgency to make 2373 available globally only intensified amidst the backdrop of the evolving COVID-19 pandemic. Today, there continues to be a vast need for equitable distribution of COVID-19 vaccine. While the U.S. has fully vaccinated 35% of all adults greater than 18 years of age, demand outside the U.S. far outpaces supply. This unmet demand across the globe reinforces the importance of bringing our vaccine to market and has resulted in continued demand for 2373 now and through 2022, which we believe reflects the continued confidence in 2373's ability to combat the pandemic. Our commitment to the principles of fair and equitable access to 2373 that includes supplying vaccine to low-, middle- and high-income countries remains at the core of our values. In light of this, we were happy to announce last week the finalization of an advanced purchase agreement with Gavi, expanding upon our memorandum of understanding announced in February. Under the agreement, we have committed cumulative 1.1 billion doses of 2373 through the COVAX facility. We expect to manufacture and distribute 350 million of these doses, utilizing antigen and adjuvant manufactured at facilities directly funded by previous investments from CEPI. Under a separate agreement with Gavi, Serum Institute will manufacture and distribute Novavax licensed product for the remaining balance of the 1.1 billion doses for low- and middle-income countries participating in the COVAX facility. Together with Serum, we expect to begin delivery of doses in the third quarter of 2021, dependent on the appropriate regulatory authorizations. In the first quarter, we also finalized an advanced purchase agreement…

Thanks, John. Okay. So let's turn to slide 17. And on this call, we've reviewed a long list of recent successes, including their clinical safety and efficacy data. Now I'd like to talk about the near and midterm focus of the company. And I'd like to start by addressing the questions that we get asked every single day with the goal of updating our guidance for the short term. First question we always get is when can we expect to see the results from the U.S. Phase III efficacy trial? The second is what is the timetable of regulatory filings in the various parts of the world? And the third is what is the trajectory for scaling up our manufacturing on a global basis? Let me take them one at a time. Unblinding U.S. Phase III trial -- let's start with the timing of the U.S. Phase III trial. So please turn to Slide 18. We have previously guided that we expect to unblind the trial in the second quarter of this year. And based on the timing of the unblinding of our South African and U.K. trials, I think that a lot of people have an expectation that we might be able to unblind the trial in April. But instead, we initiated a blinded crossover in this trial in April for which we show the study design on the slide. We believe implementing the crossover and thus bypassing an interim unblinding will actually give us a comprehensive data set more quickly. This gives us the ability to collect more cases, increasing the robustness of our data set when measuring efficacy against factors such as severe disease and against variants. We continue to guide that we will announce our Phase III clinical data in the second quarter. We look forward…

[Operator Instructions] The first question comes from Kelechi Chikere with Jefferies.

Just a couple on my end. I guess, first, can you give us an idea or additional color on how much vaccine that you have actually stockpiled? And I guess also related to that, how much are you actually producing per month currently?

Yes, it's a good question. This is Stan. And it varies quite dramatically by site, by month as we either have raw material supplies or not. We -- as I mentioned to you that in the third quarter, we had expected to be able to produce roughly 70 million or 80 million doses per month at the Novavax sites, excluding Serum. And I would guess that we're probably in half that right now. We've made 30 million or 40 million doses on the shelf and it's getting larger every week.

The next question comes from Charles Duncan with Cantor Fitzgerald.

Team, congrats on a good quarter of progress. Thanks for taking my questions. I have a couple of them. The first is, I'm wondering if you can provide any additional color on the U.K. emergency use authorization? And then secondarily, maybe a perspective on emergency use authorizations versus, say, full authorization. I guess, I'm wondering, do you prefer to stick with an EUA approach for countries outside the U.K. and others that you filed? Or would you pursue a full authorization?

Okay. Yes. So U.K. -- U.K. has been -- we've worked closely with a lot of these groups. U.K. we've had the most dialogue with and I think the expectation we had -- always had was that we would try to get a filing into the U.K. with the full CMC and clinical package by the end of June. That's now moved into July. I think the MHRA is paying close attention and is likely to be the first approval and authorization, I guess, is the right word. And so it could be others like Korea just at the same time, I think.

And just as far as the EUA versus final approval, we think that emergency use of conditional authorization is on the route to getting full approval. And that's just because the safety data needs to mature to have a complete package to allow for final approval.

Yes. So everything we're putting in for the EUA is relevant to the BLA.

And then moving on to PREVENT-19. In terms of the crossover, could you just help me think through kind of the strategy there? It seems like the crossover eliminates the control arm. And I'm just really wondering what you're hoping to learn from the crossover? Or is it just a way to increase the number of patients that have been exposed to full -- fully vaccinated?

Yes. So the situation in the PREVENT-19 study was complicated by the fact that a lot of emergency use vaccine was made available in the U.S. and the U.S. public health system was advocating its use. So for us to maintain the integrity of the study, we had to take on a strategy where we would provide vaccine to all the participants. And the most rational way to do that would be through a crossover. This allows us to also look at waning of protection by comparing the people who are initially vaccinated with those that are vaccinated in the crossover design. We're going to get a lot of information from the study, including a larger safety database. But importantly, we are going to have enough cases, as Stan reported, prior to crossover for us to be able to have a final analysis in the second quarter.

Okay. Final question regarding perhaps the future strategy of combining COVID vaccine with an influenza vaccine or NanoFlu. I think Stan, you mentioned perhaps being able to market that in 2025. I'm wondering what are the rate-limiting steps to getting there. And we've got several seasons beforehand and it seems like that would be a pretty interesting combination of vaccines. So what needs to be done to get there?

Well, it's generally clinical development, but…

I'll take a crack at it there. There are a couple of issues. One of them is if you've been watching the influenza epidemiology, you will have seen that flu has disappeared this season. And we need to understand how it's going to turn back to its normal cadence before we plan to do any kind of efficacy evaluation, naturally only in our own studies where we think we can get a result. And for that, we need to understand when flu comes back and how it will come back. So that's an important bit of information we need because we need to compare the combination vaccine to the 2 individual components. We'll get the efficacy results for COVID, while we already have them from the U.K. and South Africa. And we'll get confirmation from the final Phase III study in the U.S., but we also need efficacy results from the NanoFlu so we can use it to leverage the combination product.

Do you anticipate a trial -- I think you had mentioned of a trial perhaps even starting this next flu season for the Northern Hemisphere or the follow not?

Immunogenicity trial.

So it’s immunogenicity trial starting in the fall.

The next question comes from Eric Joseph with JPMorgan.

First, on manufacturing, Stan, if I heard correctly, you have 30 million to 40 million doses on the shelf currently. That would seem or sound well below the target of 110 million doses by the end of the quarter to satisfy OWS. So I'm just wondering what the impact might be to remittance or follow through on that award, whether any of that payment is at risk? Secondly, on PREVENT-19, it sounds like you had some visibility on a net accrual rate in initiating the crossover trial portion. Can you just say clearly whether or not you've already conducted an interim efficacy analysis or pretty much what prompted the move to initiate the crossover portion of the study at that time? And then finally, given some of the challenges in sourcing of raw materials to complete manufacturing, how should we be thinking about the impact to product margins from where things stood at the beginning of the year?

Yes. Let me take the manufacturing-related ones. I think that U.S., we -- I think our expectation is we'll have the 110 million doses made right around the end of the year, the first/second month of next year. So that will take that. The impact of cost of goods sold is -- it's not a long-term impact at all. I think it's -- if you're not running a plant, the first product you make costs a lot. But if you're making a regular cadence, the cost of goods sold should be where it always is. And so I'm not worried about our cost of goods sold margins.

And as far as the crossover, like I mentioned before, the real reason we did it was because EUA vaccine came available. In our other studies, for instance our Phase II studies, about 60% of the people have dropped out to receive EUA vaccine. So that was the real driver for us to maintain the integrity of the study.

Okay. I mean, really just a follow-up on Charles' question, it seemed like that might sort of invalidate the placebo arm. Do you -- I guess, what proportion of patients from the study have -- do you expect to cross over? Are you -- how do you maintain confidence that you'll still be able to accrue the dose primarily on the placebo arm?

The primary efficacy is obviously conducted prior to crossover where there's a placebo comparator. And that's going to be the final analysis. We didn't conduct an interim -- this can be a single analysis. It can be conducted on a data set. All of our alpha is going to be used against that endpoint. So we're going to have a more precise estimate of efficacy. And that data will be available before the end of this quarter.

The next question comes from Mayank Mamtani with B. Riley FBR.

Appreciate the comprehensive update. My questions are mostly the specific follow-ups to previously-asked questions. So maybe just, Stan, starting from the nonclinical CMC manufacturing components of the submission, are you able to comment on what might be these sort of things that are causing the holdup? Is it just process coordinating between the different sites? Or are there any specific issues around any particular assay? So if you're able to comment on that, that would be great.

No. I mean, and part of it has to do with manufacturing at different sites and showing comparability between the processes and the actual end product between the different sites. And you have to develop assays that can follow those. And so I think it probably took a little longer than we expected to get a potency assay that was worked across -- told the same story across all the sites. But I'm happy to say we did. We've crossed that bridge. We're -- we made a big breakthrough there and we're now racing towards validating everything and putting it into a package.

Okay. And then on the protocol amendment, I'm sorry if I shouldn't be calling it an amendment for PREVENT-19 study, could you just verify the final event rate is still -- I think 144 cases, I guess, will be -- was what we had in the initial protocol? And then my more important question is, as you know, the label for some of these EUA approved vaccines will start to look more specific to a booster going into the fall. So are you able to comment what could be gleaned out of PREVENT-19, if anything, around your booster strategy if at all?

Okay. Let me take that in 2 bits. First, as far as the number of cases, the previous version of the protocol called for an events-driven analysis. We're not there anymore. And we weren't there because, like I explained, we had to adjust the study to maintenance its integrity. So now it's a time-based analysis. It's going to be done on events that were collected prior to crossover. And that's going to be the total number of events we have in our analysis, and that will address our efficacy in that label.

As far as the other question about boosting, nothing from PREVENT-19 will speak directly to boosting. The data we have on boosting is coming from our Phase II study where we've just completed a 6-month boost of people who are initially vaccinated, both with 1 and 2 doses. Additionally, it will come from the South Africa study where people who receive 2 doses are getting a single boost dose in that context. So those are the -- that's the main data we're going to have to talk about boosting in addition to all the really compelling preclinical data that Greg shared with you previously.

I guess a natural follow-up to that is, can that be part of your regulatory submission? The U.K. COMCOR data, the South Africa data, those elements, do they make sense to be part of your regulatory package?

I think in the initial filing, our main intent is to get primary licensure with the vaccine we have in hand. And a booster trial's use is going to be considered as that data matures and is available. It's my thinking we're going to be filing in advance of having that data mature. So it will come on as a variation or as an imminent to that file.

Okay. Great. And then final question. On the -- so Stan, you gave color on the monthly run rate getting to 150 million in fourth quarter. Any commentary you can -- I know you used to talk about the annual run rate also? And if you're still guiding to that -- getting to that 2 billion doses mark. And I understand that includes contribution from Serum for about 1 billion, which you seem to be picking up some slack near-term for Serum. So any color on when you can get to that 2 billion doses a year run rate, just factoring in Novavax and your partners' capacity?

Yes. I think we will be there by the end of this year and expect to be there throughout the entire 2022.

The next question comes from Vernon Bernardino with H.C. Wainwright.

Congrats on the tremendous progress. One question I had is, given the U.S. currently appears to be a flush of vaccine doses. Once you have authorization to provide the 110 million doses promised to the U.S. government, do you anticipate the government to distribute those doses in the U.S. or outside the U.S.? Or is this a buy agreement one that allows you to perhaps change it to one with potential stockpiling like a place marker for a future COVID-19 vaccine against an emerging variant?

Yes. I think all of the above. I don't think we know -- I don't think anybody has determined what the fate of those 110 million doses are. And that's a discussion that we will have.

Okay. And then given the promising results with your RSV vaccine, ResVax, although the data are from a small sample, even one looks like promising data in women who got vaccinated while pregnant, do you anticipate conducting a maternal unitization study with 2373?

Right now, our main focus is -- in the pregnant population is to really do what some of the other sponsors have done. We're planning a registry at the far end to capture those cases and assure safety. We should have a relatively sizable population of pregnant women in our studies right now and we're following them very carefully to build that safety database out as well.

Okay. And then last question and I'll go back to the queue. As you probably know, Moderna's vaccine had a single-shot vaccine efficacy of 43%. Regarding the conduct of PREVENT study, have you had enough subjects not coming back for the second dose of 2373? I assume you have. I asked because data from the Phase I/II showed that while antibody levels at day 189 has fallen below the ranges observed in combos and sera from recovered COVID-19 patients, the IVG levels from a single 2373 dose of 25 micrograms plus Matrix-M might not have been enough to confer protection. Therefore, if you advance the combination of the flu plus 2373 to single shot -- and I saw in the paper that what was used as a primary regimen -- you could have a very differentiated vaccine available when it's ready for commercialization, especially if you met the threshold of 50% vaccine efficacy against severe diseases with a single shot.

Yes. I think those are all good observations. I mean, we'll see. We're going to do a trial in fall combination vaccine and that's one reason we'll learn about. But I think you summarized some of the findings quite well.

And so if I may, just I think, lost to the number. You said that the U.K. drops of 60%?

And that was data from the U.S. Phase II study, although there was a similar proportion in the U.K. Those people didn't drop out of the study, they just saw the commercial-used vaccine. So they're still being followed.

This concludes our question-and-answer session. I would like to turn the conference back over to Stanley Erck for any closing remarks.

Well, thanks, everybody. As we -- every quarter gets more data pointing to a successful vaccine, we're getting close to the end, and -- which is really the beginning for us and that's what we're all racing to do. I think we've eliminated all of the serious hurdles to getting -- risk hurdles to getting to where we need to be to get an improved vaccine. And so we're excited about that and we look forward to shipping our first product. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.