Novavax, Inc. (NVAX) CEO John Jacobs Presents at JPMorgan 42nd Annual Healthcare Conference Transcript

Novavax, Inc. (NASDAQ:NVAX) JPMorgan 42nd Annual Healthcare Conference January 8, 2024 8:15 PM ET

Company Participants

John Jacobs – President and CEO

John Trizzino – Chief Commercial Officer & Chief Business Officer

James Kelly – CFO

Filip Dubovsky – President of Research & Development

Conference Call Participants

Eric Joseph – JPMorgan

Eric Joseph

All right, okay. We’ll get started here. I’m Eric Joseph, Senior Biotech Analyst with JPMorgan. And our next presenting company is Novavax. Presenting on behalf of the company is CEO, John Jacobs. There’s going to be a Q&A session after the presentation. So just raise your hand. We’ll bring a mic around for those who have questions. And for those tuning in via webcast, you can submit questions there as well.

So with that, John please?

John Jacobs

Thank you, Eric. Good evening, everyone. Thank you for joining us tonight at this late hour. And we’re probably standing between you and dinner and a cocktail, or for some of you that I know maybe a good cigar and that kind of thing. But really appreciate you joining us this evening.

I’m CEO of Novavax, John Jacobs, and I’m joined tonight by several colleagues, who will be joining me for the Q&A session, Dr. Filip Dubovsky, our President of R&D; John Trizzino, our President and Chief Operating Officer; and Jim Kelly, our CFO.

Let me find the clicker here. Sorry about that. So just a cautionary note, we will be making forward-looking statements this evening. So please make sure you read our cautionary note that’s available on the JPMorgan portal along with our deck and any other disclosures we have in our corporate website and in our materials that we’ve shared in the public domain.

So look, we’re going to be seeing a lot of numbers the next few days at JPM, P&Ls, investments, headcount, opportunities, market shares, so I figured I’d get that out of the way and start with a few numbers. So I’ll open up on numbers, and I want each of you in the audience to think about two important things. What are the two things that these numbers have in common? If anyone can figure it out, you won the prize already that will be available out back. So we’ll let you know. Let’s see.

And beyond the color of the font, there’s a couple important things that these numbers have in common. So just think about it for a moment. Other than people on my team, any guesses or thoughts?

Let’s start with 1,300. That involves children in Africa. Shocking statistic, but every day 1,300 children in Africa die of malaria. That’s the equivalent of two United States Elementary Schools, every day worth of children. In fact, globally, 630,000 people die of malaria every year, mostly in Africa.

The second set of numbers 41 million, 710,000 and 52,000, that’s flu. Over the last five years, peak incidence of flu in one given year was 41,710,000 hospitalizations, 52,000 deaths.

Anyone have a guess as to what the 3 million number represents? Clue Novavax has a COVID vaccine in the market. No prize for that. 3 million deaths to COVID in 2020 alone, not including ’21 and ’22, or the prior season. In 2023 — and some people think COVID has gone away, it has not. We lost my father-in-law last July to COVID-induced pneumonia. So for me, it’s really personal, for my wife, it’s really personal. It’s here to stay.

So the two things these have in common, number one, these numbers can be prevented through vaccination. And number two, Novavax is in all three of these markets. In fact, the CDC and other sources say that tens of millions of lives can be saved by vaccination. That’s what we do.

What we do matters, as an industry. What we do matters, as Novavax. And if you’re in the financial industry, if you’re an analyst, if you’re a banker, if you’re lending money out, and you’re supporting the biotech industry and companies like Novavax, what you do matters a lot. You’re providing us with the equity capital to bring assets like this forward to save millions of lives. What we do collectively makes a big difference. That’s our mission at Novavax and we’ll never rest in our quest to protect health of people everywhere around the world. So that’s our mission. That’s why we exist.

Let’s talk about who we are, and our capabilities. Novavax is a fully integrated commercial-stage biotech company focused exclusively on the development of life saving vaccines. We have our first product, out our commercial product, that’s our COVID-19 vaccine. And we have our updated version for the XBB. 1.5 strain in market today, around the world.

We have a unique and differentiated technology platform with two key components, our protein-based technology, and our Matrix-M adjuvant. We’ll talk about that in a few slides. And we’re rapidly advancing our next asset out of our pipeline, that’s our combination Flu/COVID vaccine, and anticipated launch in 2026. And we believe that positions our company for significant and remarkable growth opportunity. We’ll talk about that also in a few slides.

Importantly, we’ve established a global footprint. We have manufacturing, commercial operations and strategic partnerships including SK Bio, some of the members of whom are in the audience with us tonight. Appreciate your partnership SK Bio, Takeda and Serum Institute of India who helps us manufacture our product. This enables us to both commercialize and distribute our vaccines to people around the world.

And our tech platform, any vaccine company in the world would love to have either one of these pieces of technology. We have both. We think that makes what we do at Novavax very differentiated and very special. We have our nanoparticle protein-based vaccine technology which delivers significant performance characteristics in the vaccines we develop, including high immunogenic and efficacious responses, refrigerator stability, and it’s well suited importantly for the development of combination vaccines. A key advantage we think we have on the development side.

Matrix-M is designed to boost the immune system response and it also has a significant dose sparing activity, antigen sparing, which is very helpful as you develop vaccines, especially when you’re putting a lot of different antigen in, in combinations, trivalent, quadrivalent, etc., very helpful.

Now we’re leveraging this technology to advance our pipeline beyond a single product company. You can see up top on the pipeline slider our Coronavirus vaccine and our updated strain. Our top priority moving forward is our combination vaccine, Flu/COVID or CIC, as we call it for short. So when I say CIC, I mean our combo vaccine that includes our COVID, proven COVID vaccine, and our Flu vaccine where we have positive Phase 3 data and outstanding data from our most recent Phase 2 trial that we’ll share with you today.

Another vaccine we’re very proud of that we did not develop, but includes our technology and showcases the capability of our adjuvant is the Malaria Vaccine, R21, developed by a collaboration between Novavax, Oxford University and Serum Institute of India, using our Matrix-M technology. In fact, R21 was just pre-qualified by the WHO last month. And you can see here, noted as a vital tool by the WHO Director-General with 75% efficacy results in the Phase 3 trial that exceeds current standard of care.

We talked earlier about 1,300 children a day 1,300 sentient beings lives and experiences wasted every single day, 50, 60 kids a minute or more dropping dead of malaria. In fact, by the end of this presentation, we would have already lost many more children in Africa, and all of those deaths can be prevented. We’re proud of our participation in this. We do get a low-single digit royalty on sales of this vaccine. I encourage all of you to go to Gavi’s website, where they indicate projections of purchases of this vaccine, and intend to launch it this year in Africa.

Let’s take a moment and one slide to do a year in review. Talk about anniversaries. This is my one year anniversary as CEO of Novavax. It was last year this week, that Stan Erck, our prior CEO who stayed with the company for decades, and helped to bring that R21 vaccine to fruition, that’s a big part of his legacy, stepped down from his role and the company invited me to take on the challenge of CEO and join this amazing executive team in this company for this journey.

The primary reason I came was the technology platform here and the ability to change lives. This company should be very successful. We have something special here and we can help change the world. And it’s about mission.

Let’s talk about year in review. What did we achieve in ’23 that was important? And obviously Novavax rapidly expanded, as did other companies to take on the global pandemic. That meant hiring thousands of people from a company of roughly 100 to 2,500 or so, in a very short period of time, purchasing manufacturing capability around the world to hit what was thought to be potentially an 8 billion dose marketplace.

As COVID emerges into an endemic from a pandemic, it’s important to rescale the company, to reduce the scope and scale to match that opportunity and to make sure that the cash on hand that we have and the runway we have can help us bring these vaccines forward and be successful, stable and robust business over time.

So the management team and I were very decisive in 2023. We took rapid, thoughtful steps to significantly reduce our expense footprint and reshape this organization to give us the best chance for success. That included the restructuring in the management team, creating new roles, new positions, and bringing in new executives from outside, putting people in different roles where we think they can make a bigger impact. It included in 2023, one out of five employees departing. We reduced by 20%, headcount.

It included knocking out $1 billion of current liabilities and reducing our OpEx by almost as much. And we’re on track with SG&A by over 25% reduction in ’23 and to hit over a 55% reduction from this time last year, this calendar year in 2024 in expenses and our overhead. We also streamlined the way we manufacture the vaccine, our strain selection process, bringing multiple variants forward at once. One of the challenges with our remarkable technology is it does take about six months to make the vaccine once you know the strain you need to target.

Now if we were notified in June about what the strain was for COVID, we wouldn’t have a vaccine then out until November or December. So what did we do together in Novavax? We thought about it. We can track the strains that are developing, and what we did was bring multiple trains forward at the same time, with a minimal impact to our P&L, which we can do in the lab, and bring to an initial stage for commercial scale and development. That allowed us to have the right strain in our hands at the right time, and be on the market at the same time as the mRNAs.

We also delivered then on all of our APA commitments around the world and still have substantial APAs remaining for the next two years. And we gained critical experience in the U.S. market as it converted for the first time to a commercial opportunity. And very importantly, we outlined a faster path pulling forward by about a year on our initial estimates, our combination vaccine, should we succeed in that clinical program.

Quite a remarkable year. Quite a ride for the management team very exciting, and at times very challenging, but we did it and we achieved what we wanted to in 2023 to set us up for a successful ’24-’25 and even a brighter future beyond. So let’s take a look at the next couple of chapters of Novavax’s future. Chapter two, then we should think about as the next two COVID seasons. We should be a standalone COVID company in 2024 and 2025, and should be able to launch our combo vaccine in 2026.

So how do we drive further performance and success for Novavax in the next two seasons? In the U.S. market as it converted to commercial, we’ve learned a lot, and we’re improving our product position and presentation. So on the left side of the slide, you see the key attributes to a successful product launch in the U.S. marketplace starting with product presentation. In ’23, we had a five dose vial, not ideal. Our competitors had a pre-filled syringe. We intend on having a single dose presentation in the form of a pre-filled syringe in 2024 putting us on an even playing field there.

Secondly, we were authorized by FDA and improved our relationship with FDA, to become an outstanding partner and bring our vaccine forward, but currently under an emergency use authorization. As some of you may or may not know that prevents a company from doing a full marketing or promotional campaign about their vaccine. And frankly, we could talk about Novavax during the year, but not about our vaccine. Not until we were authorized under an EUA in October, after the season had already started. We intend to be on license under a BLA in 2024, opening that up for our team to communicate and market appropriately, and be on an even playing field with the competition.

Our label is expanding to include the next age cohort. That’s what we’re seeking is six plus instead of 12 plus, which helps us with vaccine for children’s program and to be more competitive in the marketplace. And an earlier approval is what we’re anticipating instead of October, September or earlier. Importantly, if you ask someone who Novavax was or what they did, this time last year, if you weren’t directly in the industry, you wouldn’t often get an, I know. They might even confuse us with a component of SpaceX or someone else. What’s Novavax? Right, very low awareness levels in the U.S. We were known around the world elsewhere, where we sold in through our APAs, but not really in the U.S. marketplace, not to a high level.

By mid-year, John Trizzino and his team were able to drive our awareness to about 46% aided awareness with healthcare providers. And as I stand here today, in January ’24, we’re 80% awareness with healthcare providers, and what we have done is made ourselves aware, and healthcare partners/providers aware of our technology, who we are and what we have to offer.

And finally, market access. We were not quite on an equal footing in all retail chains, not necessarily on all the schedulers and the daily workflow this year, or in every retail outlet. We were in many, but not all. That’s changing. We’ve been working with retailers already and deploying our forces more toward retail. Everyone anticipated the COVID market to be roughly a 60:40 or 70:30 split between retail and non-retail or IDN and healthcare provider offices. That mimics flu.

It was surprising to see well over 90% of all COVID doses administered through retail, almost zero through non-retail channel. So we’re going to redeploy and access retail. We’ve already engaged with them in Q4 to make a better 2024. So the future looks bright for the next two years in the U.S.

And then let’s talk about what next, chapter three. So we have two more seasons to drive results, two more seasons to build awareness, build market share and become a household name. Why are we excited about 2026 and beyond? First and foremost, the market is migrating toward a desire for combination respiratory vaccines that are seasonal in the fall, especially flu and COVID combination. Our market research shows that there’s a high demand for that combination. And that the illustrative on the right is that pie chart. It’s not — we’re not sharing our data specifically for competitive reasons, but well beyond half of the market is anticipated to convert to combination.

Now COVID is not at its peak where it was in the pandemic. We’re anticipating 30 million to 35 million doses in the U.S. market this year. But flu traditionally your rolling four-year average is 130 million to 140 million doses in the United States. We’ve got an outstanding flu vaccine candidate, positive Phase 3 data, and then a revised version positive Phase 2 data you’ll see in a moment on a slide here that we get to introduce in the form of a combination which is going to be highly desired.

So if we all agree that combination vaccine is most likely the wave of the future, what about Novavax? Are we positioned to get our fair piece of that? We believe we’re well positioned to do so for several reasons. Our technology platform. We get to leverage a proven COVID vaccine, our trivalent, in this case, influenza vaccine with positive Phase 3 data positive Phase 2 data and Matrix-M adjuvant.

Secondly, there’s a strong preference here. This is our internal data. But 25% to 30% of healthcare professionals surveyed actually prefer a protein-based option in the form of a combination. We will be the only company from what we can see, who would have that on the market in 2026, as an alternative to mRNA vaccines. And I talked about our growing awareness level. People know who we are, and they’re starting to learn about the value of our technology platform.

What else? We talked about our data. This is from our combination phase combination vaccine Phase 2 study, you can see summary observations. Very importantly, if you look down at the bottom left, that last bullet, HAI metric mean ratio in line with a licensure criteria. So we’re hitting ratios on key metrics that meet the standards for regulatory approval. That’s very important and encouraging data in our Phase 2, and you take a look at our flu. Second bullet, HAI responses, 31% to 56%, higher for all strain four strain study, compared to FLUAD, 44% to 89% higher for A strains compared to Fluzone high dose. It’s impressive data. It’s exciting data for us, and it encourages us to keep moving forward and bring our vaccine forth.

And the company is better positioned now after what we’ve accomplished in 2023 to bring that forward independently. When I first joined the thought was we would need to have a partner to help finance that program. But based on the significant improvements we’ve made, on our P&L, on our balance sheet, on our cash position, and our focus and energy as a culture and a company, we’re able to bring that forward and we’ll be initiating a Phase 3 registration trial for the product. Our plan is to do that second half of this year, with a potential launch in 2026.

This next slide, R&D and SG&A expense guidance that we’ve provided is just to illustrate the significant reduction in our cost footprint that we’ve executed, and plan to execute in ’23 and ’24. Again last year, when I first joined the company, $1.7 billion was our SG&A and R&D footprint in 2022. We took that down in ’23. We are actually $100 million ahead of our stated targets for the 2023 cost reductions. And very importantly the team than I did so without hurting our capabilities to identify the appropriate strain, develop the vaccine and get shots in arms. That’s what we do. That’s the heartbeat of Novavax.

So we took that as a key filter on any decision that we made. We were able to make those reductions, and now we’re targeting below $750 million, over a 55% reduction in where we started. Very importantly, last bullet on the bottom left. This includes prioritizing improvements to the long term supply chain efficiency. And that includes the contemplation of selling our manufacturing facility in the Czech Republic, which if we’re successful doing so would give us a significant amount of cash upfront and also reduce operating expenses significantly on a go-forward basis each year.

So in summary, we’ve made a lot of progress in 2023. We’re not all the way where we would like to be at as a company, but significant step forward to set up a better and stronger foundation for 2024 forward in those next two chapters I talked to you about. We created a more lean and focused organization, restructured the management team, significantly reduced our expenses and took out a lot of overhangs and take and pay contracts, either renegotiated, pull forward cash from APAs and other things to bring in non-dilutive capital for the company over the course of the year. We evolved our corporate culture to be lean and focused on the task at hand.

We’re well positioned to advance the pipeline and focus on our CIC or combination program. We identified a faster pathway forward, and we’ll be speaking with FDA in the near term to get that authorized, and plan on assuming approval there kicking off that trial second half of this year, and can do so independently. We hope to launch that vaccine in 2026. And it is certainly a large market, lots of potential.

So again, our mission will never rest in our quest to protect the health of people everywhere. Our employees believe in our technology. We’re proud of what we have to offer. We really can’t wait to see how that Matrix-M based R21 vaccine can work in Africa to save those innocent children’s lives and give them a future that they deserve. And that’s what this in the end is all about.

So thank you very much for your time today. I’d like to welcome the members of our executive team up to the stage here to help me address your questions. Thank you.

Question-and-Answer Session

Q – Eric Joseph

All right. Well, thanks, John. Just by way of starting out the Q&A session, expanding brand awareness, product awareness is obviously one of the objectives here with your COVID vaccine. I’m curious to know, sort of where are you are in that awareness expansion effort and some of the feedback that you are getting and the types of messaging that seems to resonate, and kind of lead to your product being the vaccine of choice, recognizing that, in addition to awareness, there’s knowing the product, but also having to select it over some competing options.

John Jacobs

John T, you want to handle that?

John Trizzino

Yeah, sure. Thanks, Eric. So I think it’s important to understand the history of where we are today. And so it’s not simply just a data point in time, but it’s all of the experiences that we undertook during the pandemic period, the development of our vaccine program, the spectacular results we had during our clinical trials, and then advancing into the post-pandemic period, in which we demonstrated and communicated to the general public, our ability to manufacture the product, our ability to go from the original Wuhan strain to the updated strain, XBB.

That’s how we entered the market this year and communicated that to the entire investment community, the consumer community, the distribution community to become aware of what our capabilities were as an organization. We took that strain change into emergency use authorization. We then had access into a large percentage of all of the vaccinating pharmacy, some 70% of vaccinating pharmacies were stocking our product. And then we created overall awareness in the consumer community. But we’re a little bit hamstrung by some of the things that John mentioned in his presentation.

So what are we doing about that, right? I think as we look forward to ’24, it’s clear that we need to have a BLA-licensed product. It’s clear that we need to be in a pre-filled syringe. It’s clear that we need to be early to market right. We need to be there when ACIP makes a recommendation and a season initiates that we’re in-market and available. Of course, what that means is that a communication education campaign to healthcare providers as well as to consumers, and then coordination with the CDC, through our policy teams and government affairs teams to make sure that all those initiatives are being effectively communicated throughout the entire market.

So the lessons learned in ’23, the seeding of the marketplace that took place during the pandemic is really going to set the stage well for the ’24 season.

John Jacobs

Thank you, John.

Eric Joseph

You’re providing updated guidance on the OpEx side, John here today, and I appreciate that’s certainly a focus for the business. On the top line side. I guess, are you in a place to sort of guide or yeah, I guess provide a little bit of an outlook. It’s certainly it’s hard to do in the commercial setting right now in the U.S. We’re kind of sure right now, kind of early days and obviously it’s kind of a delayed COVID season at the moment, but there’s also still a fair amount of APA perhaps related revenue that might perhaps pull through. So I guess, is there some component of the top line that can be sort of forecast as a base case here?

John Jacobs

Jim Kelly, would you like to handle that? I think we can comment on that committed APA contracts that remain over the next two years.

James Kelly

Hey, certainly. When you look at the way we have presented our company today, I think core to our story is that we fully transformed the size and scope of this company from a pandemic era company to one that is far more lean, focused and prepared to compete in the competitive commercial marketplace.

The OpEx update that we share with you today, the guidance, it’s really a repeat of what we said on our Q3 call, namely that from 2022, as compared to where we’re about to go in 2024, we’re reducing our operating expense, R&D plus SG&A, by almost a $1 billion, over 55%. And we’ve done so by maintaining the important capabilities, we need to advance both our commercial capabilities and also advance our pipeline, namely CIC. So that’s of key importance.

One of the things as we move forward, which is critical, is financial stability. And when we look at our pathway to financial stability, as we build these new commercial markets, and advance our combination CIC program, some important points I just want to re-emphasize from our Q3 call. We see a pathway to approximately $2 billion in revenue and cash. And I’ll tell you exactly what I mean. At 9/30, we had $960 million in cash, receivables and also an expected payment from Canada that we’re literally waiting on A day now, now that we’ve delivered that APA doses in December.

In addition to that $960 million, and looking to the full season guidance midpoint of $1.3 billion, we had a remaining $600 million outstanding. That’s virtually all $500 million of the $600 million fully government-based across the completion of Operation Warp Speed plus delivering upon these APAs you mentioned. Then when you look past this season, another $750 million in committed APAs through 2024 and 2025.

So in total, you get to about $2.3 billion, adjusted for upfront, it’s about $2 billion. And it’s an important component of, I’ll call it, foundational cash and future revenue that when coupled with the cost containment, namely getting R&D and SG&A below $750, sets the stage to be able to build out those important commercial markets like the U.S., like what we’re seeking to do in Europe, and then select great opportunities that have come our way, like in Korea. And as we look to work potentially with UNICEF, in some of the low and middle income countries through their RFP process.

So those are going to be upside to what we’ve just described. So hopefully that gives you a little bit of perspective of what lies ahead.

Eric Joseph

On the OpEx side, seems well — was going to ask whether — maybe, perhaps unpack a little bit where you’re getting a little more — where you’re seeing efficiencies, I guess, on the spend side of things, but really I kind of want to dig in a little bit more on manufacturing capabilities. Just looking at your slide here where that possibly a sale of your Czech Republic manufacturing facility might be on the table, suggesting that perhaps kind of building out your internal manufacturing capability isn’t necessarily a priority going forward here.

Is that the understanding that investors should kind of carry going forward? And is it really the Serum Institute we should think of as the primary supplier of antigen or vaccine product for both COVID and for CIC?

John Jacobs

So perhaps I can break this into two pieces. I’ll take one and John may have you take this supply piece?

John Trizzino

Yes, thank you.

John Jacobs

One of the pieces that you’re asking is a help us understand this improvement in your cost structure as you drive R&D and SG&A below $750 million. And what we shared in November was that we’re prepared to take action with urgency and the expectation you investors should have is that, in the very near future, we’re going to come back to you with some more specifics around exactly how we’re going to further drive down that cost structure.

So we got an earnings call, for example coming up in two months. It’s our expectation to provide more detailed guidance. You should expect either there or prior to that, additional feedback on more specifics around it. And it’s important because it’s not just to say, oh, your cost structure is lower. What is critical is where are you investing? How are you driving performance? So we want to combine those two together. All right. So stay tuned for near term feedback. And then John, perhaps you would take that…

John Trizzino

Yeah, I think what’s important to understand is, first, we’ve got two world class facilities, right, both the CRM facility and the CZ facility. Both have just done an amazing job during our growth cycle here. And these are the facilities that make safe, effective biologics, complicated biologics. So you get to a point where you say, well, what is the global vaccine market and what it was during the pandemic is not what it is during the commercial period. So those numbers have changed pretty dramatically.

As we saw at the beginning of the ’23 season, we had over 100 million doses of expected demand in the marketplace. That changed down to 70 million. And then it changed down to 50 million, and then right now, at the end of December, based upon IQVIA data, we’re seeing something like, 28 million doses going through the retail channel. So based upon that, we have to modify our supply models. And of course, that meant that we didn’t need the capacity of those two facilities and had to make a very difficult decision about where to focus our time and attention, at least in the short term.

So I think this is a market-driven decision. It’s a cost efficiency-driven decision. And obviously, it’s steeped in global market demand and supply.

John Jacobs

And very importantly, in the build out of our CZ facility in the Czech Republic, Eric, we built over time, a regulatory capacity in Europe, that’s a critical Center of Excellence for us there and also a team that does the assays and testing in-country and those types of things. So those types of capabilities are critical to us moving forward as we compete for tenders. And we can keep that expertise on European soil as part of Novavax, even if we sell the CZ facility and other employees that would go with that, right, would go with it.

James Kelly

Important, Eric this is something we’re exploring, any definitive decision would be pending.

Eric Joseph

Thanks. Go ahead.

Unidentified Analyst

Yeah, thank you very much. My name is Holland from CanAp [ph]. You have a gem in your portfolio with the Matrix adjuvant series. And as you know better than anybody, most competing products, like some of the characteristics, and there’s a huge scarcity. So they are, I assume there’s a business development opportunity on the Matrix side, for Novavax. Could you allude a little bit to that, please?

John Jacobs

Well, I’ll ask Filip to add a little extra color and context, but during the course of ’23, we signed an agreement with the Bill and Melinda Gates Foundation to explore several early stage programs using our Matrix. And there are multiple collaborations around the world, Filip, with universities and countries around the world using Matrix, and maybe you’d like to add a little extra context there.

Filip Dubovsky

Sure. You’re right. I mean, the adjuvant has some very unique characteristics. And we really reduce it to practice, both with licensure of the COVID vaccine, as well as with R21, the malaria vaccine. It does some pretty neat things, right? So it generates these very broad neutralizing immune responses and these very, very long lived CD4 polyfunctional responses. And you’re right there’s an opportunity there globally to have expanded use of the adjuvant.

Now many people don’t know, for instance, that we have a very, very small veterinary business that uses our Matrix adjuvant in Europe. And we have multiple collaborations with both academic government as well as commercial organizations exploring the use of our adjuvant with their antigens. This one feature that I think John touched on was that this is a dose sparing adjuvant. And that means for companies that have either difficult to produce or expensive to produce antigens, there may be a real benefit to using their adjuvant to make their cost of goods lower and real to expand efficacy.

I mean, the breadth of immune response that we are able to induce is quite remarkable. And we saw this with the different strains for COVID as well as was different flu strains in our Phase 3 work. So you can expect these kinds of benefits to be brought to additional antigens. And we do have a very important effort that’s being led by Elaine to find other partners and get additional value out of the adjuvant.

John Jacobs

Yeah, and that’s why when I joined I created the Chief Strategy Officer role at Novavax and brought in Elaine O’Hara, who has years of experience in vaccines, came out of Sanofi-Aventis, was leading commercial for North America for Sanofi-Aventis Vaccines. So Elaine brings years of experience to the table and we really refocused the entire R&D shop. And there are a lot of exploratory work getting done in-house, really channeled down our focus to what’s absolutely critical next for Novavax, to concentrate our resources on getting it right with our current COVID vaccine and then bringing forward as quickly as possible the combination, while exploring partnering and out licensing opportunities for elements of our technology or assets that wouldn’t be near term value to Novavax.

So Elaine’s on the way with that effort. The BMGF deal was one of those examples. There’s many more that we intend to be exploring, as we enter ’24 and beyond.

Filip Dubovsky

I guess there’s just one more thing to add, and maybe that’s slightly self aggrandizing. But we’ve continued to develop the Matrix technology. And I think that we are planning in the near future to share with the world some of the ways we’ve taken it. I think people will be relatively surprised in what Matrix can do, and how it can improve the response of various number of vaccines.

John Jacobs

Coming soon to a presentation near you.

Filip Dubovsky

After the patents have all been squared away.

Eric Joseph

Maybe just a last question on the CIC program. John, you’ve kind of laid out an expectation of perhaps being in market in 2026. Can you just sort of walk backward from that that type of study that would enable approval and commercialization, whether it’s images, [indiscernible] efficacy-based?

John Jacobs

And we still obviously have to speak with FDA to get that finalized, but I’ll let Filip add some color and context and what we can share.

Filip Dubovsky

Yeah, and the plan is under review with the FDA, and we’re in for finalization of that to go forward. But we’ve seen our competitors move forward, an accelerated approval pathway. And certainly, it’s one that we’ve also achieved with our previous standalone influenza vaccine. So we understand that pathway relatively well. So the real question in front of the FDA, is the cohort [ph] material which we’ve now generated, is it of adequate quality to be taken into Phase 3 study, are the assays we’re proposing and the endpoints we are proposing appropriate for accelerated approval pathway?

And these studies are relatively fast. We’re looking to do the study in the second half of this year. It is often the studies are done in the offseason, which would imply southern hemisphere study with Northern hemisphere strains. And that would allow us to do a filing in 2025 with approval, approval in ’26. There are obviously post-market commitments that go with that to do a clinical efficacy study in the out years.

Eric Joseph

Yeah, time for one more in the back here.

Unidentified Analyst

Hi, sorry. I’m just wanted to ask if you could give a few more specs on the CZ facility in terms of what it produces, its capabilities? Is it like any biologics, any particular — like anything that might be out there that’s already disclosed?

John Jacobs

Filip, Jim you guys want to comment on that?

Filip Dubovsky

Yeah, I’m not sure that we have the right people here to comment on the specifics of that facility. It’s been used by other companies previously to develop other vaccines, it’s capable of cell culture that we use for our back of our system.

James Kelly

What I will say is right now it’s focused on exclusively producing our current COVID vaccine.

Filip Dubovsky

We’ll be happy to forward you all the technical specifications, but there’s three 6,000 liter stainless steel bioreactors at the facility. It’s a full front to back biologic manufacturing facility.

John Jacobs

It could be re engineered to do many different things, would take a little bit of investment and time and focus. Right now it’s geared to produce our COVID vaccine.

Eric Joseph

All right, well, thanks.

John Jacobs

Thank you Eric. Thanks, everyone for joining us this late. Thank you.