Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 30, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-26770 | |
Entity Registrant Name | NOVAVAX, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 22-2816046 | |
Entity Address, Address Line One | 21 Firstfield Road | |
Entity Address, City or Town | Gaithersburg | |
Entity Address, Country | MD | |
Entity Address, Postal Zip Code | 20878 | |
City Area Code | (240) | |
Local Phone Number | 268-2000 | |
Title of 12(b) Security | Common Stock, Par Value $0.01 per share | |
Trading Symbol | NVAX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 86,305,085 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001000694 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue: | ||
Revenues | $ 80,951 | $ 703,971 |
Expenses: | ||
Cost of sales | 34,086 | 15,204 |
Research and development | 247,101 | 383,483 |
Selling, general, and administrative | 112,532 | 95,992 |
Total expenses | 393,719 | 494,679 |
Income (Loss) from operations | (312,768) | 209,292 |
Other income (expense): | ||
Interest expense | (4,316) | (4,876) |
Other income | 24,362 | 1,654 |
Income (Loss) before income tax expense | (292,722) | 206,070 |
Income tax expense | 1,183 | 2,662 |
Net income (loss) | $ (293,905) | $ 203,408 |
Earnings Per Share [Abstract] | ||
Basic (in usd per share) | $ (3.41) | $ 2.66 |
Diluted (in usd per share) | $ (3.41) | $ 2.56 |
Weighted average number of common shares outstanding | ||
Basic (in shares) | 86,158 | 76,457 |
Diluted (in shares) | 86,158 | 80,711 |
Product sales | ||
Revenue: | ||
Revenues | $ (7,457) | $ 585,628 |
Grants | ||
Revenue: | ||
Revenues | 87,379 | 99,301 |
Royalties and other | ||
Revenue: | ||
Revenues | $ 1,029 | $ 19,042 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (293,905) | $ 203,408 |
Other comprehensive income: | ||
Foreign currency translation adjustment | 3,211 | 41 |
Other comprehensive income | 3,211 | 41 |
Comprehensive income (loss) | $ (290,694) | $ 203,449 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 624,950 | $ 1,336,883 |
Restricted cash | 10,330 | 10,303 |
Accounts receivable | 112,849 | 82,375 |
Inventory | 34,185 | 36,683 |
Prepaid expenses and other current assets | 188,714 | 237,147 |
Total current assets | 971,028 | 1,703,391 |
Property and equipment, net | 307,414 | 294,247 |
Right of use asset, net | 103,923 | 106,241 |
Goodwill | 129,827 | 126,331 |
Other non-current assets | 30,507 | 28,469 |
Total assets | 1,542,699 | 2,258,679 |
Current liabilities: | ||
Accounts payable | 124,801 | 216,517 |
Accrued expenses | 518,706 | 591,158 |
Deferred revenue | 415,764 | 370,137 |
Current portion of finance lease liabilities | 1,205 | 27,196 |
Convertible notes payable | 0 | 324,881 |
Other current liabilities | 858,382 | 930,055 |
Total current liabilities | 1,918,858 | 2,459,944 |
Deferred revenue | 274,062 | 179,414 |
Convertible notes payable | 166,857 | 166,466 |
Non-current finance lease liabilities | 30,993 | 31,238 |
Other non-current liabilities | 47,511 | 55,695 |
Total liabilities | 2,438,281 | 2,892,757 |
Commitments and contingencies (Note 15) | ||
Preferred stock, $0.01 par value, 2,000,000 shares authorized at March 31, 2023 and December 31, 2022; no shares issued and outstanding at March 31, 2023 and December 31, 2022. | 0 | 0 |
Stockholders' deficit: | ||
Common stock, $0.01 par value, 600,000,000 shares authorized at March 31, 2023 and December 31, 2022; 87,139,831 shares issued and 86,291,473 shares outstanding at March 31, 2023 and 86,806,554 shares issued and 86,039,923 shares outstanding at December 31, 2022 | 871 | 868 |
Additional paid-in capital | 3,767,733 | 3,737,979 |
Accumulated deficit | (4,569,794) | (4,275,889) |
Treasury stock, cost basis, 848,358 shares at March 31, 2023 and 766,631 shares at December 31, 2022 | (91,226) | (90,659) |
Accumulated other comprehensive loss | (3,166) | (6,377) |
Total stockholders’ deficit | (895,582) | (634,078) |
Total liabilities and stockholders’ deficit | $ 1,542,699 | $ 2,258,679 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value per share (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, shares issued (in shares) | 87,139,831 | 86,806,554 |
Common stock, shares outstanding (in shares) | 86,291,473 | 86,039,923 |
Treasury stock (in shares) | 848,358 | 766,631 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Loss |
Balance beginning (in shares) at Dec. 31, 2021 | 76,433,151 | |||||
Balance beginning at Dec. 31, 2021 | $ (351,673) | $ 764 | $ 3,351,967 | $ (3,617,950) | $ (85,101) | $ (1,353) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 32,933 | 32,933 | ||||
Stock issued under incentive programs (in shares) | 91,788 | |||||
Issuance of common stock, net of issuance costs | 1,230 | $ 1 | 2,029 | (800) | ||
Issuance of common stock, net of issuance costs (in shares) | 2,197,398 | |||||
Issuance of common stock, net of issuance costs | 179,385 | $ 22 | 179,363 | |||
Foreign currency translation adjustment | 41 | 41 | ||||
Net income (loss) | 203,408 | 203,408 | ||||
Balance ending (in shares) at Mar. 31, 2022 | 78,722,337 | |||||
Balance ending at Mar. 31, 2022 | $ 65,324 | $ 787 | 3,566,292 | (3,414,542) | (85,901) | (1,312) |
Balance beginning (in shares) at Dec. 31, 2022 | 86,039,923 | 86,806,554 | ||||
Balance beginning at Dec. 31, 2022 | $ (634,078) | $ 868 | 3,737,979 | (4,275,889) | (90,659) | (6,377) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 28,647 | 28,647 | ||||
Stock issued under incentive programs (in shares) | 333,277 | |||||
Issuance of common stock, net of issuance costs | 543 | $ 3 | 1,107 | (567) | ||
Foreign currency translation adjustment | 3,211 | 3,211 | ||||
Net income (loss) | $ (293,905) | (293,905) | ||||
Balance ending (in shares) at Mar. 31, 2023 | 86,291,473 | 87,139,831 | ||||
Balance ending at Mar. 31, 2023 | $ (895,582) | $ 871 | $ 3,767,733 | $ (4,569,794) | $ (91,226) | $ (3,166) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Issuance of common stock, issuance costs | $ 2,311 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating Activities: | ||
Net income (loss) | $ (293,905) | $ 203,408 |
Reconciliation of net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 9,043 | 6,765 |
Non-cash stock-based compensation | 28,647 | 32,933 |
Provision for excess and obsolete inventory | 12,490 | 0 |
Right-of-use assets expensed, net of credits received | 0 | 214 |
Other items, net | (1,252) | 634 |
Changes in operating assets and liabilities: | ||
Inventory | (9,222) | (99,557) |
Accounts receivable, prepaid expenses, and other assets | 18,430 | (56,016) |
Accounts payable, accrued expenses, and other liabilities | (230,099) | (115,500) |
Deferred revenue | 140,275 | (61,391) |
Net cash used in operating activities | (325,593) | (88,510) |
Investing Activities: | ||
Capital expenditures | (19,801) | (16,826) |
Internal-use software | (3,757) | 0 |
Net cash used in investing activities | (23,558) | (16,826) |
Financing Activities: | ||
Net proceeds from sales of common stock | 0 | 179,385 |
Net proceeds from the exercise of stock-based awards | 543 | 1,318 |
Finance lease payments | (26,331) | (20,838) |
Repayment of 2023 Convertible notes | (325,000) | 0 |
Payments of costs related to issuance of 2027 Convertible notes | (3,591) | 0 |
Net cash provided by (used in) financing activities | (354,379) | 159,865 |
Effect of exchange rate on cash, cash equivalents, and restricted cash | (8,372) | 1,312 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (711,902) | 55,841 |
Cash, cash equivalents, and restricted cash at beginning of period | 1,348,845 | 1,528,259 |
Cash, cash equivalents, and restricted cash at end of period | 636,943 | 1,584,100 |
Supplemental disclosure of non-cash activities: | ||
Right-of-use assets from new lease agreements | 0 | 58,352 |
Capital expenditures included in accounts payable and accrued expenses | 10,847 | 15,874 |
Supplemental disclosure of cash flow information: | ||
Cash interest payments, net of amounts capitalized | 6,566 | 6,654 |
Cash paid for income taxes | $ 0 | $ 15,451 |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Novavax, Inc. (“Novavax,” and together with its wholly owned subsidiaries, the “Company”) is a biotechnology company that promotes improved health globally through the discovery, development, and commercialization of innovative vaccines to prevent serious infectious diseases. The Company’s COVID-19 vaccine (“NVX-CoV2373,” “Nuvaxovid™,” “Covovax™,” “Novavax COVID-19 Vaccine, Adjuvanted”); influenza vaccine candidate; COVID-19-Influenza Combination (“CIC”) vaccine candidate; and additional vaccine candidates, including for Omicron subvariants and bivalent formulations with prototype vaccine (“NVX-CoV2373”), are genetically engineered nanostructures of conformationally correct recombinant proteins critical to disease pathogenesis and may elicit differentiated immune responses, which may be more efficacious than naturally occurring immunity or other vaccine approaches. NVX-CoV2373 and the Company’s other vaccine candidates incorporate the Company's proprietary Matrix-M™ adjuvant to enhance the immune response and stimulate higher levels of functional antibodies and induce a cellular immune response. The Company has announced data from its ongoing PREVENT-19 study supporting the use of NVX-CoV2373 for homologous boosting in adults and adolescents aged 12 through 17. Additional findings in Phase 3 COVID-19 Omicron (study 311) trial showed utility of the prototype vaccine as a heterologous booster, inducing broad immune responses against contemporary Omicron variants. The Company has received approval, interim authorization, provisional approval, conditional marketing authorization, and emergency use authorization (“EUA”) from multiple regulatory authorities globally for NVX-CoV2373 for both adult and adolescent populations as a primary series and for both homologous and heterologous booster indications, and commenced commercial shipments of NVX-CoV2373 doses under the name “Novavax COVID-19 Vaccine, Adjuvanted” and the brand name “Nuvaxovid™” during the first quarter 2022. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated financial statements are unaudited but include all adjustments (consisting of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position, operating results, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for the periods presented. Although the Company believes that the disclosures in these unaudited consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The unaudited consolidated financial statements include the accounts of Novavax, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Accumulated other comprehensive loss included a foreign currency translation loss of $3.2 million and $6.4 million at March 31, 2023 and December 31, 2022, respectively. The aggregate foreign currency transaction gains resulting from the conversion of the transaction currency to functional currency were $16.3 million and $2.2 million for the three months ended March 31, 2023 and 2022, respectively, which are reflected in Other income. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Results for this or any interim period are not necessarily indicative of results for any future interim period or for the entire year. The Company operates in one business segment. Liquidity and Going Concern The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern within one year after the date that the financial statements are issued. At March 31, 2023, the Company had $636.9 million in cash and cash equivalents and restricted cash. In April 2023, the Company repaid $112.5 million related to the refund due under the Amended and Restated SARS-CoV-2 Vaccine Supply Agreement, dated July 1, 2022, as further amended on September 26, 2022, (the “Amended and Restated UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland, which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020, between the parties, and $27.0 million related to a Settlement Agreement and Release of Claims between the Company and Par Sterile Products, LLC (“Par”), as described in Note 15 below, which was fully accrued as of March 31, 2023. During the three months ended March 31, 2023, the Company incurred a net loss of $293.9 million and had net cash flows used in operating activities of $325.6 million. In accordance with Accounting Standards Codification 205-40, Going Concern , the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that these unaudited consolidated financial statements are issued. While the Company’s current cash flow forecast for the one-year going concern look forward period estimates that there will be sufficient capital available to fund operations, this forecast is subject to significant uncertainty, including as it relates to revenue for the next 12 months, funding from the U.S. government, and a pending matter subject to arbitration proceedings. The Company’s revenue projections depend on its ability to successfully develop, manufacture, distribute, and market an updated monovalent or bivalent formulation of a vaccine candidate for COVID-19 for the Fall 2023 COVID vaccine season, which is inherently uncertain and subject to a number of risks, including regulatory approval and commercial adoption. In February 2023, in connection with the execution of Modification 17 to the USG Agreement (as defined in Note 3), the U.S. government indicated to the Company that the award may not be extended past its current period of performance. If the USG Agreement is not amended, as the Company’s management had previously expected, then the Company may not receive all of the remaining $336.4 million in funding that was previously anticipated pursuant to the USG Agreement. On January 24, 2023, Gavi, the Vaccine Alliance (“Gavi”) filed a demand for arbitration with the International Court of Arbitration regarding an alleged material breach by the Company of the Company’s advance purchase agreement with Gavi (the “Gavi APA”). The outcome of that arbitration is inherently uncertain, and it is possible the Company could be required to refund all or a portion of the remaining advance payments of $697.4 million (see Note 3 and Note 15). Management believes that, given the significance of these uncertainties, substantial doubt exists regarding the Company’s ability to continue as a going concern through one year from the date that these financial statements are issued. In May 2023, the Company announced a global restructuring and cost reduction plan. This plan includes a more focused investment in its NVX-CoV2373 program, reduction to its pipeline spending, the continued rationalization of its manufacturing network, a reduction to the Company’s global workforce, as well as the consolidation of facilities and infrastructure. The planned workforce reduction includes an approximately 25% reduction in the Company’s global workforce, comprised of an approximately 20% reduction in full-time Novavax employees and the remainder comprised of contractors and consultants. The Company expects the full annual impact of the cost savings to be realized in 2024 and approximately half of the annual impact to be realized in 2023 due to timing of implementing the measures, and the applicable laws, regulations, and other factors in the jurisdictions in which the Company operates. The Company expects to record a charge of approximately $10 million to $15 million related to one-time employee severance and benefit costs, the majority of which are expected to be incurred in the second quarter of 2023 and is evaluating the anticipated costs related to the consolidation of facilities and infrastructure. The Company’s ability to fund Company operations is dependent upon revenue related to vaccine sales for its products and product candidates, if such product candidates receive marketing approval and are successfully commercialized; the resolution of certain matters, including whether, when, and how the dispute with Gavi is resolved; and management’s plans, which include resolving the dispute with Gavi and cost reductions associated with the Company’s global restructuring and cost reduction plan. Management’s plans may also include raising additional capital through a combination of equity and debt financing, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements. New financings may not be available to the Company on commercially acceptable terms, or at all. Also, any collaborations, strategic alliances, and marketing, distribution, or licensing arrangements may require the Company to give up some or all of its rights to a product or technology, which in some cases may be at less than the full potential value of such rights. In addition, the regulatory and commercial success of NVX-CoV2373 and the Company’s other vaccine candidates, including an influenza vaccine candidate, a CIC vaccine candidate, and a COVID-19 variant strain-containing monovalent or bivalent formulation, remains uncertain. If the Company is unable to obtain additional capital, the Company will assess its capital resources and may be required to delay, reduce the scope of, or eliminate some or all of its operations, or further downsize its organization, any of which may have a material adverse effect on its business, financial condition, results of operations, and ability to operate as a going concern. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Revenue Recognition Constraints The Company constrains the transaction price for customer arrangements until it is probable that a significant reversal in cumulative revenue recognized will not occur. Specifically, if a customer arrangement includes a provision whereby the customer may request a discount, return or refund for a previously satisfied performance obligation or otherwise could have the effect of decreasing the transaction price, revenue is constrained based on an estimate of the impact to the transaction price recognized until it is probable that a significant reversal in cumulative revenue recognized will not occur. Recent Accounting Pronouncements Adopted In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), with amendments in 2018, 2019, 2020, and 2022. The ASU sets forth a “current expected credit loss” model that requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. ASU 2016-13 applies to financial instruments that are not measured at fair value, including receivables that result from revenue transactions. The Company adopted ASU 2020-06 on January 1, 2023, using a modified retrospective approach, and it did not have a material impact on the Company’s consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Grants, U.S. Government Contract and Joint Venture [Abstract] | |
Revenue | Revenue The Company's accounts receivable included $70.2 million, $53.8 million, $425.9 million, and $419.7 million related to amounts that were billed to customers and $42.7 million, $28.6 million, $52.3 million, and $35.3 million related to amounts which had not yet been billed to customers as of March 31, 2023, December 31, 2022, March 31, 2022, and December 31, 2021, respectively. During the three months ended March 31, 2023 and 2022, changes in the Company's accounts receivables, allowance for doubtful accounts, and deferred revenue balances were as follows (in thousands): Balance, Beginning of Period Additions Deductions Balance, End of Period Accounts receivable: Three months ended March 31, 2023 $ 96,210 $ 146,424 $ (115,950) $ 126,684 Three months ended March 31, 2022 454,993 625,124 (601,961) 478,156 Allowance for doubtful accounts (1) : Three months ended March 31, 2023 $ (13,835) $ — $ — $ (13,835) Three months ended March 31, 2022 — — — — Deferred revenue: Three months ended March 31, 2023 $ 549,551 $ 140,324 $ (49) $ 689,826 Three months ended March 31, 2022 1,595,472 49,094 (108,586) 1,535,980 (1) There was no bad debt expense recorded during the three months ended March 31, 2023 or 2022. To estimate the allowance for doubtful accounts, the Company evaluates the credit risk related to its customers based on historical loss experience, economic conditions, the aging of receivables, and customer-specific risks. As of March 31, 2023, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties, the Gavi APA, and the reduction in doses related to the Amended and Restated UK Supply Agreement, was approximately $3 billion of which $689.8 million was included in Deferred revenue. Failure to meet regulatory milestones, timely obtain supportive recommendations from governmental advisory committees, or achieve product volume or delivery timing obligations under the Company’s advance purchase agreements (“APAs”) may require the Company to refund portions of upfront payments or result in reduced future payments, which could adversely impact the Company’s ability to realize revenue from its unsatisfied performance obligations. The timing to fulfill performance obligations related to grant agreements will depend on the results of the Company's research and development activities, including clinical trials, and delivery of doses. The timing to fulfill performance obligations related to APAs will depend on timing of product manufacturing, receipt of marketing authorizations for additional indications, delivery of doses based on customer demand, and the ability of the customer to request variant vaccine in place of the prototype NVX-CoV2373 vaccine under certain of our APAs. The remaining unfilled performance obligations not related to grant agreements or APAs are expected to be fulfilled in less than 12 months. Under the terms of the Gavi APA and a separate purchase agreement between Gavi and Serum Institute of India Pvt. Ltd. (“SIIPL”), 1.1 billion doses of NVX-CoV2373 were to be made available to countries participating in the COVAX Facility. The Company expected to manufacture and distribute 350 million doses of NVX-CoV2373 to countries participating under the COVAX Facility. Under a separate purchase agreement with Gavi, SIIPL was expected to manufacture and deliver the balance of the 1.1 billion doses of NVX-CoV2373 for low- and middle-income countries participating in the COVAX Facility. The Company expected to deliver doses with antigen and adjuvant manufactured at facilities directly funded under the Company's funding agreement with Coalition for Epidemic Preparedness Innovations (“CEPI”), with initial doses supplied by SIIPL and Serum Life Sciences Limited (“SLS”) under a supply agreement. The Company expected to supply significant doses that Gavi would allocate to low-, middle- and high-income countries, subject to certain limitations, utilizing a tiered pricing schedule and Gavi could prioritize such doses to low- and middle- income countries, at lower prices. Additionally, the Company could provide additional doses of NVX-CoV2373, to the extent available from CEPI-funded manufacturing facilities, in the event that SIIPL could not materially deliver expected vaccine doses to the COVAX Facility. Under the agreement, the Company received an upfront payment of $350.0 million from Gavi in 2021 and an additional payment of $350 million in 2022 related to the Company’s achieving an emergency use license for NVX-CoV2373 by the WHO (the “Advance Payment Amount”). On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA on the basis of Gavi’s failure to procure the purchase of 350 million doses of NVX-CoV2373 from the Company as required by the Gavi APA. As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses. On December 2, 2022, Gavi issued a written notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the Gavi APA. Gavi also contends that, based on its purported termination of the Gavi APA, it is entitled to a refund of the Advance Payment Amount less any amounts that have been credited against the purchase price for binding orders placed by a buyer participating in the COVAX Facility. As of March 31, 2023, the remaining Gavi Advance Payment Amount of $697.4 million, pending resolution of the dispute with Gavi related to a return of the remaining Advance Payment Amount, was reclassified from Deferred revenue to Other current liabilities in the Company’s consolidated balance sheets. On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above. The Company filed its Answer and Counterclaims on March 2, 2023. On April 5, 2023, Gavi filed its Reply to the Company’s Counterclaims. Arbitration is inherently uncertain, and while the Company believes that it is entitled to retain the remaining Advance Payment Amount received from Gavi, it is possible that it could be required to refund all or a portion of the remaining Advance Payment Amount from Gavi. Product Sales Product sales by the Company’s customer’s geographic location was as follows (in thousands): Three Months Ended 2023 2022 North America $ — $ 64,762 Europe 57,267 413,745 Rest of the world (64,724) 107,121 Total product revenue $ (7,457) $ 585,628 In May 2023, the Company extended a credit for certain doses delivered in 2022 that qualified for replacement under the contract with the customer. This credit is the result of a single lot sold to the Australian government that upon pre-planned 6-month stability testing was found to have fallen below the defined specifications and the lot was therefore removed from the market. The credit will be applied against the future sale of doses to the customer and, during the three months ended March 31, 2023, the Company recorded a reduction of $64.7 million in product sales, with a corresponding increase to Deferred revenue, non-current. Grants The Company’s U.S. government agreement consists of a Project Agreement (the “Project Agreement”) and a Base Agreement with Advanced Technology International, the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with the partnership formerly known as Operation Warp Speed (the Base Agreement together with the Project Agreement are referred to as the “USG Agreement”). In February 2023, in connection with the execution of Modification 17 to the Project Agreement, the U.S. government indicated to the Company that the award may not be extended past its current period of performance, December 31, 2023. Also, Modification 17 included provisions requiring that the payment of $60.0 million of consideration associated with manufacturing work now be contingent upon meeting certain milestones, including the delivery of up to 1.5 million doses of NVX-CoV2373 and development and regulatory milestones related to commercial readiness, expansion of the EUA and development of multiple vial presentations. As of March 31, 2023, the Company constrained the total transaction price by $48.0 million for consideration associated with milestones that are not fully within the Company’s control. This constraint, in addition to other contract changes included within Modification 17, resulted in an approximately $29 million cumulative reduction to revenue previously recognized under the contract for the three months ended March 31, 2023. Royalties and Other Serum Institute The Company previously granted SIIPL exclusive and non-exclusive licenses for the development, co-formulation, filling and finishing, registration, and commercialization of NVX-CoV2373, its proprietary COVID-19 variant antigen candidate(s), its quadrivalent influenza vaccine candidate, and its CIC vaccine candidate. SIIPL agreed to purchase the Company's Matrix-M™ adjuvant and the Company granted SIIPL a non-exclusive license to manufacture the antigen drug substance component of NVX-CoV2373 in SIIPL’s licensed territory solely for use in the manufacture of NVX-CoV2373. The Company and SIIPL equally split the revenue from SIIPL’s sale of NVX-CoV2373 in its licensed territory, net of agreed costs. The Company also has a supply agreement with SIIPL and SLS under which SIIPL and SLS supply the Company with NVX-CoV2373, its proprietary COVID-19 variant antigen candidate(s), its quadrivalent influenza vaccine candidate, and its CIC vaccine candidate for commercialization and sale in certain territories, as well as a contract development manufacture agreement with SLS, under which SLS manufactures and supplies finished vaccine product to the Company using antigen drug substance and Matrix-M™ adjuvant supplied by the Company. In March 2020, the Company granted SIIPL a non-exclusive license for the use of Matrix-M™ adjuvant supplied by the Company to develop, manufacture, and commercialize R21, a malaria candidate developed by the Jenner Institute, University of Oxford (“R21/Malaria”). Under the agreement, SIIPL purchases the Company's Matrix-M™ adjuvant to manufacture R21/Malaria and SIIPL pays a royalty in the single to low double-digit range for a period of 15 years after the first commercial sale of product in each country. Takeda Pharmaceutical Company Limited The Company has a collaboration and license agreement with Takeda Pharmaceutical Company Limited (“Takeda”) under which the Company granted Takeda an exclusive license to develop, manufacture, and commercialize NVX-CoV2373 in Japan. Under the agreement, Takeda purchases Matrix-M™ adjuvant from the Company to manufacture doses of NVX-CoV2373 and the Company is entitled to receive payments from Takeda based on the achievement of certain development and commercial milestones, as well as a portion of net profits from the sale of NVX-CoV2373. In September 2021, Takeda finalized an agreement with the Government of Japan’s Ministry of Health, Labour and Welfare ("MHLW") for the purchase of 150 million doses of NVX-CoV2373. In February 2023, MHLW cancelled the remainder of doses under its agreement with Takeda. As a result, it is uncertain whether the Company will receive future payments from Takeda under the terms and conditions of their current collaboration and licensing agreement. Other Supply Agreements On September 30, 2022, the Company, FUJIFILM Diosynth Biotechnologies UK Limited (“FDBK”), FUJIFILM Diosynth Biotechnologies Texas, LLC (“FDBT”), and FUJIFILM Diosynth Biotechnologies USA, Inc. (“FDBU” and together with FDBK and FDBT, “Fujifilm”) entered into a Confidential Settlement Agreement and Release (the “Fujifilm Settlement Agreement”) regarding amounts due to Fujifilm in connection with the termination of manufacturing activity at FDBT under the Commercial Supply Agreement (the “CSA”) dated August 20, 2021 and Master Services Agreement dated June 30, 2020 and associated statements of work (the “MSA”) by and between the Company and Fujifilm. The MSA and CSA established the general terms and conditions applicable to Fujifilm’s manufacturing and supply activities related to NVX-CoV2373 under the associated statements of work. Pursuant to the Fujifilm Settlement Agreement, the Company is responsible for payment of up to $185.0 million (the “Settlement Payment”) to Fujifilm in connection with cancellation of manufacturing activity at FDBT under the CSA, of which (i) $47.8 million, constituting the initial reservation fee under the CSA, was credited against the Settlement Payment on September 30, 2022 and (ii) the remaining balance is to be paid in four equal quarterly installments of $34.3 million each, which began on March 31, 2023. As of March 31, 2023, the remaining payment of $102.9 million was reflected in Accrued expenses. Under the Fujifilm Settlement Agreement, Fujifilm is required to use commercially reasonable efforts to mitigate the losses associated with the vacant manufacturing capacity caused by the termination of manufacturing activities at FDBT under the Fujifilm CSA, and the final two quarterly installments will be mitigated by any replacement revenue achieved by Fujifilm between July 1, 2023 and December 31, 2023. The Company continues to assess its manufacturing needs and intends to modify its global manufacturing footprint consistent with its contractual obligations to supply, and anticipated demand for, NVX-CoV2373, and in doing so, recognizes that significant costs may be incurred. |
Collaboration, License, and Sup
Collaboration, License, and Supply Agreements | 3 Months Ended |
Mar. 31, 2023 | |
Collaborative Arrangement [Abstract] | |
Collaboration, License, and Supply Agreements | Revenue The Company's accounts receivable included $70.2 million, $53.8 million, $425.9 million, and $419.7 million related to amounts that were billed to customers and $42.7 million, $28.6 million, $52.3 million, and $35.3 million related to amounts which had not yet been billed to customers as of March 31, 2023, December 31, 2022, March 31, 2022, and December 31, 2021, respectively. During the three months ended March 31, 2023 and 2022, changes in the Company's accounts receivables, allowance for doubtful accounts, and deferred revenue balances were as follows (in thousands): Balance, Beginning of Period Additions Deductions Balance, End of Period Accounts receivable: Three months ended March 31, 2023 $ 96,210 $ 146,424 $ (115,950) $ 126,684 Three months ended March 31, 2022 454,993 625,124 (601,961) 478,156 Allowance for doubtful accounts (1) : Three months ended March 31, 2023 $ (13,835) $ — $ — $ (13,835) Three months ended March 31, 2022 — — — — Deferred revenue: Three months ended March 31, 2023 $ 549,551 $ 140,324 $ (49) $ 689,826 Three months ended March 31, 2022 1,595,472 49,094 (108,586) 1,535,980 (1) There was no bad debt expense recorded during the three months ended March 31, 2023 or 2022. To estimate the allowance for doubtful accounts, the Company evaluates the credit risk related to its customers based on historical loss experience, economic conditions, the aging of receivables, and customer-specific risks. As of March 31, 2023, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties, the Gavi APA, and the reduction in doses related to the Amended and Restated UK Supply Agreement, was approximately $3 billion of which $689.8 million was included in Deferred revenue. Failure to meet regulatory milestones, timely obtain supportive recommendations from governmental advisory committees, or achieve product volume or delivery timing obligations under the Company’s advance purchase agreements (“APAs”) may require the Company to refund portions of upfront payments or result in reduced future payments, which could adversely impact the Company’s ability to realize revenue from its unsatisfied performance obligations. The timing to fulfill performance obligations related to grant agreements will depend on the results of the Company's research and development activities, including clinical trials, and delivery of doses. The timing to fulfill performance obligations related to APAs will depend on timing of product manufacturing, receipt of marketing authorizations for additional indications, delivery of doses based on customer demand, and the ability of the customer to request variant vaccine in place of the prototype NVX-CoV2373 vaccine under certain of our APAs. The remaining unfilled performance obligations not related to grant agreements or APAs are expected to be fulfilled in less than 12 months. Under the terms of the Gavi APA and a separate purchase agreement between Gavi and Serum Institute of India Pvt. Ltd. (“SIIPL”), 1.1 billion doses of NVX-CoV2373 were to be made available to countries participating in the COVAX Facility. The Company expected to manufacture and distribute 350 million doses of NVX-CoV2373 to countries participating under the COVAX Facility. Under a separate purchase agreement with Gavi, SIIPL was expected to manufacture and deliver the balance of the 1.1 billion doses of NVX-CoV2373 for low- and middle-income countries participating in the COVAX Facility. The Company expected to deliver doses with antigen and adjuvant manufactured at facilities directly funded under the Company's funding agreement with Coalition for Epidemic Preparedness Innovations (“CEPI”), with initial doses supplied by SIIPL and Serum Life Sciences Limited (“SLS”) under a supply agreement. The Company expected to supply significant doses that Gavi would allocate to low-, middle- and high-income countries, subject to certain limitations, utilizing a tiered pricing schedule and Gavi could prioritize such doses to low- and middle- income countries, at lower prices. Additionally, the Company could provide additional doses of NVX-CoV2373, to the extent available from CEPI-funded manufacturing facilities, in the event that SIIPL could not materially deliver expected vaccine doses to the COVAX Facility. Under the agreement, the Company received an upfront payment of $350.0 million from Gavi in 2021 and an additional payment of $350 million in 2022 related to the Company’s achieving an emergency use license for NVX-CoV2373 by the WHO (the “Advance Payment Amount”). On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA on the basis of Gavi’s failure to procure the purchase of 350 million doses of NVX-CoV2373 from the Company as required by the Gavi APA. As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses. On December 2, 2022, Gavi issued a written notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the Gavi APA. Gavi also contends that, based on its purported termination of the Gavi APA, it is entitled to a refund of the Advance Payment Amount less any amounts that have been credited against the purchase price for binding orders placed by a buyer participating in the COVAX Facility. As of March 31, 2023, the remaining Gavi Advance Payment Amount of $697.4 million, pending resolution of the dispute with Gavi related to a return of the remaining Advance Payment Amount, was reclassified from Deferred revenue to Other current liabilities in the Company’s consolidated balance sheets. On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above. The Company filed its Answer and Counterclaims on March 2, 2023. On April 5, 2023, Gavi filed its Reply to the Company’s Counterclaims. Arbitration is inherently uncertain, and while the Company believes that it is entitled to retain the remaining Advance Payment Amount received from Gavi, it is possible that it could be required to refund all or a portion of the remaining Advance Payment Amount from Gavi. Product Sales Product sales by the Company’s customer’s geographic location was as follows (in thousands): Three Months Ended 2023 2022 North America $ — $ 64,762 Europe 57,267 413,745 Rest of the world (64,724) 107,121 Total product revenue $ (7,457) $ 585,628 In May 2023, the Company extended a credit for certain doses delivered in 2022 that qualified for replacement under the contract with the customer. This credit is the result of a single lot sold to the Australian government that upon pre-planned 6-month stability testing was found to have fallen below the defined specifications and the lot was therefore removed from the market. The credit will be applied against the future sale of doses to the customer and, during the three months ended March 31, 2023, the Company recorded a reduction of $64.7 million in product sales, with a corresponding increase to Deferred revenue, non-current. Grants The Company’s U.S. government agreement consists of a Project Agreement (the “Project Agreement”) and a Base Agreement with Advanced Technology International, the Consortium Management Firm acting on behalf of the Medical CBRN Defense Consortium in connection with the partnership formerly known as Operation Warp Speed (the Base Agreement together with the Project Agreement are referred to as the “USG Agreement”). In February 2023, in connection with the execution of Modification 17 to the Project Agreement, the U.S. government indicated to the Company that the award may not be extended past its current period of performance, December 31, 2023. Also, Modification 17 included provisions requiring that the payment of $60.0 million of consideration associated with manufacturing work now be contingent upon meeting certain milestones, including the delivery of up to 1.5 million doses of NVX-CoV2373 and development and regulatory milestones related to commercial readiness, expansion of the EUA and development of multiple vial presentations. As of March 31, 2023, the Company constrained the total transaction price by $48.0 million for consideration associated with milestones that are not fully within the Company’s control. This constraint, in addition to other contract changes included within Modification 17, resulted in an approximately $29 million cumulative reduction to revenue previously recognized under the contract for the three months ended March 31, 2023. Royalties and Other Serum Institute The Company previously granted SIIPL exclusive and non-exclusive licenses for the development, co-formulation, filling and finishing, registration, and commercialization of NVX-CoV2373, its proprietary COVID-19 variant antigen candidate(s), its quadrivalent influenza vaccine candidate, and its CIC vaccine candidate. SIIPL agreed to purchase the Company's Matrix-M™ adjuvant and the Company granted SIIPL a non-exclusive license to manufacture the antigen drug substance component of NVX-CoV2373 in SIIPL’s licensed territory solely for use in the manufacture of NVX-CoV2373. The Company and SIIPL equally split the revenue from SIIPL’s sale of NVX-CoV2373 in its licensed territory, net of agreed costs. The Company also has a supply agreement with SIIPL and SLS under which SIIPL and SLS supply the Company with NVX-CoV2373, its proprietary COVID-19 variant antigen candidate(s), its quadrivalent influenza vaccine candidate, and its CIC vaccine candidate for commercialization and sale in certain territories, as well as a contract development manufacture agreement with SLS, under which SLS manufactures and supplies finished vaccine product to the Company using antigen drug substance and Matrix-M™ adjuvant supplied by the Company. In March 2020, the Company granted SIIPL a non-exclusive license for the use of Matrix-M™ adjuvant supplied by the Company to develop, manufacture, and commercialize R21, a malaria candidate developed by the Jenner Institute, University of Oxford (“R21/Malaria”). Under the agreement, SIIPL purchases the Company's Matrix-M™ adjuvant to manufacture R21/Malaria and SIIPL pays a royalty in the single to low double-digit range for a period of 15 years after the first commercial sale of product in each country. Takeda Pharmaceutical Company Limited The Company has a collaboration and license agreement with Takeda Pharmaceutical Company Limited (“Takeda”) under which the Company granted Takeda an exclusive license to develop, manufacture, and commercialize NVX-CoV2373 in Japan. Under the agreement, Takeda purchases Matrix-M™ adjuvant from the Company to manufacture doses of NVX-CoV2373 and the Company is entitled to receive payments from Takeda based on the achievement of certain development and commercial milestones, as well as a portion of net profits from the sale of NVX-CoV2373. In September 2021, Takeda finalized an agreement with the Government of Japan’s Ministry of Health, Labour and Welfare ("MHLW") for the purchase of 150 million doses of NVX-CoV2373. In February 2023, MHLW cancelled the remainder of doses under its agreement with Takeda. As a result, it is uncertain whether the Company will receive future payments from Takeda under the terms and conditions of their current collaboration and licensing agreement. Other Supply Agreements On September 30, 2022, the Company, FUJIFILM Diosynth Biotechnologies UK Limited (“FDBK”), FUJIFILM Diosynth Biotechnologies Texas, LLC (“FDBT”), and FUJIFILM Diosynth Biotechnologies USA, Inc. (“FDBU” and together with FDBK and FDBT, “Fujifilm”) entered into a Confidential Settlement Agreement and Release (the “Fujifilm Settlement Agreement”) regarding amounts due to Fujifilm in connection with the termination of manufacturing activity at FDBT under the Commercial Supply Agreement (the “CSA”) dated August 20, 2021 and Master Services Agreement dated June 30, 2020 and associated statements of work (the “MSA”) by and between the Company and Fujifilm. The MSA and CSA established the general terms and conditions applicable to Fujifilm’s manufacturing and supply activities related to NVX-CoV2373 under the associated statements of work. Pursuant to the Fujifilm Settlement Agreement, the Company is responsible for payment of up to $185.0 million (the “Settlement Payment”) to Fujifilm in connection with cancellation of manufacturing activity at FDBT under the CSA, of which (i) $47.8 million, constituting the initial reservation fee under the CSA, was credited against the Settlement Payment on September 30, 2022 and (ii) the remaining balance is to be paid in four equal quarterly installments of $34.3 million each, which began on March 31, 2023. As of March 31, 2023, the remaining payment of $102.9 million was reflected in Accrued expenses. Under the Fujifilm Settlement Agreement, Fujifilm is required to use commercially reasonable efforts to mitigate the losses associated with the vacant manufacturing capacity caused by the termination of manufacturing activities at FDBT under the Fujifilm CSA, and the final two quarterly installments will be mitigated by any replacement revenue achieved by Fujifilm between July 1, 2023 and December 31, 2023. The Company continues to assess its manufacturing needs and intends to modify its global manufacturing footprint consistent with its contractual obligations to supply, and anticipated demand for, NVX-CoV2373, and in doing so, recognizes that significant costs may be incurred. |
Earnings (Loss) per Share
Earnings (Loss) per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share | Earnings (Loss) per Share Basic and diluted net income (loss) per share were calculated as follows (in thousands, except per share data): Three Months Ended 2023 2022 Numerator: Net income (loss), basic $ (293,905) $ 203,408 Interest on convertible notes, net — 3,403 Net income (loss), dilutive (293,905) 206,811 Denominator: Weighted average number of common shares outstanding, basic 86,158 76,457 Effect of dilutive securities — 4,254 Weighted average number of common shares outstanding, dilutive 86,158 80,711 Net income (loss) per share: Basic $ (3.41) $ 2.66 Diluted $ (3.41) $ 2.56 Anti-dilutive securities excluded from calculations of diluted net income (loss) per share 23,971 1,474 |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 3 Months Ended |
Mar. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets that sums to the total of such amounts shown in the consolidated statements of cash flows (in thousands): March 31, 2023 December 31, 2022 Cash and cash equivalents $ 624,950 $ 1,336,883 Restricted cash, current 10,330 10,303 Restricted cash, non-current (1) 1,663 1,659 Cash, cash equivalents, and restricted cash $ 636,943 $ 1,348,845 (1) Classified as Other non-current assets as of March 31, 2023 and December 31, 2022, on the consolidated balance sheets. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table represents the Company’s fair value hierarchy for its financial assets and liabilities (in thousands): Fair Value at March 31, 2023 Fair Value at December 31, 2022 Assets Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Money market funds (1) $ 152,786 $ — $ — $ 398,834 $ — $ — Government-backed securities (1) — 296,000 — — 296,000 — Corporate debt securities (1) — 4,991 — — — — Agency securities (1) — — — — 104,536 — Total cash equivalents $ 152,786 $ 300,991 $ — $ 398,834 $ 400,536 $ — Liabilities 5.00% Convertible notes due 2027 $ — $ 103,811 $ — $ — $ 172,789 $ — 3.75% Convertible notes due 2023 — — — — 322,111 — Total convertible notes payable $ — $ 103,811 $ — $ — $ 494,900 $ — (1) All investments are classified as Cash and cash equivalents as of March 31, 2023 and December 31, 2022, on the consolidated balance sheets. Fixed-income investments categorized as Level 2 are valued at the custodian bank by a third-party pricing vendor’s valuation models that use verifiable observable market data, such as interest rates and yield curves observable at commonly quoted intervals and credit spreads, bids provided by brokers or dealers, or quoted prices of securities with similar characteristics. Pricing of the Company’s convertible notes has been estimated using observable inputs, including the price of the Company’s common stock, implied volatility, interest rates, and credit spreads. During the three months ended March 31, 2023 and 2022, the Company did not have any transfers between levels . The amount in the Company’s consolidated balance sheets for accounts payable and accrued expenses approximates its fair value due to its short-term nature. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consisted of the following (in thousands): March 31, 2023 December 31, 2022 Raw materials $ 12,320 $ 13,912 Semi-finished goods 13,108 21,410 Finished goods 8,757 1,361 Total inventory $ 34,185 $ 36,683 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The Company has one reporting unit, which has a negative equity value as of ended March 31, 2023 and December 31, 2022. The change in the carrying amounts of goodwill for the three months ended March 31, 2023 was as follows (in thousands): Amount Balance at December 31, 2022 $ 126,331 Currency translation adjustments 3,496 Balance at March 31, 2023 $ 129,827 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company has embedded leases related to supply agreements with contract manufacturing organizations (“CMOs”) and contract manufacturing and development organizations to manufacture NVX-CoV2373, as well as operating leases for its research and development and manufacturing facilities, corporate headquarters and offices, and certain equipment. During the three months ended March 31, 2023, the Company continued to align its global manufacturing footprint as a result of its ongoing assessment of manufacturing needs consistent with its contractual obligations related to the supply, and anticipated demand for, NVX-CoV2373. During the three months ended March 31, 2023, the Company recognized a short-term lease expense of $0.7 million, related to its embedded leases and no expense was recognized for the write off of right of use (“ROU”) assets that represented assets acquired for research and development activities that did not have an alternative future use at the commencement or modification of the lease. During the three months ended March 31, 2022, the Company recognized a short-term lease expense of $78.1 million, related to its embedded leases and expensed $10.4 million of ROU write off. During the three months ended March 31, 2023 and 2022, the Company recognized $0.5 million and $1.1 million, respectively, of interest expense on its finance lease liabilities. |
Leases | Leases The Company has embedded leases related to supply agreements with contract manufacturing organizations (“CMOs”) and contract manufacturing and development organizations to manufacture NVX-CoV2373, as well as operating leases for its research and development and manufacturing facilities, corporate headquarters and offices, and certain equipment. During the three months ended March 31, 2023, the Company continued to align its global manufacturing footprint as a result of its ongoing assessment of manufacturing needs consistent with its contractual obligations related to the supply, and anticipated demand for, NVX-CoV2373. During the three months ended March 31, 2023, the Company recognized a short-term lease expense of $0.7 million, related to its embedded leases and no expense was recognized for the write off of right of use (“ROU”) assets that represented assets acquired for research and development activities that did not have an alternative future use at the commencement or modification of the lease. During the three months ended March 31, 2022, the Company recognized a short-term lease expense of $78.1 million, related to its embedded leases and expensed $10.4 million of ROU write off. During the three months ended March 31, 2023 and 2022, the Company recognized $0.5 million and $1.1 million, respectively, of interest expense on its finance lease liabilities. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Total convertible notes payable consisted of the following (in thousands): March 31, 2023 December 31, 2022 Current portion: 3.75% Convertible notes due 2023 $ — $ 325,000 Unamortized debt issuance costs — (119) Total current convertible notes payable $ — $ 324,881 Non-current portion: 5.00% Convertible notes due 2027 $ 175,250 $ 175,250 Unamortized debt issuance costs and discount (8,393) (8,784) Total non-current convertible notes payable $ 166,857 $ 166,466 During the three months ended March 31, 2023, the Company repaid the outstanding principal amount of $325.0 million on its 3.75% Convertible notes due in 2023, together with accrued but unpaid interest on the maturity date. The repayment was funded by the issuance of the 5.00% Convertible notes due 2027 and the concurrent common stock offering in December 2022, as well as cash on hand. The interest expense incurred in connection with the Notes consisted of the following (in thousands): Three Months Ended 2023 2022 Coupon interest $ 3,206 $ 3,047 Amortization of debt issuance costs 510 356 Total interest expense on convertible notes payable $ 3,716 $ 3,403 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity (Deficit) | Stockholders' Equity (Deficit) In June 2021, the Company entered into an At Market Issuance Sales Agreement (the "June 2021 Sales Agreement"), which allows it to issue and sell up to $500 million in gross proceeds of shares of its common stock. As of March 31, 2023, the remaining balance available under the June 2021 Sales Agreement was approximately $318 million. There were no sales recorded under the June 2021 Sales Agreement during the three months ended March 31, 2023. During the three months ended March 31, 2022, the Company sold 2.2 million shares of its common stock resulting in net proceeds of approximately $179 million, under its June 2021 Sales Agreement. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Equity Plans In January 2023, the Company established the 2023 Inducement Plan (the “2023 Inducement Plan”), which provides for the granting of share-based awards to individuals who were not previously employees, or following a bona fide period of non-employment, as an inducement material to such individuals entering into employment with the Company. The Company reserved 1.0 million shares of common stock for grant under the 2023 Inducement Plan. As of March 31, 2023, there were 0.3 million shares available for issuance under the 2023 Inducement Plan. The 2015 Stock Incentive Plan, as amended (“2015 Plan”), was approved at the Company's annual meeting of stockholders in June 2015. Under the 2015 Plan, equity awards may be granted to officers, directors, employees, and consultants of and advisors to the Company and any present or future subsidiary. The 2015 Plan authorizes the issuance of up to 14.8 million shares of common stock under equity awards granted under the 2015 Plan. All such shares authorized for issuance under the 2015 Plan have been reserved. The 2015 Plan will expire on March 4, 2025. As of March 31, 2023, there were 0.5 million shares available for issuance under the 2015 Plan. The Amended and Restated 2005 Stock Incentive Plan (“2005 Plan”) expired in February 2015 and no new awards may be made under such plan, although awards will continue to be outstanding in accordance with their terms. The 2023 Inducement Plan and the 2015 Plan permit and the 2005 Plan permitted the grant of stock options (including incentive stock options), restricted stock, stock appreciation rights (“SARs”), and restricted stock units (“RSUs”). In addition, under the 2023 Inducement Plan and the 2015 Plan, unrestricted stock, stock units, and performance awards may be granted. Stock options and SARs generally have a maximum term of ten years and may be or were granted with an exercise price that is no less than 100% of the fair market value of the Company's common stock at the time of grant. Grants of share-based awards are generally subject to vesting over periods ranging from one The Company recorded stock-based compensation expense in the consolidated statements of operations as follows (in thousands): Three Months Ended 2023 2022 Cost of sales $ 519 $ — Research and development 13,858 16,887 Selling, general, and administrative 14,270 16,046 Total stock-based compensation expense $ 28,647 $ 32,933 Total stock-based compensation capitalized and included in inventory as of March 31, 2023 and December 31, 2022 was $1.7 million. As of March 31, 2023, there was approximately $174 million of total unrecognized compensation expense related to unvested stock options, SARs, RSUs, and the Company’s Employee Stock Purchase Plan, as amended (“ESPP”). This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of approximately one year. This estimate does not include the impact of other possible stock-based awards that may be made during future periods. The aggregate intrinsic value represents the total intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money stock options and SARs) that would have been received by the holders had all stock option and SAR holders exercised their stock options and SARs on March 31, 2023. This amount is subject to change based on changes to the closing price of the Company's common stock. The aggregate intrinsic value of stock options and SARs exercises and vesting of RSUs for the three months ended March 31, 2023 and 2022 was approximately $1.5 million and $5.6 million, respectively. Stock Options and Stock Appreciation Rights The following is a summary of stock options and SARs activity under the 2023 Inducement Plan, 2015 Plan, and 2005 Plan for the three months ended March 31, 2023: 2023 Inducement Plan 2015 Plan 2005 Plan Stock Weighted-Average Stock Weighted-Average Stock Weighted-Average Outstanding at December 31, 2022 — $ — 4,053,290 $ 46.07 63,725 $ 112.94 Granted 358,600 10.96 927,742 7.20 — — Exercised — — (5,031) 6.81 — — Canceled — — (15,835) 81.44 (5,250) 36.60 Outstanding at March 31, 2023 358,600 $ 10.96 4,960,166 $ 38.73 58,475 $ 119.80 Shares exercisable at March 31, 2023 — $ — 311,560 $ 40.60 58,475 $ 119.80 The fair value of stock options granted under the 2023 Inducement Plan and the 2015 Plan was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: Three Months Ended 2023 2022 Weighted average Black-Scholes fair value of stock options granted $7.19 $65.78 Risk-free interest rate 3.6%-4.0% 1.4%-2.0% Dividend yield —% —% Volatility 127.7%-140.3% 120.5%-130.6% Expected term (in years) 3.9-5.1 4.1-5.3 The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs outstanding under the 2023 Inducement Plan, 2015 Plan and 2005 Plan as of March 31, 2023 was approximately $0.9 million and 7.5 years, respectively. The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs exercisable under the 2023 Inducement Plan, 2015 Plan and 2005 Plan as of March 31, 2023 was approximately $0.7 million and 6.5 years, respectively. Restricted Stock Units The following is a summary of RSU activity for the three months ended March 31, 2023: 2023 Inducement Plan 2015 Plan Number of Per Share Number of Per Share Outstanding and unvested at December 31, 2022 — $ — 2,034,574 $ 61.67 Granted 308,390 $ 10.96 2,531,445 7.20 Vested — $ — (211,688) 87.25 Forfeited — $ — (88,570) 52.68 Outstanding and unvested at March 31, 2023 308,390 $ 10.96 4,265,761 $ 28.26 Employee Stock Purchase Plan The ESPP was approved at the Company's annual meeting of stockholders in June 2013. The ESPP currently authorizes an aggregate of 1.1 million shares of common stock to be purchased, and the aggregate amount of shares will continue to increase 5% on each anniversary of its adoption up to a maximum of 1.65 million shares. The ESPP allows employees to purchase shares of common stock of the Company at each purchase date through payroll deductions of up to a maximum of 15% of their compensation, at 85% of the lesser of the market price of the shares at the time of purchase or the market price on the beginning date of an option period (or, if later, the date during the option period when the employee was first eligible to participate). As of March 31, 2023, there were 0.5 million shares available for issuance under the ESPP. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company evaluates the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective evidence evaluated was the cumulative loss incurred over the three-year period ended March 31, 2023 and that the Company has historically generated pretax losses. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. On the basis of this evaluation, as of March 31, 2023, the Company continued to maintain a full valuation allowance against its deferred tax assets, except to the extent Net Operating Losses (“NOLs”) have been used to reduce taxable income. The Company’s remaining U.S. Federal NOLs are subject to limitation in accordance with the 2017 Tax Cuts and Jobs Act (“TCJA”), which limits allowable NOL deductions to 80% of federal taxable income. Effective January 1, 2022, a provision of the TCJA has taken effect creating a significant change to the treatment of research and experimental expenditures under Section 174 of the IRC (“Sec. 174 expenses”). Historically, businesses have had the option of deducting Sec. 174 expenses in the year incurred or capitalizing and amortizing the costs over five years. The new TCJA provision, however, eliminates this option and will require Sec. 174 expenses associated with research conducted in the U.S. to be capitalized and amortized over a five-year period. For expenses associated with research outside of the U.S., Sec. 174 expenses will be capitalized and amortized over a 15-year period. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters On November 12, 2021, Sothinathan Sinnathurai filed a purported securities class action in the U.S. District Court for the District of Maryland (the “Maryland Court”) against the Company and certain members of senior management, captioned Sothinathan Sinnathurai v. Novavax, Inc., et al., No. 8:21-cv-02910-TDC (the “Sinnathurai Action”). On January 26, 2022, the Maryland Court entered an order designating David Truong, Nuggehalli Balmukund Nandkumar, and Jeffrey Gabbert as co-lead plaintiffs in the Sinnathurai Action. The co-lead plaintiffs filed a consolidated amended complaint on March 11, 2022, alleging that the defendants made certain purportedly false and misleading statements concerning the Company’s ability to manufacture NVX-CoV2373 on a commercial scale and to secure the NVX-CoV2373’s regulatory approval. The amended complaint defines the purported class as those stockholders who purchased the Company’s securities between February 24, 2021 and October 19, 2021. On April 25, 2022, defendants filed a motion to dismiss the consolidated amended complaint. On December 12, 2022, the Maryland Court issued a ruling granting in part and denying in part defendants’ motion to dismiss. The Maryland Court dismissed all claims against two individual defendants and claims based on certain public statements challenged in the consolidated amended complaint. The Maryland Court denied the motion to dismiss as to the remaining claims and defendants, and directed the Company and other remaining defendants to answer within fourteen days. On December 27, 2022, the Company filed its answer and affirmative defenses. After the Sinnathurai Action was filed, seven derivative lawsuits were filed: (i) Robert E. Meyer v. Stanley C. Erck, et al., No. 8:21-cv-02996-TDC (the “Meyer Action”), (ii) Shui Shing Yung v. Stanley C. Erck, et al., No. 8:21-cv-03248-TDC (the “Yung Action”), (iii) William Kirst, et al. v. Stanley C. Erck, et al., No. 8:22-cv-00024-TDC (the “Kirst Action”), (iv) Amy Snyder v. Stanley C. Erck, et al., No. 8:22-cv-01415-TDC (the “Snyder Action”), (v) Charles R. Blackburn, et al. v. Stanley C. Erck, et al., No. 1:22-cv-01417-TDC (the “Blackburn Action”), (vi) Diego J. Mesa v. Stanley C. Erck, et al. (the “Mesa Action”), and (vii) Sean Acosta v. Stanley C. Erck, et al. (the “Acosta Action”). The Meyer, Yung, Snyder, and Blackburn Actions were filed in the Maryland Court. The Kirst Action was filed in the Circuit Court for Montgomery County, Maryland, and shortly thereafter removed to the Maryland Court by the defendants. The Mesa and Acosta Actions were filed in the Delaware Court of Chancery (the “Delaware Court”). The derivative lawsuits name members of the Company’s board of directors and certain members of senior management as defendants. The Company is deemed a nominal defendant. The plaintiffs assert derivative claims arising out of substantially the same alleged facts and circumstances as the Sinnathurai Action. Collectively, the derivative complaints assert claims for breach of fiduciary duty, insider selling, unjust enrichment, violation of federal securities law, abuse of control, waste, and mismanagement. Plaintiffs seek declaratory and injunctive relief, as well as an award of monetary damages and attorneys’ fees. On February 7, 2022, the Maryland Court entered an order consolidating the Meyer and Yung Actions (the “First Consolidated Derivative Action”). The plaintiffs in the First Consolidated Derivative Action filed their consolidated derivative complaint on April 25, 2022. On May 10, 2022, the Maryland Court entered an order granting the parties’ request to stay all proceedings and deadlines pending the earlier of dismissal or the filing of an answer in the Sinnathurai Action. On June 10, 2022, the Snyder and Blackburn Actions were filed. On October 5, 2022, the Maryland Court entered an order granting a request by the plaintiffs in the First Consolidated Derivative Action and the Snyder and Blackburn Actions to consolidate all three actions and appoint co-lead plaintiffs and co-lead and liaison counsel (the “Second Consolidated Derivative Action”). The co-lead plaintiffs in the Second Consolidated Derivative Action filed a consolidated amended complaint on November 21, 2022. On February 10, 2023, defendants filed a motion to dismiss the Second Consolidated Derivative Action. Plaintiffs’ filed their opposition to the motion to dismiss on April 11, 2023. Defendant’s reply brief in further support of their motion to dismiss is due by May 11, 2023. On July 21, 2022, the Maryland Court issued a memorandum opinion and order remanding the Kirst Action to state court. On December 6, 2022, the parties to the Kirst Action filed a stipulated schedule pursuant to which the plaintiffs were expected to file an amended complaint on December 22, 2022, and either (i) the parties would file a stipulated stay of the Kirst Action or (ii) the defendants would file a motion to stay the case by January 23, 2023. The plaintiffs filed an amended complaint on December 30, 2022. On January 23, 2023, defendants filed a motion to stay the Kirst action. On February 22, 2023, the parties in the Kirst Action filed for the Court’s approval of a stipulation staying the Kirst Action pending the resolution of defendants’ motion to dismiss in the Second Consolidated Derivative Action. On March 22, 2023, the Court entered an order staying the Kirst Action pending resolution of the Motion to Dismiss in the Second Consolidated Derivative Action. On August 30, 2022, the Mesa Action was filed. On October 3, 2022, the Delaware Court entered an order granting the parties’ request to stay all proceedings and deadlines in the Mesa Action pending the earlier of dismissal of the Sinnathurai Action or the filing of an answer to the operative complaint in the Sinnathurai Action. On January 9, 2023, the court entered an order granting the parties’ request to set a briefing schedule in connection with a motion to stay that defendants intended to file. Pursuant to the order, defendants filed a motion to stay on January 18, 2023. The plaintiff filed his opposition on February 8, 2023. Defendants filed their reply on February 22, 2023. On February 28, 2023, the court granted Defendants’ motion and stayed the Mesa Action pending the entry of a final, non-appealable judgment in the Second Consolidated Derivative Action. On December 7, 2022, the Acosta Action was filed. On February 6, 2023, defendants accepted service of the complaint and summons in the Acosta action. On March 9, 2023, the court entered an order granting the parties’ request to stay the Acosta Action pending the entry of a final, non-appealable judgment in the Second Consolidated Derivative Action. The financial impact of this claim, as well as the claims discussed above, is not estimable. On February 26, 2021, a Company stockholder named Thomas Golubinski filed a derivative complaint against members of the Company’s board of directors and members of senior management in the Delaware Court, captioned Thomas Golubinski v. Richard H. Douglas, et al., No. 2021-0172-JRS. The Company is deemed a nominal defendant. Golubinski challenged equity awards made in April 2020 and in June 2020 on the ground that they were “spring-loaded,” that is, made at a time when such board members or members of senior management allegedly possessed undisclosed positive material information concerning the Company. The complaint asserted claims for breach of fiduciary duty, waste, and unjust enrichment. The plaintiff sought an award of damages to the Company, an order rescinding both awards or requiring disgorgement, and an award of attorneys’ fees incurred in connection with the litigation. On May 10, 2021, the defendants moved to dismiss the complaint in its entirety. On June 17, 2021, the Company’s stockholders voted FOR ratification of the April 2020 awards and ratification of the June 2020 awards. Details of the ratification proposals are set forth in the Company’s Definitive Proxy Statement filed on May 3, 2021. The results of the vote were disclosed in the Company’s Current Report on Form 8-K filed on June 24, 2021. Thereafter, the plaintiff stipulated that, as a result of the outcome of the June 17, 2021 vote, the plaintiff no longer intends to pursue the lawsuit or any claim arising from the April 2020 and June 2020 awards. On August 23, 2021, the plaintiff filed a motion seeking an award of attorneys’ fees and expenses, to which the defendants filed an opposition. On October 18, 2022, the Delaware Court denied the plaintiff’s fee application in its entirety. Under a prior Delaware Court order, the case was automatically dismissed with prejudice upon denial of the plaintiff’s fee application. On November 14, 2022, Golubinski filed a Notice of Appeal in the Supreme Court of the State of Delaware. The plaintiff / appellant filed his opening appellate brief on December 30, 2022. The Company filed its responsive brief on January 30, 2023 and the appellant filed his reply brief on February 14, 2023. The financial impact of this claim, as well as the claims discussed above, is not estimable. On March 29, 2022, Par submitted a demand for arbitration against the Company with the American Arbitration Association, alleging that the Company breached certain provisions of the Manufacturing and Services Agreement (the “Par MSA”) that the Company entered into with Par in September 2020 to provide fill-finish manufacturing services for NVX-CoV2373. On April 4, 2023, the parties entered into a Settlement Agreement and Release of Claims pursuant to which Novavax agreed to pay $27.0 million to Par, which was fully accrued for as of March 31, 2023. Novavax characterized the payment as a $15.0 million termination fee due under the Par MSA and a $12.0 million settlement payment. Because Par and its parent company, Endo International plc, are parties to Chapter 11 bankruptcy proceedings, the Settlement Agreement and Release of Claims and the payment due thereunder required, and subsequently received, approval from the bankruptcy court. The Company has made the payment required by the Settlement Agreement and Release of Claims, and, subject to the non-occurrence of certain contingencies, the arbitration will be dismissed on or about July 13, 2023. On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA based on Gavi’s failure to procure the purchase of 350 million doses of NVX-CoV2373 from the Company as required by the Gavi APA. As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses. On December 2, 2022, Gavi issued a written notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the Gavi APA. Gavi also contends that, based on its purported termination of the Gavi APA, it is entitled to a refund of the Advance Payment Amount less any amounts that have been credited against the purchase price for binding orders placed by a buyer participating in the COVAX Facility. As of December 31, 2022, the remaining Gavi Advance Payment Amount of $697.4 million, pending resolution of the dispute with Gavi related to a return of the remaining Advance Payment Amount, was reclassified from Deferred revenue to Other current liabilities in the Company’s consolidated balance sheet. On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above. The Company filed its Answer and Counterclaims on March 2, 2023. On April 5, 2023, Gavi filed its Reply to the Company’s Counterclaims. Arbitration is inherently uncertain, and while the Company believes that it is entitled to retain the remaining Advance Payment Amount received from Gavi, it is possible that it will be required to refund all or a portion of the remaining Advance Payment Amount from Gavi. The Company is also involved in various other legal proceedings arising in the normal course of business. Although the outcomes of these other legal proceedings are inherently difficult to predict, the Company do not expect the resolution of these other legal proceedings to have a material adverse effect on its financial position, results of operations, or cash flows. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn December 2020, the Company entered into an APA with the Commonwealth of Australia for the purchase of doses of NVX-CoV2373 (the “Australia APA”). In April 2023, the Company entered into an amendment to the Australia APA that reduced the number of doses to be delivered under the Australia APA with a commensurate increase in the per-dose price, such that the total contract value of the Australia APA was maintained, with doses to be delivered through 2024. In January 2021, the Company entered into an APA with Her Majesty the Queen in Right of Canada as represented by the Minister of Public Works and Government Services for the purchase of doses of NVX-CoV2373 (the “Canada APA”). In April 2023, the Company entered into an amendment to the Canada APA under which it will receive a payment of $100.4 million for the forfeiture of doses originally scheduled for delivery in 2022. In May 2023, the Company announced a global restructuring and cost reduction plan. This plan includes a more focused investment in its NVX-CoV2373 program, reduction to its pipeline spending, the continued rationalization of its manufacturing network, a reduction to the Company’s global workforce, as well as the consolidation of facilities and infrastructure. The planned workforce reduction includes an approximately 25% reduction in the Company’s global workforce, comprised of an approximately 20% reduction in full-time Novavax employees and the remainder comprised of contractors and consultants. The Company expects the full annual impact of the cost savings to be realized in 2024 and approximately half of the annual impact to be realized in 2023 due to timing of implementing the measures, and the applicable laws, regulations, and other factors in the jurisdictions in which the Company operates. The Company expects to record a charge of approximately $10 million to $15 million related to one-time employee severance and benefit costs, the majority of which are expected to be incurred in the second quarter of 2023 and is evaluating the anticipated costs related to the consolidation of facilities and infrastructure. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated financial statements are unaudited but include all adjustments (consisting of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position, operating results, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for the periods presented. Although the Company believes that the disclosures in these unaudited consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The unaudited consolidated financial statements include the accounts of Novavax, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Accumulated other comprehensive loss included a foreign currency translation loss of $3.2 million and $6.4 million at March 31, 2023 and December 31, 2022, respectively. The aggregate foreign currency transaction gains resulting from the conversion of the transaction currency to functional currency were $16.3 million and $2.2 million for the three months ended March 31, 2023 and 2022, respectively, which are reflected in Other income. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Results for this or any interim period are not necessarily indicative of results for any future interim period or for the entire year. The Company operates in one business segment. |
Liquidity and Going Concern | Liquidity and Going Concern The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern within one year after the date that the financial statements are issued. At March 31, 2023, the Company had $636.9 million in cash and cash equivalents and restricted cash. In April 2023, the Company repaid $112.5 million related to the refund due under the Amended and Restated SARS-CoV-2 Vaccine Supply Agreement, dated July 1, 2022, as further amended on September 26, 2022, (the “Amended and Restated UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland, which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020, between the parties, and $27.0 million related to a Settlement Agreement and Release of Claims between the Company and Par Sterile Products, LLC (“Par”), as described in Note 15 below, which was fully accrued as of March 31, 2023. During the three months ended March 31, 2023, the Company incurred a net loss of $293.9 million and had net cash flows used in operating activities of $325.6 million. In accordance with Accounting Standards Codification 205-40, Going Concern , the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that these unaudited consolidated financial statements are issued. While the Company’s current cash flow forecast for the one-year going concern look forward period estimates that there will be sufficient capital available to fund operations, this forecast is subject to significant uncertainty, including as it relates to revenue for the next 12 months, funding from the U.S. government, and a pending matter subject to arbitration proceedings. The Company’s revenue projections depend on its ability to successfully develop, manufacture, distribute, and market an updated monovalent or bivalent formulation of a vaccine candidate for COVID-19 for the Fall 2023 COVID vaccine season, which is inherently uncertain and subject to a number of risks, including regulatory approval and commercial adoption. In February 2023, in connection with the execution of Modification 17 to the USG Agreement (as defined in Note 3), the U.S. government indicated to the Company that the award may not be extended past its current period of performance. If the USG Agreement is not amended, as the Company’s management had previously expected, then the Company may not receive all of the remaining $336.4 million in funding that was previously anticipated pursuant to the USG Agreement. On January 24, 2023, Gavi, the Vaccine Alliance (“Gavi”) filed a demand for arbitration with the International Court of Arbitration regarding an alleged material breach by the Company of the Company’s advance purchase agreement with Gavi (the “Gavi APA”). The outcome of that arbitration is inherently uncertain, and it is possible the Company could be required to refund all or a portion of the remaining advance payments of $697.4 million (see Note 3 and Note 15). Management believes that, given the significance of these uncertainties, substantial doubt exists regarding the Company’s ability to continue as a going concern through one year from the date that these financial statements are issued. In May 2023, the Company announced a global restructuring and cost reduction plan. This plan includes a more focused investment in its NVX-CoV2373 program, reduction to its pipeline spending, the continued rationalization of its manufacturing network, a reduction to the Company’s global workforce, as well as the consolidation of facilities and infrastructure. The planned workforce reduction includes an approximately 25% reduction in the Company’s global workforce, comprised of an approximately 20% reduction in full-time Novavax employees and the remainder comprised of contractors and consultants. The Company expects the full annual impact of the cost savings to be realized in 2024 and approximately half of the annual impact to be realized in 2023 due to timing of implementing the measures, and the applicable laws, regulations, and other factors in the jurisdictions in which the Company operates. The Company expects to record a charge of approximately $10 million to $15 million related to one-time employee severance and benefit costs, the majority of which are expected to be incurred in the second quarter of 2023 and is evaluating the anticipated costs related to the consolidation of facilities and infrastructure. The Company’s ability to fund Company operations is dependent upon revenue related to vaccine sales for its products and product candidates, if such product candidates receive marketing approval and are successfully commercialized; the resolution of certain matters, including whether, when, and how the dispute with Gavi is resolved; and management’s plans, which include resolving the dispute with Gavi and cost reductions associated with the Company’s global restructuring and cost reduction plan. Management’s plans may also include raising additional capital through a combination of equity and debt financing, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements. New financings may not be available to the Company on commercially acceptable terms, or at all. Also, any collaborations, strategic alliances, and marketing, distribution, or licensing arrangements may require the Company to give up some or all of its rights to a product or technology, which in some cases may be at less than the full potential value of such rights. In addition, the regulatory and commercial success of NVX-CoV2373 and the Company’s other vaccine candidates, including an influenza vaccine candidate, a CIC vaccine candidate, and a COVID-19 variant strain-containing monovalent or bivalent formulation, remains uncertain. If the Company is unable to obtain additional capital, the Company will assess its capital resources and may be required to delay, reduce the scope of, or eliminate some or all of its operations, or further downsize its organization, any of which may have a material adverse effect on its business, financial condition, results of operations, and ability to operate as a going concern. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. |
Revenue Recognition Constraints | Revenue Recognition Constraints The Company constrains the transaction price for customer arrangements until it is probable that a significant reversal in cumulative revenue recognized will not occur. Specifically, if a customer arrangement includes a provision whereby the customer may request a discount, return or refund for a previously satisfied performance obligation or otherwise could have the effect of decreasing the transaction price, revenue is constrained based on an estimate of the impact to the transaction price recognized until it is probable that a significant reversal in cumulative revenue recognized will not occur. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), with amendments in 2018, 2019, 2020, and 2022. The ASU sets forth a “current expected credit loss” model that requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. ASU 2016-13 applies to financial instruments that are not measured at fair value, including receivables that result from revenue transactions. The Company adopted ASU 2020-06 on January 1, 2023, using a modified retrospective approach, and it did not have a material impact on the Company’s consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Grants, U.S. Government Contract and Joint Venture [Abstract] | |
Schedule of accounts receivable, unbilled services, and deferred revenue | During the three months ended March 31, 2023 and 2022, changes in the Company's accounts receivables, allowance for doubtful accounts, and deferred revenue balances were as follows (in thousands): Balance, Beginning of Period Additions Deductions Balance, End of Period Accounts receivable: Three months ended March 31, 2023 $ 96,210 $ 146,424 $ (115,950) $ 126,684 Three months ended March 31, 2022 454,993 625,124 (601,961) 478,156 Allowance for doubtful accounts (1) : Three months ended March 31, 2023 $ (13,835) $ — $ — $ (13,835) Three months ended March 31, 2022 — — — — Deferred revenue: Three months ended March 31, 2023 $ 549,551 $ 140,324 $ (49) $ 689,826 Three months ended March 31, 2022 1,595,472 49,094 (108,586) 1,535,980 (1) There was no bad debt expense recorded during the three months ended March 31, 2023 or 2022. To estimate the allowance for doubtful accounts, the Company evaluates the credit risk related to its customers based on historical loss experience, economic conditions, the aging of receivables, and customer-specific risks. |
Schedule of product revenue | Product sales by the Company’s customer’s geographic location was as follows (in thousands): Three Months Ended 2023 2022 North America $ — $ 64,762 Europe 57,267 413,745 Rest of the world (64,724) 107,121 Total product revenue $ (7,457) $ 585,628 |
Earnings (Loss) per Share (Tabl
Earnings (Loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Basic and diluted net income (loss) per share were calculated as follows (in thousands, except per share data): Three Months Ended 2023 2022 Numerator: Net income (loss), basic $ (293,905) $ 203,408 Interest on convertible notes, net — 3,403 Net income (loss), dilutive (293,905) 206,811 Denominator: Weighted average number of common shares outstanding, basic 86,158 76,457 Effect of dilutive securities — 4,254 Weighted average number of common shares outstanding, dilutive 86,158 80,711 Net income (loss) per share: Basic $ (3.41) $ 2.66 Diluted $ (3.41) $ 2.56 Anti-dilutive securities excluded from calculations of diluted net income (loss) per share 23,971 1,474 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of reconciliation of cash, cash equivalents and restricted cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets that sums to the total of such amounts shown in the consolidated statements of cash flows (in thousands): March 31, 2023 December 31, 2022 Cash and cash equivalents $ 624,950 $ 1,336,883 Restricted cash, current 10,330 10,303 Restricted cash, non-current (1) 1,663 1,659 Cash, cash equivalents, and restricted cash $ 636,943 $ 1,348,845 (1) Classified as Other non-current assets as of March 31, 2023 and December 31, 2022, on the consolidated balance sheets. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value hierarchy | The following table represents the Company’s fair value hierarchy for its financial assets and liabilities (in thousands): Fair Value at March 31, 2023 Fair Value at December 31, 2022 Assets Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Money market funds (1) $ 152,786 $ — $ — $ 398,834 $ — $ — Government-backed securities (1) — 296,000 — — 296,000 — Corporate debt securities (1) — 4,991 — — — — Agency securities (1) — — — — 104,536 — Total cash equivalents $ 152,786 $ 300,991 $ — $ 398,834 $ 400,536 $ — Liabilities 5.00% Convertible notes due 2027 $ — $ 103,811 $ — $ — $ 172,789 $ — 3.75% Convertible notes due 2023 — — — — 322,111 — Total convertible notes payable $ — $ 103,811 $ — $ — $ 494,900 $ — |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory consisted of the following (in thousands): March 31, 2023 December 31, 2022 Raw materials $ 12,320 $ 13,912 Semi-finished goods 13,108 21,410 Finished goods 8,757 1,361 Total inventory $ 34,185 $ 36,683 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The change in the carrying amounts of goodwill for the three months ended March 31, 2023 was as follows (in thousands): Amount Balance at December 31, 2022 $ 126,331 Currency translation adjustments 3,496 Balance at March 31, 2023 $ 129,827 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes payable | Total convertible notes payable consisted of the following (in thousands): March 31, 2023 December 31, 2022 Current portion: 3.75% Convertible notes due 2023 $ — $ 325,000 Unamortized debt issuance costs — (119) Total current convertible notes payable $ — $ 324,881 Non-current portion: 5.00% Convertible notes due 2027 $ 175,250 $ 175,250 Unamortized debt issuance costs and discount (8,393) (8,784) Total non-current convertible notes payable $ 166,857 $ 166,466 |
Schedule of interest expense | The interest expense incurred in connection with the Notes consisted of the following (in thousands): Three Months Ended 2023 2022 Coupon interest $ 3,206 $ 3,047 Amortization of debt issuance costs 510 356 Total interest expense on convertible notes payable $ 3,716 $ 3,403 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | The Company recorded stock-based compensation expense in the consolidated statements of operations as follows (in thousands): Three Months Ended 2023 2022 Cost of sales $ 519 $ — Research and development 13,858 16,887 Selling, general, and administrative 14,270 16,046 Total stock-based compensation expense $ 28,647 $ 32,933 |
Schedule of option and appreciation rights activity | The following is a summary of stock options and SARs activity under the 2023 Inducement Plan, 2015 Plan, and 2005 Plan for the three months ended March 31, 2023: 2023 Inducement Plan 2015 Plan 2005 Plan Stock Weighted-Average Stock Weighted-Average Stock Weighted-Average Outstanding at December 31, 2022 — $ — 4,053,290 $ 46.07 63,725 $ 112.94 Granted 358,600 10.96 927,742 7.20 — — Exercised — — (5,031) 6.81 — — Canceled — — (15,835) 81.44 (5,250) 36.60 Outstanding at March 31, 2023 358,600 $ 10.96 4,960,166 $ 38.73 58,475 $ 119.80 Shares exercisable at March 31, 2023 — $ — 311,560 $ 40.60 58,475 $ 119.80 |
Schedule of assumptions used in estimation of fair value of stock | The fair value of stock options granted under the 2023 Inducement Plan and the 2015 Plan was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: Three Months Ended 2023 2022 Weighted average Black-Scholes fair value of stock options granted $7.19 $65.78 Risk-free interest rate 3.6%-4.0% 1.4%-2.0% Dividend yield —% —% Volatility 127.7%-140.3% 120.5%-130.6% Expected term (in years) 3.9-5.1 4.1-5.3 |
Schedule of share based compensation restricted stock awards activity | The following is a summary of RSU activity for the three months ended March 31, 2023: 2023 Inducement Plan 2015 Plan Number of Per Share Number of Per Share Outstanding and unvested at December 31, 2022 — $ — 2,034,574 $ 61.67 Granted 308,390 $ 10.96 2,531,445 7.20 Vested — $ — (211,688) 87.25 Forfeited — $ — (88,570) 52.68 Outstanding and unvested at March 31, 2023 308,390 $ 10.96 4,265,761 $ 28.26 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |||||
Apr. 01, 2023 USD ($) | May 31, 2023 USD ($) | Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | Apr. 04, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||||
Foreign currency translation adjustment | $ (3,200) | $ (6,400) | |||||
Foreign currency transaction gain | $ 16,300 | $ 2,200 | |||||
Number of business segments | segment | 1 | ||||||
Cash, cash equivalents, and restricted cash | $ 636,943 | 1,584,100 | 1,348,845 | $ 1,528,259 | |||
Net loss | (293,905) | 203,408 | |||||
Net cash provided by (used in) operating activities | (325,593) | $ (88,510) | |||||
Minimum | One-Time Employee Severance And Benefit Costs | Forecast | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Restructuring and related cost, expected cost | $ 10,000 | ||||||
Maximum | One-Time Employee Severance And Benefit Costs | Forecast | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Restructuring and related cost, expected cost | $ 15,000 | ||||||
Subsequent Events | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Loss contingency, settlement agreement and release of claims to agreed payment | $ 27,000 | ||||||
Global workforce percent | 25% | ||||||
Restructuring and related cost percent | 20% | ||||||
Gavi Advance Purchase Agreement- COVAX Facility | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Collaboration agreement upfront payment amount | 697,400 | $ 697,400 | |||||
US Government Agreement | Government Contract | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Research and development arrangement, contract to perform for others, contract remaining | $ 336,400 | ||||||
Unsecured Debt | Subsequent Events | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Repayments of debt | $ 112,500 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) dose in Millions | 3 Months Ended | ||||
Mar. 31, 2023 USD ($) dose | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Nov. 18, 2022 dose | Dec. 31, 2021 USD ($) | |
Revenue Recognition | |||||
Billed contracts receivable | $ 70,200,000 | $ 425,900,000 | $ 53,800,000 | $ 419,700,000 | |
Unbilled contracts receivable | 42,700,000 | 52,300,000 | 28,600,000 | 35,300,000 | |
Deferred revenue | 689,826,000 | 1,535,980,000 | 549,551,000 | 1,595,472,000 | |
Reduction in product sales | 64,700,000 | ||||
Revenues | 80,951,000 | 703,971,000 | |||
US Government Partnership | |||||
Revenue Recognition | |||||
Contingent upon meeting certain milestones amount | 60,000,000 | ||||
Grant consideration, amount development and regulatory milestones | 1,500,000 | ||||
Grant consideration, amount subject to third parties | 48,000,000 | ||||
Grant revenue reduction | $ 29,000,000 | ||||
Gavi Advance Purchase Agreement SIIPL | |||||
Revenue Recognition | |||||
Deferred revenue | $ 350,000,000 | ||||
Number of doses to be distributed | dose | 1,100 | ||||
Remaining performance obligation, variable consideration amount | 350,000,000 | ||||
Gavi Advance Purchase Agreement- COVAX Facility | |||||
Revenue Recognition | |||||
Number of doses to be distributed | dose | 350 | ||||
Collaboration agreement upfront payment amount | $ 697,400,000 | $ 697,400,000 | |||
Purchase agreement, number of vaccine doses | dose | 2 | ||||
Sales-Based Royalties | |||||
Revenue Recognition | |||||
Revenues | 0 | $ 7,400,000 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |||||
Revenue Recognition | |||||
Amount of transaction price not yet satisfied | $ 3,000,000,000 | ||||
Remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue - Accounts Receivable,
Revenue - Accounts Receivable, Unbilled Services, and Deferred Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accounts receivable | ||
Accounts receivable, beginning balance | $ 96,210,000 | $ 454,993,000 |
Additions | 146,424,000 | 625,124,000 |
Deductions | (115,950,000) | (601,961,000) |
Accounts receivable, ending balance | 126,684,000 | 478,156,000 |
Allowance for doubtful accounts | ||
Allowance for doubtful accounts, beginning balance | (13,835,000) | 0 |
Additions | 0 | 0 |
Deductions | 0 | 0 |
Allowance for doubtful accounts, end balance | (13,835,000) | 0 |
Deferred revenue | ||
Deferred revenue, beginning balance | 549,551,000 | 1,595,472,000 |
Additions | 140,324,000 | 49,094,000 |
Deductions | (49,000) | (108,586,000) |
Deferred revenue, ending balance | $ 689,826,000 | $ 1,535,980,000 |
Revenue - Schedule of Product R
Revenue - Schedule of Product Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue Recognition | ||
Revenues | $ 80,951 | $ 703,971 |
Product | ||
Revenue Recognition | ||
Revenues | (7,457) | 585,628 |
Product | North America | ||
Revenue Recognition | ||
Revenues | 0 | 64,762 |
Product | Europe | ||
Revenue Recognition | ||
Revenues | 57,267 | 413,745 |
Product | Rest of the world | ||
Revenue Recognition | ||
Revenues | $ (64,724) | $ 107,121 |
Collaboration, License, and S_2
Collaboration, License, and Supply Agreements (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 USD ($) installment | Sep. 30, 2022 USD ($) installment | Sep. 30, 2021 dose | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Royalty period | 15 years | ||
Settlement Agreement | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Settlement payment | $ 185 | ||
Initial reservation fee | $ 47.8 | ||
Number of quarterly installment payments | installment | 2 | 4 | |
Settlement agreement, quarterly installment amount | $ 34.3 | ||
Settlement Agreement | Accrued Liabilities | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Settlement payment | $ 102.9 | ||
Takeda Arrangement | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Number of doses to be distributed | dose | 150,000,000 |
Earnings (Loss) per Share (Deta
Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income (loss), basic | $ (293,905) | $ 203,408 |
Interest on convertible notes, net | 0 | 3,403 |
Net income (loss), dilutive | $ (293,905) | $ 206,811 |
Denominator: | ||
Weighted average number of common shares outstanding, basic (in shares) | 86,158 | 76,457 |
Effect of dilutive securities (in shares) | 0 | 4,254 |
Weighted average number of common shares outstanding, dilutive (in shares) | 86,158 | 80,711 |
Net income (loss) per share: | ||
Basic (in usd per share) | $ (3.41) | $ 2.66 |
Diluted (in usd per share) | $ (3.41) | $ 2.56 |
Anti-dilutive securities excluded from calculations of diluted net income (loss) per share (in shares) | 23,971 | 1,474 |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 624,950 | $ 1,336,883 | ||
Restricted cash, current | 10,330 | 10,303 | ||
Restricted cash, non-current | 1,663 | 1,659 | ||
Cash, cash equivalents, and restricted cash | $ 636,943 | $ 1,348,845 | $ 1,584,100 | $ 1,528,259 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
5.00% Convertible notes due 2027 | ||
Liabilities | ||
Coupon interest rate | 5% | |
Level 1 | ||
Assets | ||
Total cash equivalents | $ 152,786 | $ 398,834 |
Liabilities | ||
Total convertible notes payable | 0 | 0 |
Level 1 | 5.00% Convertible notes due 2027 | ||
Liabilities | ||
Total convertible notes payable | 0 | 0 |
Level 1 | 3.75% Convertible notes due 2023 | ||
Liabilities | ||
Total convertible notes payable | 0 | 0 |
Level 1 | Money market funds | ||
Assets | ||
Total cash equivalents | 152,786 | 398,834 |
Level 1 | Government-backed securities | ||
Assets | ||
Total cash equivalents | 0 | 0 |
Level 1 | Corporate debt securities | ||
Assets | ||
Total cash equivalents | 0 | 0 |
Level 1 | Agency securities | ||
Assets | ||
Total cash equivalents | 0 | 0 |
Level 2 | ||
Assets | ||
Total cash equivalents | 300,991 | 400,536 |
Liabilities | ||
Total convertible notes payable | 103,811 | 494,900 |
Level 2 | 5.00% Convertible notes due 2027 | ||
Liabilities | ||
Total convertible notes payable | 103,811 | 172,789 |
Level 2 | 3.75% Convertible notes due 2023 | ||
Liabilities | ||
Total convertible notes payable | 0 | 322,111 |
Level 2 | Money market funds | ||
Assets | ||
Total cash equivalents | 0 | 0 |
Level 2 | Government-backed securities | ||
Assets | ||
Total cash equivalents | 296,000 | 296,000 |
Level 2 | Corporate debt securities | ||
Assets | ||
Total cash equivalents | 4,991 | 0 |
Level 2 | Agency securities | ||
Assets | ||
Total cash equivalents | 0 | 104,536 |
Level 3 | ||
Assets | ||
Total cash equivalents | 0 | 0 |
Liabilities | ||
Total convertible notes payable | 0 | 0 |
Level 3 | 5.00% Convertible notes due 2027 | ||
Liabilities | ||
Total convertible notes payable | 0 | 0 |
Level 3 | 3.75% Convertible notes due 2023 | ||
Liabilities | ||
Total convertible notes payable | 0 | 0 |
Level 3 | Money market funds | ||
Assets | ||
Total cash equivalents | 0 | 0 |
Level 3 | Government-backed securities | ||
Assets | ||
Total cash equivalents | 0 | 0 |
Level 3 | Corporate debt securities | ||
Assets | ||
Total cash equivalents | 0 | 0 |
Level 3 | Agency securities | ||
Assets | ||
Total cash equivalents | $ 0 | $ 0 |
Inventory (Details)
Inventory (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 12,320,000 | $ 13,912,000 | |
Semi-finished goods | 13,108,000 | 21,410,000 | |
Finished goods | 8,757,000 | 1,361,000 | |
Total inventory | 34,185,000 | $ 36,683,000 | |
Provision for excess and obsolete inventory | 12,500,000 | $ 0 | |
Firm purchase commitment loss | $ 7,700,000 | $ 0 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 USD ($) reporting_unit | Dec. 31, 2022 USD ($) reporting_unit | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Number of reporting unit | reporting_unit | 1 | 1 |
Goodwill [Roll Forward] | ||
Beginning balance | $ 126,331 | |
Currency translation adjustments | 3,496 | |
Ending balance | $ 129,827 | $ 126,331 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Short-term lease expense | $ 0.7 | $ 78.1 |
Lease expense | 10.4 | |
Interest expense | $ 0.5 | $ 1.1 |
Long-Term Debt - Notes Payable
Long-Term Debt - Notes Payable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ 0 | $ (119) |
Convertible notes payable | 0 | 324,881 |
Unamortized debt issuance costs and discount | (8,393) | (8,784) |
Total non-current convertible notes payable | $ 166,857 | 166,466 |
3.75% Convertible notes due 2023 | ||
Debt Instrument [Line Items] | ||
Coupon interest rate | 3.75% | |
3.75% Convertible notes due 2023 | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount, current | $ 0 | 325,000 |
Repayments of debt | $ 325,000 | |
5.00% Convertible notes due 2027 | ||
Debt Instrument [Line Items] | ||
Coupon interest rate | 5% | |
5.00% Convertible notes due 2027 | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount of notes issued | $ 175,250 | $ 175,250 |
Long-Term Debt - Interest Expen
Long-Term Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Coupon interest | $ 3,206 | $ 3,047 |
Amortization of debt issuance costs | 510 | 356 |
Total interest expense on convertible notes payable | $ 3,716 | $ 3,403 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jun. 30, 2021 | Mar. 31, 2022 | Mar. 31, 2023 | |
Stockholders' Equity | |||
Proceeds from shares sold, net | $ 179,385 | ||
Remaining unissued capital | $ 318,000 | ||
Common Stock | |||
Stockholders' Equity | |||
Proceeds from shares sold, net | $ 500,000 | $ 22 | |
Issued (in shares) | 2,197,398 | ||
Additional Paid-in Capital | |||
Stockholders' Equity | |||
Proceeds from shares sold, net | $ 179,363 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) shares in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jan. 31, 2023 | Jun. 30, 2013 | |
Stock-Based Compensation | ||||||
Stock-based compensation capitalized | $ 1.7 | $ 1.7 | ||||
Unrecognized compensation expense | $ 174 | |||||
Unrecognized compensation expense, recognition period | 1 year | |||||
Aggregate intrinsic value, stock options and vesting RSA's | $ 1.5 | $ 5.6 | ||||
Aggregate intrinsic value, outstanding | $ 0.9 | |||||
Remaining term, outstanding (in years) | 7 years 6 months | |||||
Aggregate intrinsic value, exercisable | $ 0.7 | |||||
Remaining term, exercisable (in years) | 6 years 6 months | |||||
ESPP | ||||||
Stock-Based Compensation | ||||||
Shares available for grant (in shares) | 500 | |||||
Authorized (in shares) | 1,650 | 1,100 | ||||
Percentage increase of shares each anniversary | 5% | |||||
Subscription rate cap | 15% | |||||
Maximum discount rate | 85% | |||||
2023 Inducement Plan | ||||||
Stock-Based Compensation | ||||||
Shares available for grant (in shares) | 1,000 | |||||
Number of shares available for issuance (in shares) | 300 | |||||
2015 Plan | ||||||
Stock-Based Compensation | ||||||
Number of shares available for issuance (in shares) | 500 | |||||
Authorized (in shares) | 14,800 | |||||
Term (in years) | 10 years | |||||
Minimum grant price, percent of common stock fair value | 100% | |||||
2015 Plan | Minimum | ||||||
Stock-Based Compensation | ||||||
Vesting period | 1 year | |||||
2015 Plan | Maximum | ||||||
Stock-Based Compensation | ||||||
Vesting period | 4 years |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Compensation expense: | ||
Total stock-based compensation expense | $ 28,647 | $ 32,933 |
Cost of sales | ||
Compensation expense: | ||
Total stock-based compensation expense | 519 | 0 |
Research and development | ||
Compensation expense: | ||
Total stock-based compensation expense | 13,858 | 16,887 |
Selling, general, and administrative | ||
Compensation expense: | ||
Total stock-based compensation expense | $ 14,270 | $ 16,046 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options and Appreciation Rights (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
2023 Inducement Plan | |
Stock Options | |
Outstanding, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 358,600 |
Exercised (in shares) | shares | 0 |
Canceled (in shares) | shares | 0 |
Outstanding, ending balance (in shares) | shares | 358,600 |
Shares exercisable (in shares) | shares | 0 |
Weighted-Average Exercise Price | |
Outstanding, beginning balance (in usd per share) | $ / shares | $ 0 |
Granted (in usd per share) | $ / shares | 10.96 |
Exercised (in usd per share) | $ / shares | 0 |
Canceled (in usd per share) | $ / shares | 0 |
Outstanding, ending balance (in usd per share) | $ / shares | 10.96 |
Shares exercisable (in usd per share) | $ / shares | $ 0 |
2015 Plan | |
Stock Options | |
Outstanding, beginning balance (in shares) | shares | 4,053,290 |
Granted (in shares) | shares | 927,742 |
Exercised (in shares) | shares | (5,031) |
Canceled (in shares) | shares | (15,835) |
Outstanding, ending balance (in shares) | shares | 4,960,166 |
Shares exercisable (in shares) | shares | 311,560 |
Weighted-Average Exercise Price | |
Outstanding, beginning balance (in usd per share) | $ / shares | $ 46.07 |
Granted (in usd per share) | $ / shares | 7.20 |
Exercised (in usd per share) | $ / shares | 6.81 |
Canceled (in usd per share) | $ / shares | 81.44 |
Outstanding, ending balance (in usd per share) | $ / shares | 38.73 |
Shares exercisable (in usd per share) | $ / shares | $ 40.60 |
2005 Plan | |
Stock Options | |
Outstanding, beginning balance (in shares) | shares | 63,725 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | 0 |
Canceled (in shares) | shares | (5,250) |
Outstanding, ending balance (in shares) | shares | 58,475 |
Shares exercisable (in shares) | shares | 58,475 |
Weighted-Average Exercise Price | |
Outstanding, beginning balance (in usd per share) | $ / shares | $ 112.94 |
Granted (in usd per share) | $ / shares | 0 |
Exercised (in usd per share) | $ / shares | 0 |
Canceled (in usd per share) | $ / shares | 36.60 |
Outstanding, ending balance (in usd per share) | $ / shares | 119.80 |
Shares exercisable (in usd per share) | $ / shares | $ 119.80 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options and Appreciation Rights, Assumptions (Details) - Stock options - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Fair Value | ||
Weighted average Black-Scholes fair value of stop options and SARs granted (in usd per share) | $ 7.19 | $ 65.78 |
Risk-free interest rate, minimum | 3.60% | 1.40% |
Risk-free interest rate, maximum | 4% | 2% |
Dividend yield | 0% | 0% |
Volatility, minimum | 127.70% | 120.50% |
Volatility, maximum | 140.30% | 130.60% |
Minimum | ||
Fair Value | ||
Expected term (in years) | 3 years 10 months 24 days | 4 years 1 month 6 days |
Maximum | ||
Fair Value | ||
Expected term (in years) | 5 years 1 month 6 days | 5 years 3 months 18 days |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - Restricted stock units | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
2023 Inducement Plan | |
Number of Shares | |
Outstanding and Unvested, beginning balance (in shares) | shares | 0 |
Restricted stock units granted (in shares) | shares | 308,390 |
Restricted stock units vested (in shares) | shares | 0 |
Restricted stock units forfeited (in shares) | shares | 0 |
Outstanding and Unvested, ending balance (in shares) | shares | 308,390 |
Per Share Weighted- Average Fair Value | |
Outstanding and Unvested, beginning balance (in usd per share) | $ / shares | $ 0 |
Restricted stock units granted (in usd per share) | $ / shares | 10.96 |
Restricted stock units vested (in usd per share) | $ / shares | 0 |
Restricted stock units forfeited (in usd per share) | $ / shares | 0 |
Outstanding and Unvested, ending balance (in usd per share) | $ / shares | $ 10.96 |
2015 Plan | |
Number of Shares | |
Outstanding and Unvested, beginning balance (in shares) | shares | 2,034,574 |
Restricted stock units granted (in shares) | shares | 2,531,445 |
Restricted stock units vested (in shares) | shares | (211,688) |
Restricted stock units forfeited (in shares) | shares | (88,570) |
Outstanding and Unvested, ending balance (in shares) | shares | 4,265,761 |
Per Share Weighted- Average Fair Value | |
Outstanding and Unvested, beginning balance (in usd per share) | $ / shares | $ 61.67 |
Restricted stock units granted (in usd per share) | $ / shares | 7.20 |
Restricted stock units vested (in usd per share) | $ / shares | 87.25 |
Restricted stock units forfeited (in usd per share) | $ / shares | 52.68 |
Outstanding and Unvested, ending balance (in usd per share) | $ / shares | $ 28.26 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Jan. 01, 2022 | |
Income Tax Disclosure [Abstract] | |||
Capitalized amortization period | 15 years | ||
Federal, state and local, tax expense (benefit) | $ 1,200,000 | $ 600,000 | |
Foreign income tax expense (benefit) | $ 0 | $ 2,100,000 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) dose in Millions, $ in Millions | Dec. 28, 2022 lawsuit | Dec. 12, 2022 defendant | Apr. 04, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Nov. 18, 2022 dose |
Loss Contingencies [Line Items] | ||||||
Number of defendants | defendant | 2 | |||||
Period to answer | 14 days | |||||
Number of lawsuits filed | lawsuit | 7 | |||||
Subsequent Events | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency, settlement agreement and release of claims to agreed payment | $ 27 | |||||
Loss contingency, termination fee | 15 | |||||
Loss contingency, settlement payment | $ 12 | |||||
Gavi Advance Purchase Agreement- COVAX Facility | ||||||
Loss Contingencies [Line Items] | ||||||
Number of doses to be distributed | dose | 350 | |||||
Purchase agreement, number of vaccine doses | dose | 2 | |||||
Collaboration agreement upfront payment amount | $ 697.4 | $ 697.4 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | |
May 31, 2023 | Apr. 30, 2023 | |
Minimum | One-Time Employee Severance And Benefit Costs | Forecast | ||
Subsequent events | ||
Restructuring and related cost, expected cost | $ 10 | |
Maximum | One-Time Employee Severance And Benefit Costs | Forecast | ||
Subsequent events | ||
Restructuring and related cost, expected cost | $ 15 | |
Subsequent Events | ||
Subsequent events | ||
Global workforce percent | 25% | |
Restructuring and related cost percent | 20% | |
Subsequent Events | Canada APA | ||
Subsequent events | ||
Collaboration agreement upfront payment amount | $ 100.4 |