ROCKVILLE, Md., March 14 /PRNewswire-FirstCall/ -- Novavax Inc.
(Nasdaq: NVAX) today announced financial results for the fourth quarter and
year ended December 31, 2007. Novavax reported a net loss of $9.2 million
($0.15 loss per share) for the fourth quarter of 2007 compared to a net
loss of $6.1 million ($0.10 loss per share) in the fourth quarter of 2006.
For the year ended December 31, 2007, the Company reported a net loss of
$34.8 million ($0.57 loss per share) compared to a net loss of $23.1
million ($0.39 loss per share) for the year ended December 31, 2006.
Novavax ended 2007 with $46.5 million in cash and investments compared to
$73.6 million as of December 31, 2006. The total cash burn rate for the
fourth quarter of 2007 was $6.8 million.
Among key achievements since January 1, 2007, Novavax has:
-- Advanced its H5N1 pandemic influenza vaccine to Phase I/IIa clinical
studies in humans. An interim analysis in December 2007 was positive,
indicating that this vaccine demonstrated immunogenicity at 15 mcg. and
45 mcg. dose levels and that the vaccine is well tolerated from a
safety perspective. Beginning March 2008, additional patients will be
enrolled in a dose-ranging study to determine the optimal dose.
Novavax expects that preliminary immunogenicity results from this study
should be available by early in the third quarter of 2008.
-- Advanced its seasonal influenza program into pre-clinical studies with
a target of commencing human trials in Phase I/IIa in late second
quarter or early third quarter of 2008. The initial results from our
pandemic influenza study bode well for our seasonal program, because
Stockholders' equity 63,065 94,001immunogenicity of the avian H5N1 antigens is not as robust as seasonal
flu due to the fact that the H5N1 is not a human virus.
-- Announced two additional new vaccine programs, one for Varicella Zoster
(Shingles) and a second for an undisclosed disease target.
-- Continued to develop and advance its manufacturing process as well as
analytical tools to ensure that the Company's vaccines are reproducible
and of consistent high quality to meet rigorous FDA standards.
-- Commenced work on leasehold improvements to create a GMP pilot plant in
the Company's Rockville, Maryland headquarters that is expected to be
commissioned in the second quarter of 2008. This facility will
showcase the capability of our disposable production technology in a
relatively low cost environment.
-- Signed an agreement in October 2007 with GE Healthcare to co-market a
pandemic influenza vaccine solution to select international countries.
This collaboration is a unique commercial opportunity leveraging
Novavax's VLP technology with GE Healthcare's disposable bioprocess
technology and equipment.
-- Signed licensing agreements with Wyeth Holdings and University of
Massachusetts for core technology for our further development of VLPs.
Novavax has also continued to solidify its VLP technology in 2007 by
filing additional patents applications.
-- Sold assets related to Estrasorb(R) in the United States, Canada and
Mexico to Graceway Pharmaceuticals, LLC in February 2008. As part of
that sale, Novavax entered into a supply agreement with Graceway which
requires the Company to manufacture additional units of Estrasorb, with
final delivery expected in mid 2008. Graceway also granted Novavax an
exclusive, non-transferable, royalty-free limited license to the
patents and know-how that Novavax sold to Graceway in certain limited
"We made significant progress in 2007 and have an ambitious agenda for 2008," said Novavax Chief Executive Officer Dr. Rahul Singhvi. "By the second half of 2008, we expect to have two vaccines in Phase II clinical trials with two additional vaccine candidates in early preclinical development, a rapid advancement of our vaccine pipeline."
2007 Financial Results
Revenue from continuing operations, for the fourth quarter ended December 31, 2007 was $0.4 million compared to $0.5 million for the same period in 2006, a net decrease of $0.1 million due to lower Gynodiol sales in 2007 due to the discontinued sale of the product in mid 2007, partially offset by higher contract research revenues due to achievement of certain milestones. Revenue for the full year of 2007 was $1.5 million as compared to $1.7 million in 2006. The reduction of $0.2 million in revenue was due to lower Gynodiol sales due to discontinuing the sale of the product in mid 2007, partially offset by higher contract research revenues.
There were no costs of products sold in the fourth quarter of 2007 due to the classification of Estrasorb manufacturing into discontinued operations, as well as no Gynodiol sales in the fourth quarter of 2007 vs. 2006 cost of products of $50,000.
Research and development costs for the fourth quarter of 2007 were $4.2 million compared to $3.1 million in the fourth quarter of 2006. For the full year, research and development costs increased 55.4 percent to $17.6 million in 2007 from $11.3 million in 2006. The increases in both the fourth quarter and full year of 2007 as compared to 2006 were due to higher research and development spending to support the Company's advancement of its pandemic influenza vaccine into human trials, as well as pre-clinical studies for our seasonal influenza program conducted in 2007. These increases were primarily for increased personnel, facility costs and outside expenses (including sponsored research, clinical research organization costs and consulting agreements) associated with expanded preclinical studies, human trial study costs, testing and process development, manufacturing and quality-assurance and quality-control related activities.
General and administrative costs were $2.9 million in the fourth quarter of 2007 as compared to $3.3 million in the prior year. General and administrative costs for the full year of 2007 were $14.0 million compared to $11.3 million in 2006. General and administrative costs for the 2007 fourth quarter, as compared to the same period of 2006, decreased by $0.4 million due to lower consulting and legal expenses. Full-year 2007 general and administrative expenses increased by $2.7 million due to increased lease expenses of our new corporate headquarters in Rockville, Maryland, additional reserves for notes receivables from former board of directors, additional fees related to the implementation of FIN 48 and additional personnel costs.
As a result, total losses from continuing operations before interest was $6.7 million and $30.3 million for the fourth quarter and full year of 2007, respectively.
Interest income, net of interest expense was $0.3 million in the fourth quarter of 2007 and $1.7 million for the full year as compared to $0.7 million in the fourth quarter of 2006 and $1.5 million for the full year of 2006. The decrease in interest income, net of interest expense in the fourth quarter 2007 versus the prior year, was principally due to lower average cash and short term investment balances in 2007. The relatively small change for the full year of $0.1 million in 2007 versus 2006 was due to the conversion of $7.0 million of long term debt into equity in 2006, thereby lowering interest expense, partially offset by lower interest income due to lower cash and short term investment balances in 2007 as compared to 2006.
Accordingly, the loss from continuing operations was $6.4 million and $28.6 million for the fourth quarter and full year of 2007, respectively.
Losses from discontinued operations are a result of the Company's decision to discontinue manufacturing of Estrasorb as of December 31, 2007. In February 2008, the Company entered into an asset purchase agreement with Graceway, LLC providing for the sale of certain assets related to Estrasorb. Novavax also entered into a supply agreement with Graceway which requires the Company to manufacture additional units of Estrasorb in the United States, Canada and Mexico. The additional manufacturing of Estrasorb is anticipated to be completed by mid-2008, and all associated income and expenses for this activity will also be classified as discontinued operations. Loss for discontinued operations was $2.8 million in the fourth quarter of 2007 as compared to a loss of $0.8 million in the fourth quarter of prior year. The increased loss of $2.0 million was principally due to the write off of certain manufacturing assets to the net realizable value of such assets that were not part of asset sale to Graceway. Losses for discontinued operations for the full year 2007 were $6.2 million as compared to losses of $3.5 million in 2006, an increase of $2.7 million. The increase in losses was principally due to the aforementioned write off of certain manufacturing assets (in the fourth quarter of 2007) as well as lower production of Estrasorb in 2007 compared to 2006 due to lower requirements for the product by Allergan, Inc., successor of interest to Esprit Pharma, which held the rights to Estrasorb in North America prior to the Graceway transaction.
The total net loss when combining the loss from continuing and discontinued operations was $9.2 million and $34.8 million for the fourth quarter and full year of 2007, respectively.
As of December 31, 2007, the Company had $46.5 million in cash and investments as compared to $73.6 million for the same period last year, a burn rate of $27.1 million for the full year 2007. The decrease of $27.1 million was principally due to operating losses incurred in 2007, partially offset by non-cash charges. The Company believes it has sufficient funds to execute its current business plans through the first quarter of 2009. Novavax expects that it will have access to additional cash through the sale of equity securities and or other non-dilutive financing.
Novavax's management will host its quarterly conference call at 10:00 a.m. Eastern time (7:00 a.m. Pacific time) today. The live conference call will be accessible via Novavax's website at http://www.novavax.com under Investor/Events or by telephone at 1-866-244-4629 (U.S. or Canada) or 1-703-639-1176 (International). An archive of the conference call will be available on Novavax's website approximately one hour after the event for 90 days. A replay of the conference call will also be available by telephone beginning March 14 at noon. To access the replay, dial 1-888-266-2081 and enter pass code 1202787.
Novavax Inc. is a clinical stage vaccine company committed to leading the global fight against infectious disease by creating novel, highly potent vaccines that are safer and more effective than current preventive options. Using the Company's proprietary virus-like particle (VLP) and Novasome(R) adjuvant technologies, Novavax is developing vaccines to protect against H5N1 pandemic influenza, seasonal flu and other viral diseases. Novavax's particulate vaccines closely match disease-causing viruses while lacking the genetic material to cause disease, which provides potential for greater immune protection at lower doses than current vaccines. With an exclusive portable manufacturing system that allows for rapid mass-production of vaccines, Novavax is uniquely positioned to meet global public health needs. Additional information about Novavax is available at http://www.novavax.com and in the company's various filings with the Securities and Exchange Commission.
Forward Looking Statements
Statements herein relating to future financial or business performance,
conditions or strategies and other financial and business matters,
including expectations regarding revenues, operating expenses, cash burn,
and clinical developments and anticipated milestones are forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act. Novavax cautions that these forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over time.
Factors that may cause actual results to differ materially from the results
discussed in the forward-looking statements or historical experience
include risks and uncertainties, including the Company's ability to
progress any product candidates in preclinical or clinical trials; the
scope, rate and progress of its preclinical studies and clinical trials and
other research and development activities; clinical trial results; even if
the data from preclinical studies or clinical trials is positive, the
product may not prove to be safe and efficacious; Novavax's pilot plant
facility is subject to extensive validation and FDA inspections, which may
result in delays and increases costs; the effect or outcome of the
Company's decision to sell Estrasorb(R); the human capital and other costs
Novavax will incur to exit the manufacturing facility; our ability to enter
into future collaborations with industry partners and the terms, timing and
success of any such collaboration; the cost of filing, prosecuting,
defending and enforcing any patent claims and other intellectual property
rights; our ability to obtain rights to technology; competition for
clinical resources and patient enrollment from drug candidates in
development by other companies with greater resources and visibility; our
ability to obtain adequate financing in the future through product
licensing, co-promotional arrangements, public or private equity or debt
financing or otherwise; general business conditions; competition; business
abilities and judgment of personnel; and the availability of qualified
personnel. Further information on the factors and risks that could affect
Novavax's business, financial conditions and results of operations, is
contained in Novavax's filings with the U.S. Securities and Exchange
Commission, which are available at http://www.sec.gov. These forward-looking
statements speak only as of the date of this press release, and Novavax
assumes no duty to update forward-looking statement.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share and per share information)
Three-month ended Year ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2006 2007 2006
Net product sales $13 $331 $(58) $641
and development 346 125 1,388 1,068
milestone fees 37 15 125 29
Total revenues 396 471 1,455 1,738
Operating costs and
Cost of products sold -- 50 163 237
development 4,177 3,080 17,600 11,329
administrative 2,919 3,342 13,963 11,288
expenses 7,096 6,472 31,726 22,854
Loss from continuing
interest (6,700) (6,002) (30,271) (21,116)
Interest income, net 255 692 1,681 1,539
Loss from continuing
operations (6,445) (5,310) (28,590) (19,577)
Loss from discontinued
operations (2,772) (839) (6,175) (3,491)
Net loss (9,217) (6,149) (34,765) (23,068)
Basic and diluted weighted
average number of common
shares used in computing
basic net loss per
share 61,200,777 61,075,194 61,101,474 58,664,365
Basic and diluted net loss per share
Loss per share from
continuing operations $(0.11) $(0.09) $(0.47) $(0.33)
Loss per share from
discontinued operations $(0.04) $(0.01) $(0.10) $(0.06)
Net loss per share $(0.15) $(0.10) $(0.57) $(0.39)
SELECTED BALANCE SHEET DATA
As of Dec. 31, As of Dec. 31,
Cash and cash equivalents $4,350 $7,161
Short-term investments 42,139 66,434
Total current assets 49,016 77,342
Working capital 42,810 72,003
Total assets 91,291 121,877
Long term debt
|SOURCE Novavax, Inc.|
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