Company Update (NASDAQ:NVAX): Novavax, Inc. Reports Second Quarter 2016 Financial Results


Novavax, Inc. (NASDAQ:NVAX) announced its financial results for the second quarter and six months ended June 30, 2016.

Novavax Second Quarter Achievements:

  • Announced a new seasonal combination respiratory vaccine program. Novavax demonstrated the ability to combine the RSV F and influenza nanoparticle vaccines, bringing together a vaccine approach that induces broadly neutralizing antibodies against both influenza and RSV. Novavax’ program was unveiled at the New Approaches to Vaccines for Human and Veterinary Tropical Diseases Keystone Symposia in Cape Town, South Africa in June 2016.
  • Continued execution of Resolve™, a pivotal Phase 3 trial of our RSV F Vaccine in older adults (60 years of age and older). The Resolve trial is a randomized, observer-blinded, placebo-controlled trial in 11,850 older adults at 60 sites in the United States. The primary efficacy objective is the prevention of moderate-severe RSV-associated lower respiratory tract disease, as defined by the presence of multiple lower respiratory tract symptoms. Enrollment was completed in the fourth quarter of 2015.
  • Ongoing execution of a Phase 2 rollover clinical trial of our RSV F Vaccine in 1,330 older adults. The trial is a randomized, observer-blinded, placebo-controlled rollover trial designed to enroll from the population of older adults who participated in the prior Phase 2 trial. The primary endpoints of the trial will evaluate safety and serum anti-F IgG antibody concentrations in response to immunization with our RSV F Vaccine. Enrollment was completed in the fourth quarter of 2015.
  • Expanded enrollment of Prepare™, a pivotal Phase 3 trial of our RSV F Vaccine in healthy pregnant women, to multiple international sites to take advantage of the RSV season in the southern hemisphere. The Prepare trial is a randomized, observer-blinded, placebo-controlled trial. The primary objective is to determine the efficacy of maternal immunization with our RSV F Vaccine against symptomatic RSV lower respiratory tract infection with hypoxemia in infants through the first 90 days of life. The Prepare trial is supported by a grant of up to $89 million from the Bill & Melinda Gates Foundation (BMGF).

2016 Anticipated Events:

  • Announce top-line data from Resolve, the Phase 3 pivotal RSV F Vaccine trial in older adults in the third quarter of 2016; and
  • Announce top-line data from the Phase 2 RSV F Vaccine rollover trial in older adults between now and year end.

Summary

“This is an incredibly exciting time for Novavax, as we near the announcement of Phase 3 data for our RSV F Vaccine in older adults. Our regulatory expertise, manufacturing operations, and strong balance sheet, in conjunction with the pre-commercialization activities we have initiated, leave us very well-positioned to execute on this opportunity,” said Stanley C. Erck, President and CEO. “We also continue to see significant interest from a number of multinational, world-class vaccine companies seeking potential partnership and commercialization rights to our RSV F Vaccine franchise outside of North America.”

Financial Results for the Three and Six Months Ended June 30, 2016

Novavax reported a net loss of $79.4 million, or $0.29 per share, for the second quarter of 2016, compared to a net loss of $20.6 million, or $0.08 per share, for the second quarter of 2015. For the six months ended June 30, 2016, the net loss was $156.6 million, or $0.58 per share, compared to a net loss of $45.0 million, or $0.18 per share, for the same period in 2015.

Novavax revenue in the second quarter of 2016 decreased 82% to $2.5 million, compared to $14.0 million for the same period in 2015. Lower revenue under the BARDA contract of $13.6 million is the primary driver of this decrease. The decline in BARDA revenue in the second quarter of 2016 is the result of the one-time recognition of $7.7 million in revenue in the second quarter of 2015, and the recent advances in the Company’s seasonal influenza nanoparticle program which resulted in the wind-down of VLP influenza activities under the BARDA contract. This decrease in BARDA revenue was partially offset by $1.7 million in revenue recorded under the BMGF grant relating to our ongoing Prepare clinical trial.

Research and development expenses increased 134% to $64.9 million in the second quarter of 2016, compared to $27.7 million for the same period in 2015. The increase in research and development expenses was primarily due to increased costs associated with the clinical trials and development activities of our RSV F Vaccine and higher employee-related costs, including non-cash stock-based compensation.

General and administrative expenses increased 99% to $14.1 million in the second quarter of 2016, compared to $7.1 million for the same period in 2015. The increase was primarily due to higher employee-related costs, including non-cash stock-based compensation expense, and professional fees for pre-commercialization activities, as compared to the same period in 2015.

Interest income (expense), net for the second quarter of 2016 includes $3.0 million of interest expense relating to the Company’s Convertible Senior Notes.

As of June 30, 2016, the Company had $366.4 million in cash and cash equivalents and marketable securities compared to $230.7 million as of December 31, 2015. Net cash used in operating activities for the first six months of 2016 was $131.9 million, compared to $42.8 million for same period in 2015. The increase in cash usage was primarily due to increased costs relating to our RSV F Vaccine, higher employee-related costs and timing of vendor payments. (Original Source)

Shares of Novavax are down 1.45% to $7.46 in after-hours trading Tuesday. NVAX has a 1-year high of $15.01 and a 1-year low of $4.08. The stock’s 50-day moving average is $7.30 and its 200-day moving average is $5.80.

On the ratings front, Novavax has been the subject of a number of recent research reports. In a report issued on June 28, Piper Jaffray analyst Edward Tenthoff reiterated a Buy rating on NVAX, with a price target of $14, which implies an upside of 84.2% from current levels. Separately, on May 5, FBR’s Vernon Bernardino reiterated a Buy rating on the stock and has a price target of $17.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Edward Tenthoff and Vernon Bernardino have a total average return of -1.2% and -10.1% respectively. Tenthoff has a success rate of 37.5% and is ranked #3200 out of 4105 analysts, while Bernardino has a success rate of 37.1% and is ranked #3967.

Novavax, Inc. operates as a clinical-stage biopharmaceutical company, which engages in the provision of development of recombinant nanoparticle vaccines and adjuvants. Its product pipeline targets infectious diseases with vaccine candidates in clinical development for respiratory syncytial virus (RSV), seasonal influenza, pandemic influenza, and Ebola virus (EBOV).