Novavax, Inc. (NASDAQ:NVAX), a clinical-stage vaccine company focused on the discovery, development and commercialization of recombinant nanoparticle vaccines and adjuvants, today announced its financial results for the fourth quarter and twelve months ended December 31, 2015.

Recent Accomplishment:

  • Novavax issued a total of $325 million Convertible Senior Notes, resulting in net proceeds of approximately $276 million. These proceeds further strengthen Novavax’ balance sheet ahead of data from the pivotal Phase 3 Resolve™ clinical trial, expected in the third quarter of 2016, and in support of discussions for the commercialization rights to its RSV F Vaccine franchise outside North America, while minimizing dilution.


Novavax Fourth Quarter Achievements:

  • Completed target enrollment of the Resolve trial of its RSV F Vaccine in older adults (60 years of age and older). Resolve is a randomized, observer-blinded, placebo-controlled trial of 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.
  • Completed enrollment of 1,330 older adults in a Phase 2 rollover clinical trial of its RSV F Vaccine in older adults enrolled in the prior Phase 2 trial. The trial is a randomized, observer-blinded, placebo-controlled rollover trial designed to enroll from the population of 1,600 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 the RSV F Vaccine.
  • Initiated enrollment in a global pivotal Phase 3 clinical trial, known as Prepare™, of its RSV F Vaccine in healthy pregnant women. Prepare is a randomized, observer-blinded, placebo-controlled trial that utilizes a group sequential design, thus, the eventual sample size may vary between 5,000 and 8,255 pregnant women over a period of two to four years. The primary objective is to determine the efficacy of maternal immunization with the RSV F Vaccine against symptomatic RSV lower respiratory tract infection (LRTI) with hypoxemia in infants through the first 90 days of life. Novavax previously announced it was awarded a grant up to $89 million from the Bill & Melinda Gates Foundation to support development of this RSV F Vaccine for infants via maternal immunization.
  • Appointed Jeffrey Stoddard, M.D. to Vice President, Medical Affairs and Mark Twyman to Vice President, Marketing and promoted Jody Lichaa to Vice President, Quality Assurance.


2016 Anticipated Events:

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


Summary

“During the fourth quarter, we initiated two pivotal Phase 3 trials of our RSV F Vaccine, and subsequently completed enrollment of our Resolve trial in older adults. We expect to announce value-creating data from the Resolve trial and the Phase 2 rollover trial in older adults in 2016,” said Stanley C. Erck, President and CEO. “In addition, we recently strengthened our balance sheet through the successful completion of a convertible note offering, providing the necessary resources for the continued execution of our business plan.”

Financial Results for the Three and Twelve Months Ended December 31, 2015

Novavax reported a net loss of $78.8 million, or $0.29 per share, for the fourth quarter of 2015, compared to a net loss of $31.5 million, or $0.13 per share, for the fourth quarter of 2014. For the twelve months ended December 31, 2015, the net loss was $156.9 million, or $0.60 per share, compared to a net loss of $82.9 million, or $0.37 per share, for the same period in 2014.

Novavax revenue in the fourth quarter of 2015 decreased 13% to $5.9 million, compared to $6.7 million for the same period in 2014. Revenue for the full year 2015 increased 18% to $36.3 million, compared to $30.7 million in 2014.  The increase in full year revenue results from the recovery of additional costs under the BARDA contract of $7.7 million for the settlement of indirect rates for fiscal years 2011 and 2012 and $3.1 million relating to the Company’s prior Phase 2 clinical trial of our quadrivalent seasonal influenza VLP vaccine candidate in Australia as collection of the amount became reasonably assured in 2015. These increases in revenue were partially offset by a decrease in revenue resulting from a lower level of development activities under the BARDA contract and our prior PATH agreement, as compared to 2014.

We have historically recorded certain reimbursable research and development costs incurred under our government contracts in a line item titled “Cost of government contracts revenue.” Those costs are included in “Research and development expenses” for all periods presented in this press release and in the 2015 Annual Report on Form 10-K to be filed with the SEC.

Research and development expenses increased 128% to $75.9 million in the fourth quarter of 2015, compared to $33.3 million for the same period in 2014. For the full year 2015, research and development expenses increased 72% to $162.6 million, compared to $94.4 million in 2014. The increase in research and development expenses for the full year 2015 was driven by costs related to the initiation of our two pivotal Phase 3 clinical trials and Phase 2 rollover trial of the RSV F Vaccine and higher employee-related costs, including non-cash stock-based compensation, tied to the continued growth of the company. This increase was partially offset by a lower level of development activities under the BARDA contract.

General and administrative expenses increased 75% to $8.9 million in the fourth quarter of 2015, compared to $5.1 million for the same period in 2014. For the full year 2015, general and administrative expenses increased 55% to $30.8 million, compared to $19.9 million in 2014. The increase in general and administrative expenses for the full year 2015 resulted from increased employee-related expenses, including non-cash stock-based compensation, tied to the continued growth of the company and professional fees for pre-commercialization activities.

As of December 31, 2015, the company had $230.7 million in cash and cash equivalents and marketable securities compared to $168.1 million as of December 31, 2014. Net cash used in operating activities for 2015 was $126.1 million, compared to $67.0 million for 2014. The factors contributing to the change in operating cash usage were primarily due to increased costs relating to our RSV F Vaccine and higher employee-related expenses, as well as the timing of customer and vendor payments.  Subsequent to year-end 2015, Novavax completed its offering of Convertible Senior Notes mentioned above. (Original Source)

Shares of Novavax closed last Friday at $4.71, up $0.12 or 2.61%. 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 $5.30 and its 200-day moving average is $7.83.

On the ratings front, Novavax has been the subject of a number of recent research reports. In a report issued on February 16, Wedbush analyst Heather Behanna assigned a Buy rating on NVAX, with a price target of $14, which represents a potential upside of 197.2% from where the stock is currently trading. Separately, on December 15, Piper Jaffray’s Edward Tenthoff reiterated a Buy rating on the stock and has a price target of $15.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Heather Behanna and Edward Tenthoff have a total average return of 5.8% and -9.9% respectively. Behanna has a success rate of 38.5% and is ranked #891 out of 3682 analysts, while Tenthoff has a success rate of 28.0% and is ranked #3522.

Novavax Inc is a clinical-stage vaccine company engaged in the discovery, development and commercialization of recombinant nanoparticle vaccines and adjuvants.