10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 000-26770

NOVAVAX, INC.

(Exact name of registrant as specified in its charter)

Delaware			22-2816046
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
21 Firstfield Road	Gaithersburg	MD	20878
(Address of principal executive offices)			(Zip code)

(240) 268-2000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01 per share	NVAX	The Nasdaq Global Select Market

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated Filer	o
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of shares outstanding of the Registrant's Common Stock, $0.01 par value, was 78,215,105 as of July 31, 2022.

NOVAVAX, INC.

TABLE OF CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION		1
Item 1.	Consolidated Financial Statements	1
	Unaudited Consolidated Statements of Operations and Unaudited Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2022 and 2021	2
	Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021	3
	Unaudited Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2022 and 2021	4
	Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	5
	Notes to the Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
Item 4.	Controls and Procedures	32
PART II. OTHER INFORMATION		32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	33
Item 5.	Other Information	34
Item 6.	Exhibits	35
SIGNATURES		36

i

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

1

NOVAVAX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share information)

(unaudited)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
Revenue:
Product sales	$	55,455	$	—	$	641,083	$	—
Grants	107,774		272,489		207,075		719,382
Royalties and other	22,696		25,528		41,738		25,864
Total revenue	185,925		298,017		889,896		745,246
Expenses:
Cost of sales	271,077		—		286,281		—
Research and development	289,648		570,685		673,131		1,163,356
Selling, general, and administrative	108,160		73,161		204,152		136,351
Total expenses	668,885		643,846		1,163,564		1,299,707
Income (loss) from operations	(482,960)		(345,829)		(273,668)		(554,461)
Other income (expense):
Interest expense	(6,234)		(5,968)		(11,110)		(10,807)
Other income (expense)	(19,873)		3,028		(18,219)		(3,203)
Income (loss) before income tax expense	(509,067)		(348,769)		(302,997)		(568,471)
Income tax expense	1,418		3,548		4,080		6,565
Net income (loss)	$	(510,485)	$	(352,317)	$	(307,077)	$	(575,036)
Net income (loss) per share:
Basic	$	(6.53)	$	(4.75)	$	(3.97)	$	(7.82)
Weighted average number of common shares outstanding
Basic	78,143		74,118		77,305		73,580

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
Net loss	$	(510,485)	$	(352,317)	$	(307,077)	$	(575,036)
Other comprehensive income (loss):
Net unrealized losses on marketable securities available-for-sale, net of reclassifications	—		—		—		(9)
Foreign currency translation adjustment	(9,558)		4,527		(9,517)		(2,845)
Other comprehensive income (loss)	(9,558)		4,527		(9,517)		(2,854)
Comprehensive loss	$	(520,043)	$	(347,790)	$	(316,594)	$	(577,890)

The accompanying notes are an integral part of these financial statements.

2

NOVAVAX, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share information)

	June 30, 2022		December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,375,587	$	1,515,116
Restricted cash	10,274		11,490
Accounts receivable	194,533		454,993
Inventory	256,301		8,872
Prepaid expenses and other current assets	299,307		164,648
Total current assets	2,136,002		2,155,119
Property and equipment, net	254,526		228,696
Right of use asset, net	85,770		40,123
Intangible assets, net	4,033		4,770
Goodwill	123,467		131,479
Other non-current assets	19,195		16,566
Total assets	$	2,622,993	$	2,576,753
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	386,488	$	127,050
Accrued expenses	585,646		673,731
Deferred revenue	701,518		1,422,944
Current portion of finance lease liabilities	124,260		130,533
Convertible notes payable	324,169		—
Other current liabilities	34,158		36,061
Total current liabilities	2,156,239		2,390,319
Deferred revenue	814,629		172,528
Convertible notes payable	—		323,458
Other non-current liabilities	69,075		42,121
Total liabilities	3,039,943		2,928,426
Commitments and contingencies (Note 14)
Stockholders' equity (deficit):
Common stock, $0.01 par value, 600,000,000 shares authorized at June 30, 2022 and December 31, 2021; and 78,776,234 shares issued and 78,166,935 shares outstanding at June 30, 2022 and 76,433,151 shares issued and 75,841,171 shares outstanding at December 31, 2021	788		764
Additional paid-in capital	3,604,614		3,351,967
Accumulated deficit	(3,925,027)		(3,617,950)
Treasury stock, cost basis, 609,299 shares at June 30, 2022 and 591,980 shares at December 31, 2021	(86,455)		(85,101)
Accumulated other comprehensive loss	(10,870)		(1,353)
Total stockholders’ deficit	(416,950)		(351,673)
Total liabilities and stockholders’ deficit	$	2,622,993	$	2,576,753

The accompanying notes are an integral part of these financial statements.

3

NOVAVAX, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

Three and Six Months Ended June 30, 2022 and 2021

(in thousands, except share information)

(unaudited)

	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity (Deficit)
	Shares	Amount
Balance at March 31, 2022	78,722,337	$	787	$	3,566,292	$	(3,414,542)	$	(85,901)	$	(1,312)	$	65,324
Stock-based compensation	—	—		38,048		—		—		—		38,048
Stock issued under incentive programs	53,897	1		274		—		(554)		—		(279)
Foreign currency translation adjustment	—	—		—		—		—		(9,558)		(9,558)
Net loss	—	—		—		(510,485)		—		—		(510,485)
Balance at June 30, 2022	78,776,234	$	788	$	3,604,614	$	(3,925,027)	$	(86,455)	$	(10,870)	$	(416,950)
Balance at March 31, 2021	74,470,583	$	745	$	3,180,114	$	(2,096,918)	$	(44,457)	$	(357)	$	1,039,127
Stock-based compensation	—	—		53,123		—		—		—		53,123
Stock issued under incentive programs	201,768	2		3,848		—		(2,748)		—		1,102
Foreign currency translation adjustment	—	—		—		—		—		4,527		4,527
Net loss	—	—		—		(352,317)		—		—		(352,317)
Balance at June 30, 2021	74,672,351	$	747	$	3,237,085	$	(2,449,235)	$	(47,205)	$	4,170	$	745,562

	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity (Deficit)
	Shares	Amount
Balance at December 31, 2021	76,433,151	$	764	$	3,351,967	$	(3,617,950)	$	(85,101)	$	(1,353)	$	(351,673)
Non-cash stock-based compensation	—	—		70,981		—		—		—		70,981
Stock issued under incentive programs	145,685	2		2,303		—		(1,354)		—		951
Issuance of common stock, net of issuance costs of $2,311	2,197,398	22		179,363		—		—		—		179,385
Foreign currency translation adjustment	—	—		—		—		—		(9,517)		(9,517)
Net loss	—	—		—		(307,077)		—		—		(307,077)
Balance at June 30, 2022	78,776,234	$	788	$	3,604,614	$	(3,925,027)	$	(86,455)	$	(10,870)	$	(416,950)
Balance at December 31, 2020	71,350,365	$	714	$	2,535,476	$	(1,874,199)	$	(41,806)	$	7,024	$	627,209
Non-cash stock-based compensation	—	—		106,183		—		—		—		106,183
Stock issued under incentive programs	743,019	7		30,593		—		(5,399)		—		25,201
Issuance of common stock, net of issuance costs of $5,145	2,578,967	26		564,833		—		—		—		564,859
Unrealized loss on marketable securities	—	—		—		—		—		(9)		(9)
Foreign currency translation adjustment	—	—		—		—		—		(2,845)		(2,845)
Net loss	—	—		—		(575,036)		—		—		(575,036)
Balance at June 30, 2021	74,672,351	$	747	$	3,237,085	$	(2,449,235)	$	(47,205)	$	4,170	$	745,562

The accompanying notes are an integral part of these financial statements.

4

NOVAVAX, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Six Months Ended June 30,
	2022		2021
Operating Activities:
Net loss	$	(307,077)	$	(575,036)
Reconciliation of net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	13,485		4,727
Non-cash stock-based compensation	70,981		106,183
Provision for excess and obsolete inventory	155,662		—
Right-of-use assets expensed, net of credits received	(3,291)		12,707
Other items, net	(642)		3,855
Changes in operating assets and liabilities:
Inventory	(403,725)		—
Accounts receivable, prepaid expenses, and other assets	112,845		193,004
Accounts payable, accrued expenses, and other liabilities	179,158		115,212
Deferred revenue	(76,809)		946,845
Net cash provided by (used in) operating activities	(259,413)		807,497
Investing Activities:
Capital expenditures	(41,402)		(28,932)
Purchases of marketable securities	—		(2,167)
Proceeds from maturities and sale of marketable securities	—		159,807
Net cash provided by (used in) investing activities	(41,402)		128,708
Financing Activities:
Net proceeds from sales of common stock	179,385		564,859
Net proceeds from the exercise of stock-based awards	1,050		26,903
Finance lease payments	(15,911)		(53,618)
Net cash provided by financing activities	164,524		538,144
Effect of exchange rate on cash, cash equivalents, and restricted cash	(4,453)		(348)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(140,744)		1,474,001
Cash, cash equivalents, and restricted cash at beginning of period	1,528,259		648,738
Cash, cash equivalents, and restricted cash at end of period	$	1,387,515	$	2,122,739
Supplemental disclosure of non-cash activities:
Right-of-use assets from new lease agreements	$	69,366	$	28,826
Capital expenditures included in accounts payable and accrued expenses	$	17,890	$	11,037
Supplemental disclosure of cash flow information:
Cash interest payments	$	8,604	$	10,046
Cash paid for income taxes	$	17,778	$	3,017

    

The accompanying notes are an integral part of these financial statements.

5

NOVAVAX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

(unaudited)

Note 1 – 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 coronavirus vaccine, NVX-CoV2373, and its lead influenza vaccine candidate, a quadrivalent influenza vaccine, previously known as NanoFlu, are genetically engineered, three-dimensional nanostructures of recombinant proteins critical to disease pathogenesis and may elicit differentiated immune responses, which may be more efficacious than naturally occurring immunity or traditional vaccines. NVX-CoV2373 and the Company’s influenza vaccine include the use of the Company's proprietary Matrix-M™ adjuvant. The Company is developing various variant vaccines, including for Omicron subvariants, and bivalent formulations with prototype vaccine (NVX-CoV2373). The Company has announced preclinical boosting data for NVX-CoV2373, NVX-CoV2515, and bivalent formulations which demonstrated strong antibody levels. The Company is also participating in an ongoing Phase 3 strain change trial to assess safety and antibody responses following primary vaccination with mRNA vaccines.

As of June 30, 2022, the Company had received approval, interim authorization, provisional approval, conditional marketing authorization, and emergency use authorization (“EUA”) from multiple regulatory authorities globally for NVX-CoV2373, including by the World Health Organization (“WHO”), as well as the European Medicines Agency's (“EMA”) and the United Kingdom's Medicines and Healthcare products Regulatory Agency (“MHRA”), both of which are considered regulatory authorities that apply stringent standards and meet the WHO standards for quality, safety, and efficacy in their regulatory review process. In July 2022, the Company received emergency use authorization for NVX-CoV2373 from the U.S. Food and Drug Administration (“FDA”).

The Company commenced commercial shipments of NVX-CoV2373 doses under the brand name Nuvaxovid™ in 2022.

Note 2 – 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, respectively, 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 income included a foreign currency translation loss of $10.9 million and $1.4 million as of June 30, 2022 and December 31, 2021, respectively.

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, 2021. 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.

Reclassifications

Certain amounts reported in prior periods have been reclassified to conform to current period financial statement presentation. These reclassifications have no material effect on previously reported financial position, cash flows, or results of operations.

6

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 - Product Sales

Product sales are associated with the Company’s NVX-CoV2373 supply agreements, sometimes referred to as advance purchase agreements (“APAs”), with various international governments. The Company recognizes revenue from product sales based on the transaction price per dose calculated in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) when control of the product transfers to the customer and customer acceptance has occurred, unless such acceptance provisions are deemed perfunctory. If an APA includes a term that may have the effect of decreasing the price per dose of previously delivered shipments, the Company constrains the price until it is probable that a significant reversal in revenue recognized will not occur.

Cost of Sales

Cost of sales includes cost of raw materials, production, and manufacturing overhead costs associated with the Company’s product sales during the period. Cost of sales also includes adjustments for excess, obsolete, or expired inventory; idle capacity; and losses on firm purchase commitments to the extent the cost cannot be recovered based on estimates about future demand. Cost of sales does not include certain expenses related to raw materials, production, and manufacturing overhead costs which were expensed prior to regulatory authorization as described under the caption “Inventory” below.

Inventory

Inventory is recorded at the lower of cost or net realizable value under the First In, First Out (“FIFO”) methodology, taking into consideration the expiration of the inventory item. The Company determines the cost of raw materials using moving average costs and the cost of semi-finished and finished goods using a standard cost method adjusted on a periodic basis to reflect the deviation in the actual cost from the standard cost estimate. Standard costs consist primarily of the cost of manufacturing goods, including direct materials, direct labor, the services and products of third-party suppliers, and the application of manufacturing overhead. The Company utilizes third-party contract manufacturing organizations (“CMOs”), contract development and manufacturing organizations (“CDMOs”), and other suppliers and service organizations to support the procurement and processing of raw materials, management of inventory, packaging, and the delivery process. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolete, or expired inventory through cost of sales.

Prior to initial regulatory authorization for its product candidates, the Company expenses costs relating to raw materials, production, and manufacturing overhead costs as research and development expenses in the consolidated statements of operations, in the period incurred. Subsequent to initial regulatory authorization for a product candidate, the Company capitalizes the costs of production for a particular supply chain as inventory when the Company determines that it has a present right to the economic benefit associated with the product.

Recent Accounting Pronouncements

Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) 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” (“CECL”) 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 ASU is effective for the Company beginning on January 1, 2023. Management is currently evaluating the effect of the guidance and does not expect it to have a material impact on the Company’s consolidated financial statements.

7

Adopted

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplified the accounting for certain financial instruments with characteristics of liabilities and equity, including certain convertible instruments and contracts in an entity’s own equity. Specifically, the new standard removed the separation models required for convertible debt with cash conversion features and convertible instruments with beneficial conversion features. It also removed certain settlement conditions that are currently required for equity contracts to qualify for the derivative scope exception and simplified the diluted earnings per share calculation for convertible instruments. The Company adopted ASU 2020-06 on January 1, 2022 using a modified retrospective approach, which did not have a material impact on the Company’s consolidated financial statements.

Note 3 – Revenue

The Company's accounts receivable included $165.6 million and $419.7 million related to amounts that were billed to customers and $29.0 million and $35.3 million related to amounts which had not yet been billed to customers as of June 30, 2022 and December 31, 2021, respectively. During the six months ended June 30, 2022, changes in the Company's accounts receivables and deferred revenue balances were as follows (in thousands):

	December 31, 2021		Additions	Deductions	June 30, 2022
Contract receivables:
Accounts receivable	$	454,993	808,713	(1,069,173)	$	194,533
Contract liabilities:
Deferred revenue(1)	$	1,595,472	49,107	(128,432)	$	1,516,147

(1)    Amount is comprised of $701.5 million and $1.4 billion of current Deferred revenue and $814.6 million and $172.5 million of non-current Deferred revenue as of June 30, 2022 and December 31, 2021, respectively.

The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties, was approximately $5 billion as of June 30, 2022. 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 under certain of our APAs. Failure to meet regulatory milestones, product volume, or delivery timing obligations under the Company’s APA agreements may require the Company to refund portions of upfront payments or result in reduced future payments, which could result in a material and adverse effect on our unsatisfied performance obligations. The remaining unfilled performance obligations not related to grant agreements or APAs are expected to be fulfilled in less than 12 months.

Grants

The Company recognized grant revenue as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
U.S. government partnership (“OWS”)	$	107,774	$	239,493	$	207,075	$	603,053
U.S. Department of Defense (“DoD”)	—		1,041		—		20,185
Coalition for Epidemic Preparedness Innovations (“CEPI”)	—		31,955		—		93,516
Bill & Melinda Gates Foundation (“BMGF”)	—		—		—		2,628
Total grant revenue	$	107,774	$	272,489	$	207,075	$	719,382

8

U.S. Government Partnership

The Company’s U.S. government partnership consists of an agreement (“the “OWS 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 (“OWS”). In July 2021, the U.S. government instructed the Company to prioritize alignment with the FDA on the Company's analytic methods before conducting additional U.S. manufacturing and further indicated that the U.S. government would not fund additional U.S. manufacturing until such alignment was made. In June 2022, the U.S. government agreed to the manufacture and delivery of approximately 3 million doses of NVX-CoV2373 under the OWS Agreement as the Company had completed alignment with the FDA’s analytic methods. The Company updated its estimate-at-completion to reflect the impact of this authorization to the recognition of the fixed fee under the contract. In July 2022, the Company formally modified the OWS Agreement to provide for an initial delivery to the U.S. government of approximately 3 million doses of NVX-CoV2373, and the Company modified its existing agreement with the U.S. Department of Defense (“DoD”) to provide for an initial delivery of approximately 0.2 million doses of NVX-CoV2373 (see Note 15).

Royalties and Other

During the three and six months ended June 30, 2022, the Company recognized $1.7 million and $9.2 million, respectively, in revenue related to sales-based royalties. During the three months ended June 30, 2022, the Company recognized a $20.0 million milestone payment upon the first sale of NVX-CoV2373 in Japan. During the three months ended June 30, 2021, the Company recognized $23.5 million in revenue related to sales-based royalties. During the three months ended March 31, 2021, the Company did not recognize any revenue related to sales-based royalties.

Advance Purchase Agreements (APAs)

Under the terms of the Company’s contracted supply commitment with Gavi, which includes the supply obligation of its licensed partner, Serum Institute of India Private Limited (“SIIPL”), 1.1 billion doses of NVX-CoV2373 are to be made available to countries participating in the COVAX Facility, which was established to allocate and distribute vaccines equitably to participating countries and economies. The Novavax portion is a supply agreement that contemplates that the Company will manufacture and distribute 350 million doses. Under that agreement with Gavi, the Company received an upfront payment of $350 million from Gavi in 2021 and an additional payment of $350 million in the first quarter of 2022 related to the Company’s achieving WHO Emergency Use Listing. Although Novavax is prepared to deliver the quantities of NVX-CoV2373 doses to Gavi under the terms of the supply agreement, the Company was notified by Gavi of its intent to seek to revise the number and timing of doses of NVX-CoV2373 supplied by Novavax under such agreement. Furthermore, Gavi may seek partial or full recovery of the prior nonrefundable payments it has made to Novavax. The Company’s position is that Gavi has no contractual right to recover prior nonrefundable payments. To date, Novavax has not received an order from Gavi and the timing and quantities of future orders to deliver NVX-CoV2373 to the COVAX facility are unclear.

Under the terms of the Company’s SARS-CoV-2 Vaccine Supply Agreement, originally entered into in October 2020 (the “Original UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), the Authority agreed to purchase 60 million doses of NVX-CoV2373. In July 2022, the Company entered into an Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (the “Amended and Restated UK Supply Agreement”) with the Authority, under which the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses of NVX-CoV2373, with the number of additional doses contingent on the Company’s timely achievement of supportive recommendations from the Joint Committee on Vaccination and Immunisation (the “JCVI”) (see Note 15).

The Company has an APA with the European Commission (“EC”) acting on behalf of various European Union member states to supply a minimum of 20 million and up to 100 million initial doses of NVX-CoV2373, with the option for the EC to purchase an additional 100 million doses up to a maximum aggregate of 200 million doses in one or more tranches, through 2023. The Company is in the process of finalizing a revised delivery schedule for the remaining 42 million doses of the 70 million previously committed doses under the APA that were originally scheduled for delivery during the first and second quarters of 2022. In July and August 2022, the Company was notified by the EC that it was cancelling 5 million doses of its prior commitment originally scheduled for delivery in the first and second quarters of 2022, in accordance with the APA, and reducing the order to 65 million doses (see Note 15).

9

Note 4 – Collaboration, License, and Supply Agreements

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. SIIPL agreed to purchase the Company’s Matrix-MTM 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 Serum Life Sciences Limited (“SLS”) under which SIIPL and SLS supply the Company with NVX-CoV2373 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. The Company has expanded its license and supply arrangements with SIIPL to include its proprietary COVID-19 variant antigen candidate(s) so that SIIPL can manufacture and commercialize a vaccine targeting COVID-19 variants, including the Omicron subvariants, and supply such variant vaccine to the Company.

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 the Company’s Matrix-M™ adjuvant to manufacture 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 the low to middle double-digit range. During the three months ended June 30, 2022, the Company recognized a milestone payment of $20.0 million upon the first sale in Japan.

SK bioscience, Co., Ltd.

The Company has a collaboration and license agreement with SK bioscience, Co., Ltd. (“SK bioscience”) to manufacture and commercialize NVX-CoV2373 for sale to the governments of Korea, Thailand, and Vietnam. SK bioscience pays a royalty in the low to middle double-digit range. Additionally, the Company has a manufacturing supply arrangement with SK bioscience under which SK bioscience supplies the Company with the antigen component of NVX-CoV2373 for use in the final drug product globally, including product to be distributed by the COVAX Facility, which was established to allocate and distribute vaccines equitably to participating countries and economies. In July 2022, the Company signed an additional agreement with SK bioscience for the technology transfer of the Company’s proprietary COVID-19 variant antigen materials so that SK bioscience can manufacture the drug substance targeting COVID-19 variants, including the Omicron subvariants (see Note 15). The companies also signed an agreement to manufacture and supply the Novavax COVID-19 vaccine in a prefilled syringe.

Other Supply Agreements

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.

Note 5 – 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 the same such amounts shown in the statements of cash flows (in thousands):

	June 30, 2022		December 31, 2021
Cash and cash equivalents	$	1,375,587	$	1,515,116
Restricted cash, current	10,274		11,490
Restricted cash, non-current(1)	1,654		1,653
Cash, cash equivalents, and restricted cash	$	1,387,515	$	1,528,259

(1)Classified as Other non-current assets as of June 30, 2022 and December 31, 2021, on the consolidated balance sheets.

10

Note 6 – Fair Value Measurements

The following table represents the Company’s fair value hierarchy for its financial assets and liabilities (in thousands):

	Fair Value at June 30, 2022						Fair Value at December 31, 2021
Assets	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Money market funds(1)	$	500,885	$	—	$	—	$	361,822	$	—	$	—
Government-backed securities(1)	—		179,500		—		—		266,250		—
Corporate debt securities(1)	—		594,750		—		—		790,672		—
Total cash equivalents	$	500,885	$	774,250	$	—	$	361,822	$	1,056,922	$	—
Liabilities
Convertible notes payable	$	—	$	323,112	$	—	$	—	$	447,509	$	—

(1)All investments are classified as cash and cash equivalents as of June 30, 2022 and December 31, 2021, on the consolidated balance sheets.

Cash equivalents are recorded at cost, which approximate fair value due to their short-term nature. Pricing of the Company's Notes (see Note 10) has been estimated using other observable inputs, including the price of the Company's common stock, implied volatility, interest rates, and credit spreads among others.

During the six months ended June 30, 2022 and 2021, the Company did not have any transfers between levels.

Note 7 – Inventory

Inventory consisted of the following (in thousands):

	June 30, 2022		December 31, 2021
Raw materials	$	55,154	$	8,872
Semi-finished goods	71,676		—
Finished goods	129,471		—
Total inventory	$	256,301	$	8,872

Inventory write-downs as a result of excess, obsolescence, expiry, or other reasons, and losses on firm purchase commitments are recorded as a component of cost of sales in our consolidated statements of operations. For the three months ended June 30, 2022, inventory write-downs were $155.7 million. There were no inventory write-downs for the three months ended March 31, 2022. For the three months ended June 30, 2022, losses on firm purchase commitments were $99.6 million. There were no losses on firm purchase commitments during the three months ended March 31, 2022. There were no inventory write-downs or losses on firm purchase commitments during 2021.

Note 8 – Intangible Assets and Goodwill

Identifiable Intangible Assets

Purchased intangible assets consisted of the following (in thousands):

	June 30, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated  Amortization		Intangible Assets, Net		Gross Carrying Amount		Accumulated  Amortization		Intangible Assets, Net
Finite-lived intangible assets:
Proprietary adjuvant technology	$	7,278	$	(3,245)	$	4,033	$	8,239	$	(3,469)	$	4,770
Collaboration agreements	3,286		(3,286)		—		3,722		(3,722)		—
Total identifiable intangible assets	$	10,564	$	(6,531)	$	4,033	$	11,961	$	(7,191)	$	4,770

11

Amortization expense for the six months ended June 30, 2022 and 2021 was $0.2 million. Estimated amortization expense for existing intangible assets for the remainder of 2022 and for each of the five succeeding years ending December 31 will be as follows (in thousands):

Year	Amount
2022 (remainder)	$	182
2023	364
2024	364
2025	364
2026	364
2027	364

Goodwill

The change in the carrying amounts of goodwill for the six months ended June 30, 2022 was as follows (in thousands):

	Amount
Balance at December 31, 2021	$	131,479
Currency translation adjustments	(8,012)
Balance at June 30, 2022	$	123,467

Note 9 - Leases

During the six months ended June 30, 2022, the Company concluded that changes in facts and circumstances on its CMO and CDMO agreements that had previously been determined to represent embedded lease arrangements resulted in the modification of existing leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration in the contracts and reassessed the lease classification as of the effective date of the modification. As a result, during the six months ended June 30, 2022, the Company recognized a Right-Of-Use (“ROU”) asset and a corresponding long-term operating lease liability of $19.8 million on the remeasurement of one of its long-term supply agreements using an average incremental borrowing rate of 3.0%. The Company expensed the ROU asset since it relates to research and development activities for the development of NVX-CoV2373 for which the Company does not have an alternative future use.

During the three and six months ended June 30, 2022, the Company recognized a short-term lease expense of $5.8 million and $83.9 million, respectively, related to its embedded leases and expensed $9.4 million and $19.8 million, respectively, of 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 and six months ended June 30, 2021, the Company recognized a short-term lease expense of $86.6 million and $214.2 million, respectively, related to its embedded leases and expensed $11.4 million and $12.4 million, respectively, of 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 and six months ended June 30, 2022, the Company recognized $2.3 million and $3.4 million of interest expense, respectively, on its finance lease liabilities. During the three and six months ended June 30, 2021, the Company recognized $1.8 million and $4.0 million of interest expense, respectively, on its finance lease liabilities.

During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland. The lease is for approximately 170,000 square feet of space that the Company intends to use for manufacturing, research and development, and offices. The term of the lease is 15 years with options to extend the lease. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs. During the three months ended March 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, the third floor of the premises and recognized a ROU asset of $47.8 million and related lease obligation for the combined third floor and land lease as the lease commencement date for accounting purposes had occurred.

12

Note 10 – Debt

Convertible Notes

The Company incurred approximately $10.0 million of debt issuance costs during the first quarter of 2016 relating to the issuance of $325 million aggregate principal amount of convertible senior unsecured notes that will mature on February 1, 2023 (the “Notes”), which were recorded as a reduction to the Notes on the consolidated balance sheet. The $10.0 million of debt issuance costs is being amortized and recognized as additional interest expense over the seven-year contractual term of the Notes on a straight-line basis, which approximates the effective interest rate method.

Total convertible notes payable consisted of the following at (in thousands):

	June 30, 2022		December 31, 2021
Principal amount of Notes	$	325,000	$	325,000
Unamortized debt issuance costs	(831)		(1,542)
Total convertible notes payable(1)	$	324,169	$	323,458

(1)    Convertible notes are classified as current liabilities and as non-current liabilities in the consolidated balance sheets as of June 30, 2022 and December 31, 2021, respectively.

The interest expense incurred in connection with the Notes consisted of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Coupon interest at 3.75%	$	3,047	$	3,047	$	6,094	$	6,094
Amortization of debt issuance costs	356		356		712		712
Total interest expense on Notes	$	3,403	$	3,403	$	6,806	$	6,806

Note 11 – Stockholders' Equity (Deficit)

During the three months ended March 31, 2022, the Company sold 2.2 million of shares of its common stock resulting in net proceeds of approximately $179 million, under its most recent At Market Issuance Sales agreement entered in June 2021 (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 June 30, 2022, the remaining balance under the June 2021 Sales Agreement was approximately $318 million.

During the six months ended June 30, 2021, the Company sold 2.6 million shares of its common stock resulting in net proceeds of approximately $565 million, under its various At Market Issuance Sales agreements.

Note 12 – Stock-Based Compensation

Equity Plans

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, which includes an increase of 2.4 million shares approved for issuance under the 2015 Plan at the Company's 2022 annual meeting of stockholders. All such shares authorized for issuance under the 2015 Plan have been reserved. The 2015 Plan will expire on March 4, 2025.

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.

13

The 2015 Plan permits 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 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 stock options are generally subject to vesting over periods ranging from one to four years.

The Company recorded all stock-based compensation expense in the consolidated statements of operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	19,695	$	24,779	$	36,582	$	48,569
General and administrative	18,353		28,344		34,399		57,614
Total stock-based compensation expense	$	38,048	$	53,123	$	70,981	$	106,183

As of June 30, 2022, there was approximately $212 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 June 30, 2022. 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 six months ended June 30, 2022 and 2021 was approximately $8 million and $115 million, respectively.

Stock Options and Stock Appreciation Rights

The following is a summary of stock options and SARs activity under the 2015 Plan and 2005 Plan for the six months ended June 30, 2022:

	2015 Plan			2005 Plan
	Stock Options	Weighted-Average Exercise Price		Stock Options	Weighted-Average Exercise Price
Outstanding at December 31, 2021	3,635,837	$	42.60	68,225	$	109.52
Granted	506,821	73.94		—
Exercised	(59,727)	15.61		(3,000)	31.10
Canceled	(35,195)	78.51		(1,500)	121.00
Outstanding at June 30, 2022	4,047,736	$	46.61	63,725	$	112.94
Shares exercisable at June 30, 2022	1,463,037	$	55.28	63,725	$	112.94
Shares available for grant at June 30, 2022	4,834,171

14

The fair value of stock options granted under the 2015 Plan was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Weighted average Black-Scholes fair value of stock options granted	$43.21	$166.66	$62.52	$131.66
Risk-free interest rate	2.7%-3.2%	0.6%-1.1%	1.4%-3.2%	0.5%-1.1%
Dividend yield	—%	—%	—%	—%
Volatility	120.5%-136.7%	126.2%-142.0%	120.5%-136.7%	124.7%-142.0%
Expected term (in years)	4.0-6.2	4.1-6.1	4.0-6.2	4.1-6.1

The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs outstanding under the 2015 Plan and 2005 Plan as of June 30, 2022 was approximately $91 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 2015 Plan and 2005 Plan as of June 30, 2022 was approximately $30 million and 6.5 years, respectively.

Restricted Stock Units

The following is a summary of RSU activity for the six months ended June 30, 2022:

	Number of Shares	Per Share Weighted- Average Fair Value
Outstanding and unvested at December 31, 2021	819,828	$	116.70
Granted	882,828	74.34
Vested	(55,425)	157.97
Forfeited	(71,989)	110.57
Outstanding and unvested at June 30, 2022	1,575,242	$	91.79

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). No ESPP option periods commenced during the three months ended June 30, 2022 and 2021. As of June 30, 2022, there were 0.7 million shares available for issuance under the ESPP.

The ESPP is considered compensatory for financial reporting purposes. As such, the fair value of ESPP shares was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Six Months Ended June 30,
	2022	2021
Range of Black-Scholes fair values of ESPP shares granted	$44.67-$79.74	$128.70-$238.85
Risk-free interest rate	0.6%-1.4%	0.1%
Dividend yield	—%	—%
Volatility	116.2%-142.9%	120.4%-159.4%
Expected term (in years)	0.5-2	0.5-2.0

15

Note 13 – 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 June 30, 2022 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 June 30, 2022, 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.

The Company recognized federal and state income tax expense of $1.4 million and $1.9 million, in total, for the three and six months ended June 30, 2022, respectively, and did not recognize federal or state income tax expense for the three and six months ended June 30, 2021. The Company recognized income tax expense related to foreign withholding tax on royalties of $2.2 million for the six months ended June 30, 2022 and $3.5 million and $6.6 million for the three and six months ended June 30, 2021, respectively. The Company did not recognize income tax expense related to foreign withholding tax on royalties for the three months ended June 30, 2022.

Note 14 – 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 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 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 vaccine’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 June 9, 2022, the co-lead plaintiffs filed an opposition to the motion to dismiss and on July 11, 2022, the Company filed a reply brief. The matter is now fully briefed. The Court has not indicated whether it intends to schedule any hearing on the motion before issuing a ruling.

After the Sinnathurai Action was filed, five derivative lawsuits were filed: Robert E. Meyer v. Stanley C. Erck, et al., No. 8:21-cv-02996-TDC (the “Meyer Action”), Shui Shing Yung v. Stanley C. Erck, et al., No. 8:21-cv-03248-TDC (the “Yung Action”), William Kirst, et al. v. Stanley C. Erck, et al., No. 8:22-cv-00024-TDC (the “Kirst Action”), Amy Snyder v. Stanley C. Erck, et al., No. 8:22-cv-01415-TDC (the “Snyder Action”), and Charles R. Blackburn, et al. v. Stanley C. Erck, et al., No. 1:22-cv-01417-TDC (the “Blackburn Action”). The Meyer, Yung, Snyder, and Blackburn Actions were filed in the U.S. District Court for the District of Maryland. The Kirst Action was filed in the Circuit Court for Montgomery County, Maryland, and shortly thereafter removed to the U.S. District Court for the District of Maryland by the defendants. The derivative lawsuits name members of the 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.

16

On July 21, 2022, the Court issued a memorandum opinion and order remanding the Kirst Action to state court. On February 4, 2022, the Court entered an order consolidating the Meyer and Yung Actions (the “Consolidated Derivative Action”). The plaintiffs in the Consolidated Derivative Action filed their consolidated derivative complaint on April 25, 2022. On May 10, 2022, the Court entered an order in the Consolidated Derivative Action 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. If a related derivative action is filed and is not stayed, the Meyer and Yung plaintiffs may seek to terminate the stay. On June 10, 2022, the Snyder and Blackburn Actions were filed. The Snyder and Blackburn plaintiffs have expressed their intent to move the court to consolidate all of the derivative actions pending in Maryland federal court and to appoint lead counsel. On July 21, 2022, the Court ordered the parties in the Consolidated Derivative Action, the Snyder Action, and the Blackburn Action to meet and confer concerning consolidation, the appointment of lead counsel, and the ongoing stay of proceedings in the Consolidated Derivative Action. Should the parties fail to reach agreement on those issues, the Snyder and Blackburn plaintiffs were granted leave to file a motion for consolidation and appointment of lead counsel by August 18, 2022.

On March 29, 2022, Par Sterile Products, LLC (“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 (“MSA”) that the Company entered into with Par in September 2020 to provide fill-finish manufacturing services for NVX-CoV2373. The matter is at a preliminary stage and therefore the potential loss is not reasonably estimable. While the Company maintains that no breach of the MSA has occurred and intends to vigorously defend the matter, if the final resolution of the matter is adverse to the Company, it could have a material impact on the Company’s financial position, results of operations, or cash flows.

The Company is also involved in various legal proceedings arising in the normal course of business. Although the outcomes of these legal proceedings are inherently difficult to predict, management does not expect the resolution of these legal proceedings to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

Note 15 – Subsequent Events

In July 2022, the Company received emergency use authorization for NVX-CoV2373 from the FDA to provide a two-dose primary series in individuals 18 years of age and over.

In July 2022, the Company entered into a modification to the OWS Agreement that amended the terms of such agreement to provide for (i) an initial delivery to the U.S. government of approximately 3 million doses of NVX-CoV2373, contingent on the timing of EUA approval by the FDA, as well as the timing of label language and artwork approvals by the FDA and the recommendation of the Advisory Committee on Immunization Practices within the United States Centers for Disease Control and Prevention, and (ii) any additional manufacture and delivery to the U.S. government up to an aggregate of 100 million doses of NVX-CoV2373 contemplated by the original OWS Agreement (inclusive of the initial batch of approximately 3 million doses) dependent on U.S. government demand, FDA guidance on strain selection, agreement between the parties on the price of such doses, and available funding. The 3 million initial doses were delivered in July 2022. Additionally, in July 2022, the Company modified its existing agreement with the DoD to provide for the initial delivery of 0.2 million doses of NVX-CoV2373 after receipt of EUA approval from the FDA, with delivery of the remaining 9.8 million doses of NVX-CoV2373 contemplated by the original agreement subject to DoD demand and available funding.

In July 2022, the Company entered into the Amended and Restated UK Supply Agreement with the Authority, which amended and restated in its entirety the Original UK Supply Agreement. Under the Amended and Restated UK Supply Agreement, the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses of NVX-CoV2373, with the number of additional doses contingent on the Company’s timely achievement of supportive recommendations from the JCVI. In the event that the Company is unable to achieve the JCVI supportive recommendations, it may have to repay up to $225.0 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement. Under the Amended and Restated UK Supply Agreement, the Authority also has the option to purchase up to an additional 44 million doses, in one or more tranches, through 2024.

In July 2022 and August 2022, the Company was notified by the EC that it was cancelling its prior commitment for 5 million doses originally scheduled for delivery in the first and second quarters of 2022, in accordance with the APA.

In July 2022, the Company signed an agreement with SK bioscience for the technology transfer of the Company’s proprietary COVID-19 variant antigen materials so that SK bioscience can manufacture the drug substance targeting COVID-19 variants, including the Omicron subvariants. In addition, the companies signed an agreement to manufacture and supply the Novavax COVID-19 vaccine in a prefilled syringe.

17

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Any statements in the discussion below and elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) about expectations, beliefs, plans, objectives, assumptions, or future events or performance of Novavax, Inc. (“Novavax,” and together with its wholly owned subsidiaries, the “Company,” “we,” or “us”) are not historical facts and are forward-looking statements. Such forward-looking statements include, without limitation, statements about our capabilities, goals, expectations regarding future revenue and expense levels, and capital raising activities; our operating plans and prospects; potential market sizes and demand for our product candidates; the efficacy, safety, and intended utilization of our product candidates; the development of our clinical-stage product candidates and our recombinant vaccine and adjuvant technologies; the development of our preclinical product candidates; our expectations related to enrollment in our clinical trials; the conduct, timing, and potential results from clinical trials and other preclinical studies; plans for and potential timing of regulatory filings; our expectation of manufacturing capacity, timing, production, distribution, and delivery for our coronavirus vaccine candidate (“NVX-CoV2373”) by us and our partners; our estimate of the number of individuals who may potentially be reached by NVX-CoV2373; our expectations with respect to the anticipated ongoing development and commercialization or licensure of NVX-CoV2373 and our seasonal quadrivalent influenza vaccine, previously known as NanoFlu; the expected timing, content, and outcomes of regulatory actions; funding from the U.S. government partnership formerly known as Operation Warp Speed (“OWS”), the U.S. Department of Defense (“DoD”), and the Coalition for Epidemic Preparedness Innovations (“CEPI”), and payments from the Bill & Melinda Gates Foundation (“BMGF”); funding under our advance purchase agreements and supply agreements and amendments to, or termination of, any such agreement; our available cash resources and usage and the availability of financing generally; plans regarding partnering activities and business development initiatives; and other matters referenced herein. Generally, forward-looking statements can be identified through the use of words or phrases such as “believe,” “may,” “could,” “will,” “would,” “possible,” “can,” “estimate,” “continue,” “ongoing,” “consider,” “anticipate,” “intend,” “seek,” “plan,” “project,” “expect,” “should,” “would,” “aim,” or “assume,” the negative of these terms, or other comparable terminology, although not all forward-looking statements contain these words.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs and expectations about the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Forward-looking statements involve estimates, assumptions, risks, and uncertainties that could cause actual results or outcomes to differ materially from those expressed or implied in any forward-looking statements, and, therefore, you should not place considerable reliance on any such forward-looking statements. Such risks and uncertainties include, without limitation, challenges satisfying, alone or together with partners, various safety, efficacy, and product characterization requirements, including those related to process qualification and assay validation, necessary to satisfy applicable regulatory authorities, such as the U.S. Food and Drug Administration (“FDA”), World Health Organization (“WHO”), United Kingdom (“UK”) Medicines and Healthcare Products Regulatory Agency (“MHRA”), the European Medicines Agency (“EMA”), the Republic of Korea’s Ministry of Food and Drug Safety (“MFDS”), or Japan’s Ministry of Health, Labour and Welfare (“MHLW”); unanticipated challenges or delays in conducting clinical trials; difficulty obtaining scarce raw materials and supplies; resource constraints, including human capital and manufacturing capacity, constraints on the ability of Novavax to pursue planned regulatory pathways, alone or with partners, in multiple jurisdictions simultaneously, leading to staggering of regulatory filings, and potential regulatory actions; challenges meeting contractual requirements under agreements with multiple commercial, governmental, and other entities; and other risks and uncertainties identified in Part I, Item 1A “Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which may be detailed and modified or updated in other documents filed with the United States Securities and Exchange Commission (“SEC”) from time to time, and are available at www.sec.gov and at www.novavax.com. You are encouraged to read these filings as they are made.

Information in this Quarterly Report includes a financial measure that was not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which we refer to as adjusted cost of sales. We are presenting this non-GAAP financial measure to assist an understanding of our business and its performance. Adjusted cost of sales includes an estimate of standard manufacturing costs that were previously expensed to research and development prior to regulatory approvals for NVX-CoV2373 that would otherwise have been capitalized to inventory. Any non-GAAP financial measures presented are not, and should not be viewed as, substitutes for financial measures required by GAAP, have no standardized meaning prescribed by GAAP, and may not be comparable to the calculation of similar measures of other companies.

We cannot guarantee future results, events, level of activity, performance, or achievement. Any or all of our forward-looking statements in this Quarterly Report may turn out to be inaccurate or materially different from actual results. Further, any forward-looking statement speaks only as of the date when it is made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

18

Overview

Novavax, Inc., together with our wholly-owned subsidiaries, is a biotechnology company that promotes improved health globally through the discovery, development, and commercialization of innovative vaccines to prevent serious infectious diseases. Our proprietary recombinant technology platform harnesses the power and speed of genetic engineering to efficiently produce highly immunogenic nanoparticle vaccines designed to address urgent global health needs.

Our vaccine candidates are genetically engineered nanostructures of conformationally correct recombinant proteins that mimic those found on natural pathogens. This technology enables the immune system to recognize the right target proteins from different angles and develop protective antibodies. We believe that our vaccine technology may lead to the induction of a differentiated immune response that may be more efficacious than naturally occurring immunity or other vaccine approaches. Our vaccine candidates also incorporate our proprietary saponin-based Matrix-M™ adjuvant to enhance the immune response and stimulate higher levels of functional antibodies and induce a cellular immune response.

We have developed a COVID-19 vaccine (“NVX-CoV2373,” “Nuvaxovid™,” “Covavax™”), and are developing an influenza vaccine, a COVID-19-Influenza Combination vaccine (“CIC”), and additional vaccine candidates. NVX-CoV2373 has received approval, interim authorization, provisional approval, conditional marketing authorization (“CMA”), and emergency use authorization (“EUA”) from multiple regulatory authorities globally. In addition to COVID-19 and seasonal influenza, our other areas of focus include respiratory syncytial virus (“RSV”) and malaria.

Technology Overview

We believe our recombinant nanoparticle vaccine technology together with our proprietary Matrix-M™ adjuvant is well-suited for the development of vaccine candidates targeting a broad scope of respiratory and other emerging infectious diseases at scale.

Recombinant Nanoparticle Vaccine Technology

Once a pathogenic threat has been identified, the genetic sequence encoding the antigen is selected for subsequent use in developing the vaccine construct. The genetic sequence may be optimized to enhance protein stability or confer resistance to degradation. This genetic construct is inserted into the baculovirus Spodoptera frugiperda (“Sf9/BV”) insect cell-expression system, which enables efficient, large-scale expression of the optimized protein. The Sf9/BV system produces proteins that are properly folded and modified – which can be critical for functional, protective immunity – as the vaccine antigen. Protein antigens are purified and organized around a polysorbate-based nanoparticle core, in a configuration that resembles their native presentation. This results in a highly immunogenic nanoparticle that is ready to be formulated with Matrix-M™ adjuvant.

Matrix-M™ Adjuvant

Our proprietary Matrix-M™ adjuvant has been a key differentiator within our platform. This adjuvant has demonstrated potent, well-tolerated, and durable efficacy by stimulating the entry of antigen presenting cells (“APCs”) into the injection site and enhancing antigen presentation in local lymph nodes. This in turn activates APCs, T-cell and B-cell populations, plasma cells, and high affinity antibodies, thereby boosting immune response. This potent mechanism of action enables a lower dose of antigen required to achieve the desired immune response and we believe thereby contributes to increased vaccine supply and manufacturing capacity. These immune-boosting and dose-sparing capabilities contribute to the adjuvant’s highly unique profile.

NVX-CoV2373 Regulatory and Licensure

We continue to make progress in advancing NVX-CoV2373 toward regulatory approvals. We have received numerous authorizations globally for primary series, and both homologous and heterologous booster indications, which collectively have the potential to reach over six billion individuals. To date, we have received approval, interim authorization, provisional approval, CMA, and EUA for both adult and adolescent populations, and we expect to initiate additional rolling submissions worldwide. We continue to work closely with governments, regulatory authorities, and non-governmental organizations in our commitment to facilitate equitable global access to our COVID-19 vaccine.

For the territories in which our vaccine has gained authorization, NVX-CoV2373 is marketed under the brand names (i) Nuvaxovid™ COVID-19 Vaccine (SARS-CoV-2 rS [Recombinant, adjuvanted]), (ii) Covovax™ (manufacturing and commercialization by the Serum Institute of India Pvt. Ltd. (“SIIPL”)), or (iii) Novavax’ COVID-19 Vaccine, Adjuvanted.

19

Through the date of filing this Quarterly Report, the below is a summary of regulatory authorizations for NVX-CoV2373:

(1)    Regulatory approval received in partnership with SIIPL.

(2)    Regulatory manufacturing and marketing approval received by partner Takeda Pharmaceutical Company Limited (“Takeda”).

During the second quarter of 2022, we completed additional regulatory submissions in major markets for both adult and adolescent populations for primary and booster indications. We are in active discussions with regulatory authorities and remain focused on seeking additional authorizations for NVX-CoV2373.

20

Below is a summary and status of our regulatory submissions completed through the date of filing this Quarterly Report.

(1)    Regulatory filing submitted in partnership with SIIPL.

(2)    Regulatory filing submitted by our partner, SK bioscience, Co., Ltd. (“SK bioscience”).

Clinical Pipeline

Our clinical pipeline encompasses vaccine candidates spanning multiple therapeutic areas including coronavirus, seasonal influenza, RSV, and Matrix-MTM adjuvant collaborations for the prevention of malaria. Our COVID-19 vaccine candidate, NVX-CoV2373, is our leading product, having received approval, interim authorization, provisional approval, CMA, and EUA from multiple regulatory authorities globally. We advanced NVX-CoV2373 through two pivotal Phase 3 clinical trials that demonstrated high efficacy against both the original COVID-19 strain and commonly circulating COVID-19 variants of concern (“VoC”), while maintaining a favorable safety profile. We also advanced our influenza vaccine through a Phase 3 clinical trial, which demonstrated positive top-line results and achieved statistical significance in key secondary endpoints. We initiated a trial of a CIC consisting of our influenza vaccine and NVX-CoV2373. In April 2022, we announced initial results from Phase 1/2 clinical trial of CIC demonstrating that formulating the combination vaccine is well-tolerated and immunogenic. Modeling results showed that combined formulation has the potential to reduce total antigen amount by up to 50% overall, optimizing production and delivery. Additionally, we remain interested in further development of our RSV Program for respiratory syncytial virus fusion (F) protein nanoparticle vaccine candidate (“RSV F Vaccine”). Ongoing Phase 3 trials are being conducted by our partner, Jenner Institute, University of Oxford, for R21, a malaria candidate currently under development by the University of Oxford in partnership with SIIPL, which is formulated using our Matrix-M™ adjuvant.

21

We remain focused on bringing our NVX-CoV2373 vaccine candidate to market following global regulatory authorizations. Through ongoing booster studies in our clinical trials, as well as the development of COVID-19 variant strain vaccine candidates, we continue to collect data to characterize and improve vaccine performance. In April 2022, we announced the initiation of a Phase 3 COVID-19 vaccine booster study in adolescents ages 12-17 years as part of our PREVENT-19 trial, and in May 2022, we announced our participation in University of Oxford’s Com-COV3 booster trial of COVID-19 vaccines in adolescents ages 12-15 years. Additionally, in May 2022, we announced the initiation of a Phase 3 clinical trial for use of our Omicron variant strain vaccine as a booster. We remain in close collaboration with regulatory authorities for providing additional variant data. We expect to leverage these clinical insights to advance the use and additional regulatory approvals of our COVID-19 vaccine for primary, booster, and pediatric indications globally, amidst the ongoing and evolving COVID-19 pandemic.

The pipeline chart below summarizes the core clinical and preclinical development programs that we are focusing on in the near-term.

(1)    Supported by OWS, DoD, CEPI, and BMGF.

(2)    Authorized for provisional approval, CMA, or EUA in select geographies under trade names NuvaxovidTM and CovovaxTM. Received EUA from the U.S. FDA. PREVENT-19, a Phase 3 clinical trial in the U.S. and Mexico; Ongoing PREVENT-19 pediatric expansion in the U.S.; Phase 3 clinical trial in the UK; Ongoing Phase 2b clinical trial in South Africa. We, along with our partners, will have commercial rights in authorized geographies to sell and distribute NVX-CoV2373.

Business Highlights

Second Quarter 2022 and Recent Highlights

Progressed COVID-19 Global Regulatory Strategy

•Received EUA from U.S. FDA with label expansion underway, marking first protein-based COVID-19 vaccine available for use domestically

◦Authorized for primary series in adults 18 and older with unanimous recommendation received from U.S Centers for Disease Control and Prevention (“CDC”)

◦Planned submission for boosting data from PREVENT-19 Phase 3 trial in August of 2022

•Nuvaxovid or Covovax authorized in 43 countries for primary series in adults 18 and older, with additional label expansions received and underway in several geographies

◦Authorized for boosting in adults 18 and older in Japan, Australia and New Zealand

▪Nuvaxovid filings completed in the European Union (“EU”), Great Britain and Switzerland

◦Authorized for primary series in adolescents aged 12 through 17 in the EU, India, Australia, Japan and Thailand

▪Nuvaxovid filings completed to the WHO, Great Britain, Canada, Switzerland, New Zealand and Taiwan

22

•Expect to file for authorization of Omicron-containing vaccine with U.S. FDA in the fourth quarter of 2022

COVID-19 Vaccine Manufacturing and Distribution

•Delivered over 73 million doses of Nuvaxovid and Covovax globally to date, including 23 million doses since the start of the third quarter 2022, reflecting strong momentum for the remainder of 2022

•Secured order from U.S government for 3.2 million initial doses under existing agreements, with distribution underway

•Received approval from EMA for SK bioscience to manufacture and supply the active substance in the Nuvaxovid COVID-19 vaccine to the EU

•Expanded partnership with SK bioscience to support manufacturing of Omicron-containing vaccine and to manufacture vaccine in prefilled syringes for commercial supply in 2023

COVID-19 Clinical Development Program

•Ongoing development of Omicron BA.1 specific vaccine (“NVX-CoV2515”), Omicron BA.5 specific vaccine and bivalent format with prototype vaccine (“NVX-CoV2373”)

◦Announced positive preclinical boosting data for NVX-CoV2373, NVX-CoV2515, or bivalent formulation, demonstrating strong antibody levels

◦Ongoing Phase 3 strain change trial to assess safety and antibody responses following primary vaccination with mRNA vaccines; initial results expected near the end of the third quarter of 2022

•Initiated Phase 2b/3 Hummingbird global clinical trial in younger children aged six months through 11 years with initial results expected in the first quarter of 2023

◦Expected to enroll total 3,600 participants across nine countries, evaluating safety, effectiveness (immunogenicity) and efficacy of two doses of NVX-CoV2373, followed by a booster at least six months after primary vaccination in three age cohorts

•Advanced multiple studies evaluating homologous and heterologous boosting in adolescents for NVX-CoV2373

◦Completed administration of homologous third-dose booster for select participants in PREVENT-19 Phase 3 booster study in adolescents aged 12 through 17

◦Ongoing participation in University of Oxford’s Com-COV3 Booster trial in adolescents aged 12 through 15 to evaluate heterologous boosting

COVID-19-Influenza Combination (CIC) Vaccine Candidate Clinical Development

•Announced initial results of CIC Phase 1/2 trial demonstrating robust immune response with both stand-alone influenza and CIC vaccine candidates

◦Phase 3 trial to evaluate efficacy on-track to be initiated in 2023

Sales of Common Stock

During the three months ended March 31, 2022, we sold 2.2 million of shares of our common stock resulting in net proceeds of approximately $179 million, under our most recent At Market Issuance Sales agreement entered in June 2021 (the “June 2021 Sales Agreement”), which allows us to issue and sell up to $500 million in gross proceeds of shares of our common stock. As of June 30, 2022, the remaining balance under our June 2021 Sales Agreement was approximately $318 million.

During the six months ended June 30, 2021, we sold 2.6 million shares of our common stock resulting in net proceeds of approximately $565 million, under our various At Market Issuance Sales agreements then in effect.

Critical Accounting Policies and Use of Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements (unaudited) and the accompanying notes, which have been prepared in accordance with generally accepted accounting principles in the United States.

23

The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Our critical accounting policies and estimates are included under Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC, and are updated for inventory valuation below.

Inventory Valuation

We periodically analyze our inventories for excess amounts or obsolescence and write down obsolete or otherwise unmarketable inventory to its estimated net realizable value based on assumptions about expected future demand and market conditions. Our assumptions about expected future demand are inherently uncertain and if we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of inventory write down that we report in a particular period. Expense incurred related to excess inventory and obsolete inventory is recorded as a component of cost of sales in the consolidated statement of operations.

Recent Accounting Pronouncements Not Yet Adopted

See “Note 2―Summary of Significant Accounting Policies” included in our Notes to Consolidated Financial Statements (under the caption “Recent Accounting Pronouncements”).

Results of Operations

The following is a discussion of the historical financial condition and results of our operations that should be read in conjunction with the unaudited consolidated financial statements and notes set forth in this Quarterly Report.

Three Months Ended June 30, 2022 and 2021

Revenue

	Three Months Ended June 30,
	2022		2021		Change
Revenue (in thousands):
Product sales	$	55,455	$	—	$	55,455
Grants	107,774		272,489		(164,715)
Royalties and other	22,696		25,528		(2,832)
Total revenue	$	185,925	$	298,017	$	(112,092)

Revenue for the three months ended June 30, 2022 was $185.9 million as compared to $298.0 million for the same period in 2021, a decrease of $112.1 million. Revenue for the three months ended June 30, 2022 was primarily comprised of revenue for services performed under the agreement with the U.S. government partnership formerly known as OWS (“OWS Agreement”) and revenue from product sales of NVX-CoV2373. Revenue for the three months ended June 30, 2021 was primarily comprised of revenue for services performed under the OWS Agreement and our funding agreements with CEPI. The decrease in revenue was due to decreased development activities under the OWS Agreement as we began commercial sales of NVX-CoV2373, partially offset by an increase in revenue due to the commencement of product sales of NVX-CoV2373.

We expect revenue in 2022 to significantly increase as compared to 2021 due to product sales of NVX-CoV2373 under various supply agreements, sometimes referred to as advance purchase agreements (“APAs”), as a result of multiple global regulatory approvals. Certain revenue from product sales of NVX-CoV2373 that was originally planned for the three months ended June 30, 2022 is now planned for the second half of 2022 based on requested and revised customer delivery plans. Revenue in 2022 is also expected to increase due to royalties from the sale of NVX-CoV2373 under our supply and license agreements with strategic partners to supply NVX-CoV2373 in their specified territories where we are entitled to receive royalties from such sales, and our NVX-CoV2373 program, which we anticipate will continue to be funded by OWS and other revenue sources.

24

Expenses

	Three Months Ended June 30,
	2022		2021		Change
Expenses (in thousands):
Cost of sales	$	271,077	—		$	271,077
Research and development	289,648		570,685		(281,037)
Selling, general, and administrative	108,160		73,161		34,999
Total expenses	$	668,885	$	643,846	$	25,039

Cost of Sales

Cost of sales was $271.1 million, or 489% of product sales, for the three months ended June 30, 2022, including expense of $255.3 million related to excess, obsolete, or expired inventory and losses on firm purchase commitments. Prior to receiving regulatory approval, we expensed manufacturing costs as research and development expenses. After receiving regulatory approval, we capitalize the costs of production for a particular supply chain when we determine that we have a present right to the economic benefit associated with the product. While we tracked the quantities of our manufactured vaccine product and components, we did not track pre-approval manufacturing costs and therefore the manufacturing cost of our pre-launch inventory produced prior to approval is not reasonably determinable. However, based on our expectations for future manufacturing costs to produce our vaccine product and components inventory, we estimate at June 30, 2022 we had approximately $0.3 billion of commercial inventory that was expensed prior to approval. We expect to utilize all of our reduced-cost inventory during 2022. If inventory sold for the three months ended June 30, 2022 was valued at expected standard cost, including expenses related to excess and obsolete inventory, adjusted cost of sales for the period would have been approximately $279.5 million, or 504% of product sales, an adjustment of $8.4 million as compared to cost of sales recognized. The cost of sales to high income countries is expected to be between 15% and 30% of product sales based on our standard cost. The cost of sales as a percentage of product sales may fluctuate in the future as a result of changes to our customer mix or standard costs.

Research and Development Expenses

Research and development expenses decreased to $289.6 million for the three months ended June 30, 2022 as compared to $570.7 million for the three months ended June 30, 2021, a decrease of $281.0 million primarily due to research and development of NVX-CoV2373, as summarized in the table below (in thousands):

	Three Months Ended June 30,
	2022		2021
NVX-CoV2373	$	201,015	$	497,196
Influenza vaccine	2,274		3,168
Other vaccine development programs	224		210
Total direct external research and development expense	203,513		500,574
Employee expenses	43,177		24,556
Stock-based compensation expense	19,695		24,779
Facility expenses	10,863		3,410
Other expenses	12,400		17,366
Total research and development expenses	$	289,648	$	570,685

Research and development expenses for NVX-CoV2373 for the three months ended June 30, 2022 and 2021, included a benefit of $87.2 million related to previously accelerated manufacturing costs and an expense of $20.0 million related to the acceleration of manufacturing costs, respectively, for leases that we determined were embedded in multiple manufacturing supply agreements with Contract Manufacturing Organizations (“CMOs”) and contract manufacturing and development organizations (“CDMOs”). For 2022, we expect total research and development expenses to decrease as compared to 2021. The decline in 2022 is anticipated to result from expected capitalization of manufacturing costs during 2022 that were previously recognized as research and development expenses in prior periods, partially offset by research and development expenses related to increased clinical activities as we continue to develop our NVX-CoV2373 and other programs.

25

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased to $108.2 million for the three months ended June 30, 2022 from $73.2 million for the same period in 2021, an increase of $35.0 million. The increase in selling, general, and administrative expenses is primarily due to an increase in professional fees in support of our NVX-CoV2373 program. For 2022, we expect selling, general, and administrative expenses to increase significantly as compared to 2021 due to increased activities related to supporting our NVX-CoV2373 program and increases in employee-related costs and professional fees.

Other Income (Expense)

	Three Months Ended June 30,
	2022		2021		Change
Other Income (Expense) (in thousands):
Interest expense	$	(6,234)	$	(5,968)	$	(266)
Other income (expense)	(19,873)		3,028		(22,901)
Total other expense, net	$	(26,107)	$	(2,940)	$	(23,167)

We had total other expense, net, of $26.1 million for the three months ended June 30, 2022 as compared to $2.9 million for the same period in 2021. During the three months ended June 30, 2022 and 2021, other income (expense) included a loss of $20.1 million and $2.7 million, respectively, incurred by our foreign subsidiaries, primarily related to the impact of foreign exchange rate differences on an intercompany loan with Novavax CZ.

Income Tax Expense

During the three months ended June 30, 2022 and 2021, we recognized $1.4 million and $3.5 million, respectively, of income tax expense related to federal and state income taxes and foreign withholding tax on royalties.

Net Loss

	Three Months Ended June 30,
	2022		2021		Change
Net Loss (in thousands, except per share information):
Net loss	$	(510,485)	$	(352,317)	$	(158,168)
Net loss per share, basic	$	(6.53)	$	(4.75)	$	(1.78)
Weighted average shares outstanding, basic	78,143		74,118		4,025

Net loss for the three months ended June 30, 2022 was $510.5 million, or $6.53 per share, basic, as compared to a net loss of $352.3 million, or $4.75 per share, basic, for the same period in 2021. The change in net loss during the three months ended June 30, 2022, was primarily due to decreased revenue under the OWS Agreement and the write-down of excess, obsolete, or expired inventory and losses on firm purchase commitments, partially offset by revenue from commercial sales of NVX-CoV2373 and a decrease in research and development expense.

The increase in weighted average shares outstanding for the three months ended June 30, 2022 is primarily a result of sales of our common stock and exercises of stock-based awards in 2022 and 2021.

26

Six Months Ended June 30, 2022 and 2021

Revenue

	Six Months Ended June 30,
	2022		2021		Change
Revenue (in thousands):
Product sales	$	641,083	$	—	$	641,083
Grants	207,075		719,382		(512,307)
Royalties and other	41,738		25,864		15,874
Total revenue	$	889,896	$	745,246	$	144,650

Revenue for the six months ended June 30, 2022 was $889.9 million as compared to $745.2 million for the same period in 2021, an increase of $144.7 million. Revenue for the six months ended June 30, 2022 was primarily comprised of revenue from product sales of NVX-CoV2373 and, to a lesser extent, revenue for services performed under the OWS Agreement. Revenue for the six months ended June 30, 2021 was primarily comprised of revenue for services performed under the OWS Agreement and our funding agreements with CEPI. The increase in revenue was due to the commencement of product sales of NVX-CoV2373 and, to a lesser extent, royalties under our licensing arrangements, partially offset by decreased development activities under the OWS Agreement and our funding agreements with CEPI as we began commercial sales of NVX-CoV2373.

Expenses

	Six Months Ended June 30,
	2022		2021		Change
Expenses (in thousands):
Cost of sales	$	286,281	$	—	$	286,281
Research and development	673,131		1,163,356		(490,225)
Selling, general, and administrative	204,152		136,351		67,801
Total expenses	$	1,163,564	$	1,299,707	$	(136,143)

Cost of Sales

Cost of sales was $286.3 million, or 45% of product sales, for the six months ended June 30, 2022, including expense of $255.3 million related to excess, obsolete, or expired inventory and losses on firm purchase commitments. Prior to receiving approval, we expensed manufacturing costs as research and development expenses. After receiving approval, we capitalize the costs of production for a particular supply chain when we determine that we have a present right to the economic benefit associated with the product. While we tracked the quantities of our manufactured vaccine product and components, we did not track pre-approval manufacturing costs and therefore the manufacturing cost of our pre-launch inventory produced prior to approval is not reasonably determinable. However, based on our expectations for future manufacturing costs to produce our vaccine product and components inventory, we estimate at June 30, 2022 we had approximately $0.3 billion of commercial inventory that was expensed prior to approval. We expect to utilize all of our reduced-cost inventory during 2022. If inventory sold for the six months ended June 30, 2022 was valued at expected standard cost, adjusted cost of sales for the period would have been approximately $439.5 million, or 69% of product sales, an adjustment of $153.2 million as compared to cost of sales recognized. The cost of sales to high income countries is expected to be between 15% and 30% of product sales based on our standard cost. The cost of sales as a percentage of product sales may fluctuate in the future as a result of changes to our customer mix or standard costs.

27

Research and Development Expenses

Research and development expenses decreased to $673.1 million for the six months ended June 30, 2022 from $1.2 billion for the same period in 2021, a decrease of $490.2 million, primarily due to decreased development activities relating to NVX-CoV2373, as summarized in the table below (in thousands):

	Six Months Ended June 30,
	2022		2021
NVX-CoV2373	$	489,948	$	1,035,320
Influenza vaccine	3,570		4,294
Other vaccine development programs	1,027		514
Total direct external research and development expense	494,545		1,040,128
Employee expenses	86,919		49,511
Stock-based compensation expense	36,582		48,569
Facility expenses	24,072		6,405
Other expenses	31,013		18,743
Total research and development expenses	$	673,131	$	1,163,356

Research and development expenses for NVX-CoV2373 for the six months ended June 30, 2022 and 2021, included a benefit of $67.4 million related to previously accelerated manufacturing costs and an expense of $43.0 million related to the acceleration of manufacturing costs, respectively, for leases that we determined were embedded in multiple manufacturing supply agreements with CMOs and CDMOs.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased to $204.2 million for the six months ended June 30, 2022 from $136.4 million for the same period in 2021, an increase of $67.8 million. The increase in selling, general, and administrative expenses is primarily due to an increase in professional fees in support of our NVX-CoV2373 program.

Other Expense

	Six Months Ended June 30,
	2022		2021		Change
Other Expense (in thousands):
Interest expense	$	(11,110)	$	(10,807)	$	(303)
Other income (expense)	(18,219)		(3,203)		(15,016)
Total other expense, net	$	(29,329)	$	(14,010)	$	(15,319)

We had total other expense, net of $29.3 million for the six months ended June 30, 2022 as compared to $14.0 million for the same period in 2021. In the six months ended June 30, 2022 and 2021, we also recorded interest expense of $3.4 million and $4.0 million, respectively, for finance leases. During the six months ended June 30, 2022 and 2021, other income (expense) included a loss of $21.5 million and $3.9 million, respectively, incurred by our foreign subsidiaries, primarily related to the impact of foreign exchange rate differences on an intercompany loan with Novavax CZ.

Income Tax Expense

During the six months ended June 30, 2022 and 2021, we recognized $4.1 million and $6.6 million, respectively, of income tax expense related to federal and state income taxes and foreign withholding tax on royalties.

28

Net Loss

	Six Months Ended June 30,
	2022		2021		Change
Net Loss (in thousands, except per share information):
Net loss	$	(307,077)	$	(575,036)	$	267,959
Net loss per share, basic	$	(3.97)	$	(7.82)	$	3.85
Weighted average shares outstanding, basic	77,305		73,580		3,725

Net loss for the six months ended June 30, 2022 was $307.1 million, or $3.97 per share, as compared to $575.0 million, or $7.82 per share, for the same period in 2021. The change in net loss during the six months ended June 30, 2022 was primarily due to the commencement of commercial sales of NVX-CoV2373, partially offset by decreased revenue under the OWS Agreement, and a decrease in research and development expense, partially offset by the write-down of excess, obsolete, or expired inventory and losses on firm purchase commitments.

The increase in weighted average shares outstanding for the six months ended June 30, 2022 is primarily a result of sales of our common stock in 2022 and 2021.

Liquidity Matters and Capital Resources

Our future capital requirements depend on numerous factors including, but not limited to, revenue from our product sales and royalties under licensing arrangements with our strategic partners; funding under our grant agreements; our projected activities related to the development and commercial support of NVX-CoV2373 and variant candidates, including significant commitments under various CRO, CMO, and CDMO agreements; the progress of preclinical studies and clinical trials; the time and costs involved in obtaining regulatory approvals; the costs of filing, prosecuting, defending, and enforcing patent claims and other intellectual property rights; and other manufacturing, sales, and distribution costs. We plan to continue developing other vaccines and product candidates, such as our influenza vaccine candidate and potential combination vaccines candidates, which are in various stages of development.

We have entered into supply agreements, sometimes referred to as APAs, with Gavi, the Vaccine Alliance (“Gavi”); the European Commission (“EC”); and various countries globally. We also have grant and license agreements. As of June 30, 2022, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties under the license agreements, was approximately $5 billion. The timing to fulfill performance obligations related to grant agreements will depend on the results of our research and development activities, including clinical trials, and delivery of doses. The timing to fulfill performance obligations related to supply agreements 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 under certain of our APAs. The supply agreements typically contain terms that include upfront payments intended to assist us in funding investments related to building out and operating our manufacturing and distribution network, among other expenses, in support of our global supply commitment, and are applied to billings upon delivery of NVX-CoV2373. Such upfront payments under our supply agreements generally become non-refundable upon our achievement of certain development, regulatory, and commercial milestones. Failure to meet regulatory milestones, product volume, or delivery timing obligations under our supply agreements may require us to refund portions of upfront payments or result in reduced future payments, which could result in a material and adverse effect on our financial condition. In addition, we continue to assess our manufacturing needs and intend to modify our global manufacturing footprint consistent with our contractual obligations to supply, and anticipated demand for, NVX-CoV2373, and in doing so recognize that significant costs may be incurred.

Under the terms of our contracted supply commitment with Gavi, which includes the supply obligation of our licensed partner, SIIPL, 1.1 billion doses of NVX-CoV2373 are to be made available to countries participating in the COVAX Facility, which was established to allocate and distribute vaccines equitably to participating countries and economies. The Novavax portion is a supply agreement that contemplates that we will manufacture and distribute 350 million doses. Under that agreement with Gavi, we received an upfront payment of $350 million from Gavi in 2021 and an additional payment of $350 million in the first quarter of 2022 related to our achieving WHO Emergency Use Listing. Although Novavax is prepared to deliver the quantities of NVX-CoV2373 doses to Gavi under the terms of our supply agreement, we were notified by Gavi of its intent to seek to revise the number and timing of doses of NVX-CoV2373 supplied by Novavax under such agreement. Furthermore, Gavi may seek partial or full recovery of the prior nonrefundable payments it has made to Novavax. Our position is that Gavi has no contractual right to recover prior nonrefundable payments. To date, Novavax has not received an order from Gavi and the timing and quantities of future orders to deliver NVX-CoV2373 to the COVAX facility are unclear.

29

In July 2022, we entered into an Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (the “Amended and Restated UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement originally entered into in October 2020 (the “Original UK Supply Agreement”). Pursuant to the Original UK Supply Agreement, the Authority agreed to purchase 60 million doses of NVX-CoV2373. Under the Amended and Restated UK Supply Agreement, the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses of NVX-CoV2373, with the number of additional doses contingent on our timely achievement of supportive recommendations from the United Kingdom’s Joint Committee on Vaccination and Immunisation (the “JCVI”). In the event that we are unable to achieve the JCVI supportive recommendations, we may have to repay up to $225.0 million related to the upfront payment we received from the Authority under the Original UK Supply Agreement. Under the Amended and Restated UK Supply Agreement, the Authority also has the option to purchase up to an additional 44 million doses, in one or more tranches, through 2024.

We have an APA with the EC acting on behalf of various EU member states to supply a minimum of 20 million and up to 100 million initial doses of NVX-CoV2373, with the option for the Commission to purchase an additional 100 million doses up to a maximum aggregate of 200 million doses in one or more tranches, through 2023. We are in the process of finalizing a revised delivery schedule for the remaining 42 million doses of the 70 million previously committed doses under our APA with the EC that were originally scheduled for delivery during the first and second quarters of 2022. In July and August 2022, we were notified by the EC that it was cancelling 5 million doses of its prior commitment originally scheduled for delivery in the first and second quarters of 2022, in accordance with the APA, and reducing the order to 65 million doses.

In July 2022, we entered into a modification to the OWS Agreement that amended the terms of such agreement to provide for (i) an initial delivery to the U.S. government of approximately 3 million doses of NVX-CoV2373, contingent on the timing of EUA approval by the FDA, as well as the timing of label language and artwork approvals by the FDA and the recommendation of the Advisory Committee on Immunization Practices within the CDC, and (ii) any additional manufacture and delivery to the U.S. government up to an aggregate of 100 million doses of NVX-CoV2373 contemplated by the original OWS Agreement (inclusive of the initial batch of approximately 3 million doses) dependent on U.S. government demand, FDA guidance on strain selection, agreement between the parties on the price of such doses, and available funding. Additionally, in July 2022, we entered into a modification to our existing agreement with the DoD that amended the terms of such agreement to provide for the initial delivery of 0.2 million doses of NVX-CoV2373 after receipt of EUA approval from the FDA, with delivery of the remaining 9.8 million doses of NVX-CoV2373 contemplated by the original agreement subject to DoD demand and available funding.

In the six months ended June 30, 2022, we primarily funded our operations with cash and cash equivalents, upfront payments under APAs, revenue from product sales, royalties under licensing arrangements with our strategic partners, and proceeds from the sale of common stock together with revenue under the OWS Agreement that supports our NVX-CoV2373 vaccine development activities. We anticipate our future operations to be funded by revenue from product sales, royalties under licensing arrangements with our strategic partners, revenue under our OWS Agreement, our cash and cash equivalents, and other potential funding sources.

As of June 30, 2022, we had $1.4 billion in cash and cash equivalents and restricted cash as compared to $1.5 billion as of December 31, 2021.

The following table summarizes cash flows for the six months ended June 30, 2022 and 2021 (in thousands):

	Six Months Ended June 30,
	2022		2021		Change
Net cash provided by (used in):
Operating activities	$	(259,413)	807,497		$	(1,066,910)
Investing activities	(41,402)		128,708		(170,110)
Financing activities	164,524		538,144		(373,620)
Effect on exchange rate on cash, cash equivalents, and restricted cash	(4,453)		(348)		(4,105)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(140,744)		1,474,001		(1,614,745)
Cash, cash equivalents, and restricted cash at beginning of period	1,528,259		648,738		879,521
Cash, cash equivalents, and restricted cash at end of period	$	1,387,515	$	2,122,739	$	(735,224)

30

Net cash used in operating activities was $259.4 million for the six months ended June 30, 2022, as compared to net cash provided by operating activities of $807.5 million for the same period in 2021. The decrease in cash provided is primarily due to the application of upfront payments under APAs resulting from sales of NVX-CoV2373 during the six months ended June 30, 2022 as compared to an increase in cash due to the receipt of upfront payments under APAs during the six months ended June 30, 2021.

During the six months ended June 30, 2022 and 2021, our investing activities consisted primarily of capital expenditures and maturities and sale of marketable securities, net of purchases. Capital expenditures for the six months ended June 30, 2022 and 2021 were $41.4 million and $28.9 million, respectively. For 2022, we expect our capital expenditures to continue to increase due to further development activities for our NVX-CoV2373 program, including the additional build-out of research and development and manufacturing facilities and related equipment, and the build-out of our new corporate office facility.

Our financing activities consisted primarily of sales of our common stock under our At Market Issuance Sales Agreements, payments of finance lease liabilities, and exercise of stock-based awards. In the six months ended June 30, 2022 and 2021, we received net proceeds of approximately $179 million and $565 million, respectively, from selling shares of common stock through our At Market Issuance Sales Agreements.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

We are subject to certain risks that may affect our results of operations, cash flows, and fair values of assets and liabilities, including volatility in foreign currency exchange rates and interest rate movements.

Foreign Currency Exchange Risk

Although we are headquartered in the U.S., our results of operations, including our foreign subsidiaries’ operations, are subject to foreign currency exchange rate fluctuations, primarily the U.S. dollar against the Euro, Pound Sterling, Swedish Krona, and Czech Koruna. This exchange exposure may have a material effect on our cash flow and results of operations, particularly in cases of revenue generated under APAs that include provisions that impact our and our counterparty’s currency exchange exposure. To date, we have not entered into any foreign currency hedging contracts, although we may do so in the future.

We also face foreign currency exchange exposure that arises from translating the results of our global operations to the U.S. dollar at exchange rates that have fluctuated from the beginning of the period. While the financial results of our global activities are reported in U.S. dollars, the functional currency of our foreign subsidiaries is their respective local currency. Fluctuations in the foreign currency exchange rates of the countries in which we do business will affect our operating results, often in ways that are difficult to predict. A 10% decline in the foreign exchange rates (primarily against the U.S. dollar) relating to our foreign consolidated subsidiaries would result in a decline of stockholders’ equity of approximately $24 million as of June 30, 2022.

Market and Interest Rate Risk

The primary objective of our investment activities is preservation of capital, with the secondary objective of maximizing income.

Our exposure to market risk is primarily confined to our investment portfolio, which historically has been classified as available-for-sale. We do not believe that a change in the market rates of interest would have any significant impact on the realizable value of our investment portfolio. Changes in interest rates may affect the investment income we earn on our marketable securities when they mature and the proceeds are reinvested into new marketable securities and, therefore, could impact our cash flows and results of operations.

Interest and dividend income is recorded when earned and included in investment income. Premiums and discounts, if any, on marketable securities are amortized or accreted to maturity and included in investment income. The specific identification method is used in computing realized gains and losses on the sale of our securities.

Our Notes have a fixed interest rate, and we have no additional material debt. As such, we do not believe that we are exposed to any material interest rate risk as a result of our borrowing activities.

31

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the assistance of our chief executive officer and chief financial officer, has reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of June 30, 2022. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving such control objectives. Based on the evaluation of our disclosure controls and procedures as of June 30, 2022, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

Our management, including our chief executive officer and chief financial officer, have evaluated changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2022, and have concluded that there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

Stockholder Litigation

On November 12, 2021, Sothinathan Sinnathurai filed a purported securities class action in the U.S. District Court for the District of Maryland against Novavax 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 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 vaccine’s regulatory approval. The amended complaint defines the purported class as those stockholders who purchased Novavax securities between February 24, 2021 and October 19, 2021. On April 25, 2022, defendants filed a motion to dismiss the consolidated amended complaint. On June 9, 2022, the co-lead plaintiffs filed an opposition to the motion to dismiss and on July 11, 2022, the Company filed a reply brief. The matter is now fully briefed. The Court has not indicated whether it intends to schedule any hearing on the motion before issuing a ruling.

After the Sinnathurai Action was filed, five derivative lawsuits were filed: Robert E. Meyer v. Stanley C. Erck, et al., No. 8:21-cv-02996-TDC (the “Meyer Action”), Shui Shing Yung v. Stanley C. Erck, et al., No. 8:21-cv-03248-TDC (the “Yung Action”), William Kirst, et al. v. Stanley C. Erck, et al., No. 8:22-cv-00024-TDC (the “Kirst Action”), Amy Snyder v. Stanley C. Erck, et al., No. 8:22-cv-01415-TDC (the “Snyder Action”), and Charles R. Blackburn, et al. v. Stanley C. Erck, et al., No. 1:22-cv-01417-TDC (the “Blackburn Action”). The Meyer, Yung, Snyder, and Blackburn Actions were filed in the U.S. District Court for the District of Maryland. The Kirst Action was filed in the Circuit Court for Montgomery County, Maryland, and shortly thereafter removed to the U.S. District Court for the District of Maryland by the defendants. The derivative lawsuits name members of the board of directors and certain members of senior management as defendants. Novavax 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.

32

On July 21, 2022, the Court issued a memorandum opinion and order remanding the Kirst Action to state court. On February 4, 2022, the Court entered an order consolidating the Meyer and Yung Actions (the “Consolidated Derivative Action”). The plaintiffs in the Consolidated Derivative Action filed their consolidated derivative complaint on April 25, 2022. On May 10, 2022, the Court entered an order in the Consolidated Derivative Action 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. If a related derivative action is filed and is not stayed, the Meyer and Yung plaintiffs may seek to terminate the stay. On June 10, 2022, the Snyder and Blackburn Actions were filed. The Snyder and Blackburn plaintiffs have expressed their intent to move the court to consolidate all of the derivative actions pending in Maryland federal court and to appoint lead counsel. On July 21, 2022, the Court ordered the parties in the Consolidated Derivative Action, the Snyder Action, and the Blackburn Action to meet and confer concerning consolidation, the appointment of lead counsel, and the ongoing stay of proceedings in the Consolidated Derivative Action. Should the parties fail to reach agreement on those issues, the Snyder and Blackburn plaintiffs were granted leave to file a motion for consolidation and appointment of lead counsel by August 18, 2022.

Par Sterile Products, LLC Arbitration

On March 29, 2022, Par Sterile Products, LLC (“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 (“MSA”) that the Company entered into with Par in September 2020 to provide fill-finish manufacturing services for NVX-CoV2373. The matter is at a preliminary stage and therefore the potential loss is not reasonably estimable. While the Company maintains that no breach of the MSA has occurred and intends to vigorously defend the matter, if the final resolution of the matter is adverse to the Company, it could have a material impact on the Company's financial position, results of operations, or cash flows.

General

We are 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, we do not expect the resolution of these other legal proceedings to have a material adverse effect on our financial position, results of operations, or cash flows.

Item 1A.    Risk Factors

Information regarding risk and uncertainties related to our business appears in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on March 1, 2022. There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K other than set forth below.

The emergence and transmissibility of variants of the SARS-CoV-2 virus may affect market acceptance or sales of NVX-CoV2373, and our strategy to develop versions of our COVID-19 vaccine to protect against certain variants may not be successful.

Our prototype COVID-19 vaccine, NVX-CoV2373, was developed based upon the genetic sequence of the SARS-CoV-2 virus that was first discovered in December 2019. As the SARS-CoV-2 virus continues to evolve, new strains of the virus, or those that are already in circulation, may prove more transmissible or cause more severe forms of COVID-19 disease than the predominant strains to date. For example, the Omicron and Delta variants have been observed to be more transmissible, or contagious, than previous variants. NVX-CoV2373 may not be as effective in protecting against these or other future variant strains, and NVX-CoV2373 may fail to achieve market acceptance or significant sales, despite gaining regulatory approval, provisional registration, conditional marketing authorization or emergency use authorization in a number of jurisdictions, including emergency use authorization the United States, as demand for variant-specific vaccines increases. We have several variant-specific vaccine candidates in development, including for Omicron subvariants, and bivalent formulations with NVX-CoV2373, and may develop others in the future. However, if these efforts are unsuccessful, we are slower to develop variant-specific vaccines than competitors, or these vaccine candidates prove less effective than competitors’ vaccines, these shortcomings may lead to reputational harm, loss of market share, and adverse financial results. Additionally, counterparties to certain of our existing APAs may request variant-specific vaccines in place of NVX-CoV2373 and, depending on when we are able to offer variant-specific vaccines, if at all, such counterparties may seek to delay, reduce or otherwise renegotiate their purchase commitments, which may adversely impact our ability to realize the full financial benefit of such APAs. In addition, we may expend significant resources adapting NVX-CoV2373 or conducting clinical trials to protect against variants of the SARS-CoV-2 virus, but a market for this adapted vaccine may not develop and demand may not align with our projections or cost expenditures.

33

Item 5.    Other Information

On July 1, 2022, Novavax, Inc. (the “Company”) entered into an Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (the “Amended and Restated UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020, between the parties (the “Original UK Supply Agreement”). Under the Original UK Supply Agreement, the Authority agreed to purchase 60 million doses of the Company’s vaccine candidate for the SARS-CoV-2 virus (the “Vaccine”) and made an upfront payment to the Company.

Under the Amended and Restated UK Supply Agreement, the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses of Vaccine, with the number of additional doses contingent on, and subject to reduction based on, the Company’s timely achievement of a supportive recommendation from the Joint Committee on Vaccination and Immunisation (the “JCVI”) that is approved by the UK Secretary of State for Health, with respect to use of Vaccine for (i) the general adult population as part of a SARS-CoV-2 vaccine booster campaign in the United Kingdom (“UK”) or (ii) the general adolescent population as part of a SARS-CoV-2 vaccine booster campaign in the UK or as a primary series SARS-CoV-2 vaccination, excluding where that recommendation relates only to one or more population groups comprising less than one million members in the UK. If the Authority does not purchase the additional 15 million doses of Vaccine or the number of such additional doses of Vaccine is reduced, the Company would have to repay a portion of the upfront payment previously received from the Authority. Under the Amended and Restated UK Supply Agreement, the Authority also has the option to purchase up to an additional 44 million doses, in one or more tranches, through 2024.

The foregoing description of the material terms of the Amended and Restated UK Supply Agreement does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated UK Supply Agreement, which the Company intends to file with the Securities and Exchange Commission as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2022.

34

Item 6.    Exhibits

3.1	Second Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015 (File No. 000-26770))
3.2	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 9, 2019 (File No. 000-26770))
3.3	Amended and Restated By-Laws of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on June 24, 2021 (File No. 000-26770))
3.4	Certificate of Designation of Series A Convertible Preferred Stock of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed June 19, 2020 (File No. 000-26770))
10.1	Amended and Restated Novavax, Inc. 2015 Stock Incentive Plan (Incorporated by reference to Appendix C of the Registrant’s Definitive Proxy Statement filed on May 2, 2022 in connection with the Annual Meeting held on June 16, 2022 (File No. 000-26770))
10.2	Amended and Restated Novavax, Inc. 2013 Employee Stock Purchase Plan (Incorporated by reference to Appendix D of the Registrant’s Definitive Proxy Statement filed on May 2, 2022 in connection with the Annual Meeting held on June 16, 2022 (File No. 000-26770))
10.3*±	Contract Development Manufacture Agreement, dated October 21, 2021, between Novavax, Inc. and Serum Life Sciences Limited
10.4*±	Amendment No. 1 to the Contract Development Manufacture Agreement, between Novavax, Inc. and Serum Life Sciences Limited, executed as of April 29, 2022.
10.5*±	Statement of Work No. 1 to the Contract Development Manufacture Agreement, effective as of April 29, 2022, between Novavax Inc. and Serum Life Sciences Limited
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) the Consolidated Statements of Operations for the three- and six-month periods ended June 30, 2022 and 2021, (ii) the Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021, (iii) the Consolidated Statements of Comprehensive Income (Loss) for the three- and six-month periods ended June 30, 2022 and 2021, (iv) the Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three- and six-month periods ended June 30, 2022 and 2021, (v) the Consolidated Statements of Cash Flows for the three- and six-month periods ended June 30, 2022 and 2021, and (vi) the Notes to Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

___________________________________

*Filed or furnished herewith.

±    Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

35

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NOVAVAX, INC.
Date: August 8, 2022	By:	/s/ Stanley C. Erck
		Stanley C. Erck President and Chief Executive Officer (Principal Executive Officer)
Date: August 8, 2022	By:	/s/ James P. Kelly
		James P. Kelly Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

36

EX-10.3

Exhibit 10.3

CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

CONTRACT DEVELOPMENT MANUFACTURE AGREEMENT

Between

Serum Life Sciences Limited

and

Novavax, Inc.

Dated October 21, 2021

1

CONTRACT DEVELOPMENT MANUFACTURE AGREEMENT

This CONTRACT DEVELOPMENT MANUFACTURE AGREEMENT (“Agreement”) is entered into as of October 21, 2021 (“Effective Date”) by and between Novavax, Inc., a Delaware USA corporation having a place of business at 21 Firstfield Rd., Gaithersburg, MD 20878 (“Novavax”) and Serum Life Sciences Limited, a company duly incorporated having its registered office situated in England and Wales, formerly known as Covicure Holdings Limited having its principal office at 12 New Fetter Lane, London, United Kingdom, EC4A 1JP (“SLS”). Novavax and SLS may, from time to time, be individually referred to as a “Party” and collectively referred to as the “Parties.”

RECITALS

Whereas, Novavax is developing vaccine product candidates comprised of (i) its proprietary antigens, including, but not limited to, its BV2373 and BV2438 antigens targeting SARS-CoV-2 (each an “Antigen”) and (ii) its Matrix-M™ adjuvant (“Adjuvant”) and is seeking to engage a manufacturer to supply commercial quantities of Drug Product(s) (as defined below); and

Whereas, SLS is engaged in the business of supply, distribution and marketing of vaccine products, life-saving drugs and other pharmaceutical products at commercial scale; and

Whereas, Novavax wishes to engage SLS to Develop (as defined below) or have Developed, Manufacture (as defined below) or have Manufactured and supply of Drug Product, either itself or through one or more Affiliates or Subcontractors, in a manner as provided in this Agreement; and

Whereas, the Parties are entering into this Agreement to govern SLS’ Development, Manufacture and supply (itself or through one or more Affiliates or Subcontractors) of Novavax’ requirements for Drug Products for further commercial use and sale by Novavax in the Territory (as defined below).

Now, Therefore, in consideration of the mutual promises and covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereto agree as follows:

Article I

DEFINITIONS

1.1.“Additional Quantity” has the meaning set forth in Section 4.3.1 (Acceptance of Purchase Order).

1.2.“Adjuvant Components” the components of the Adjuvant, Matrix-A and Matrix-C.

1.3.“Affiliates” means,

(i)with respect to Novavax, any Person that controls, is controlled by, or is under common control with another Person, and

(ii)with respect to SLS, mean any [***].

For purposes of the preceding definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with) shall mean the possession,

2

directly or indirectly, of more than 50% of the outstanding voting securities of or comparable equity interest in any other type of a Person, or otherwise having the legal power to direct the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

1.4.“Agreement” has the meaning set forth in the preamble.

1.5.“Antigen” has the meaning set forth in the preamble.

1.6.“Applicable Law” means, as may be applicable to each Party respectively for their performance of this Agreement or any SOW, any federal, state, local, municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule or regulation issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority, including the applicable regulations and guidance of the FDA, EMA (and national implementations thereof), or MHRA, and any other applicable Regulatory Authority that constitute good clinical practices or good laboratory practices or GMP or good clinical practices (and, if and as appropriate under the circumstances, International Conference on Harmonization (ICH) guidance or other comparable regulation and guidance of any applicable Governmental Authority).

1.7.“Background Intellectual Property” means any and all Intellectual Property of a Party, which, (1) already existed as of the Effective Date of this Agreement or (ii) as demonstrated by corroborating evidence, was developed or obtained by or on behalf of such Party independent of this Agreement, and without reliance upon the Confidential Information of the other Party.

1.8.“Batch” means a quantity of Drug Product that is intended to have uniform character and quality and that has been or is being supplied in accordance with the applicable Specifications during the same cycle of Manufacturing.

1.9.“Breaching Party” has the meaning set forth in Section 11.2 (Termination for Cause).

1.10.“Business Day” means any day other than a Sunday, or bank or other public holiday in either Washington D.C., U.S.A, or London, England.

1.11.“Calendar Quarter” means the respective periods of three consecutive calendar months ending on March 31st, June 30th, September 30th, or December 31st in any Calendar Year.

1.12.“Calendar Year” means any calendar year beginning on January 1st and ending on December 31st.

1.13.“Certificate of Analysis” or “CoA” means, with respect to a Batch, a certificate in the applicable format for the applicable Drug Product manufactured under GMP, from time to time during the Term, issued by SLS, either itself, or through an Affiliate or Subcontractor, and executed by SLS’ responsible person certifying that a Batch meets the Drug Product Requirements and such other criteria as identified in the Certificate of Analysis.

1.14.“Certificate of Conformance” or “CoC” means, with respect to a Batch, a certificate in the applicable format for the applicable Drug Product from time to time during the Term, issued by SLS’, either itself or through an Affiliate’s or Subcontractor’s, quality

3

department and executed by SLS’ responsible person (a) listing the date of manufacture, unique Batch number, and quantity of Drug Product in such Batch, (b) certifying that such Batch was Manufactured in compliance with the applicable Drug Product Requirements, and (c) certifying that all investigative and corrective action reports are completed and approved.

1.15.“Change Order” has the meaning set forth in Section 2.3 (Change Order).

1.16.“Claims” has the meaning set forth in Section 10.1 (Indemnification by SLS)

1.17.“CMC” means chemistry, manufacturing, and controls.

1.18.“Commercial” or “Commercialize” or “Commercialization” means to market, promote, otherwise offer for sale, distribute, and sell the Drug Products. When used as a verb, “to Commercialize” and “Commercializing” means to engage in Commercialization and “Commercialized” has a corresponding meaning.

1.19.“Commercially Reasonable Efforts” means, with respect to an objective, [***].

1.20.“Confidential Information” has the meaning set forth in Section 8.1 (Definition).

1.21.“Cure Period” has the meaning set forth in Section 11.2 (Termination for Cause).

1.22.“Delivery” has the meaning set forth in Section 4.4 (Delivery). “Deliver” and “Delivered” will be construed accordingly.

1.23.“Delivery Date” has the meaning set forth in Section 4.3 (Purchase Orders).

1.24.“Destination” has the meaning set forth in Section 4.4 (Delivery).

1.25.“Develop” or “Development” means to discover, research, or otherwise develop any compound or product, including conducting non-clinical research or clinical trials prior to or after receiving Regulatory Approval and any formulation, Technology Transfer or Process Development with respect to any compound or product. When used as a verb, “Develop” means to engage in Development.

1.26.“Development Batch” or “Development Drug Product” means the Batch or Drug Product produced during Development including Process Development and before receiving Regulatory Approval through the applicable standard review procedure for the Commercialization of the Drug Product. For greater clarity, Emergency Use Drug Product shall be deemed as Development Drug Product.

1.27.“Disclosing Party” has the meaning set forth in Section 8.1 (Definition-Confidential Information).

1.28.“Dollar” means the U.S. dollar, and “$” will be interpreted accordingly.

1.29.“Drug Product(s)”/ “Product(s)” means vaccine resulting from the filled and finished form of the Antigen and the Adjuvant that SLS shall have Manufactured through an Affiliate or Subcontractor, under and in conformance with the Drug Product Requirements, including Development Drug Product, all as applicable pursuant to the relevant Statement of Work(s).

4

1.30.“Drug Product Requirements” means the applicable Specifications and the requirements and/or criteria of or set forth in the Certificate of Analysis, and Certificate of Conformance, GMP, the Master Batch Record, this Agreement, the Quality Agreement, any applicable Regulatory Approval, the requirements of all applicable Regulatory Authorities, and Applicable Law.

1.31.“Effective Date” has the meaning set forth in the preamble.

1.32.“EMA” means the European Medicines Agency, or any successor agency thereto.

1.33.“Emergency Use Drug Products” means the Drug Product(s) through conditional Regulatory Approval of unapproved medical, pharmaceutical or vaccine products or unapproved uses of approved medical products to be used in public health emergency based on a minimum set of available quality, safety and performance data including without limitation Emergency Use Listing Procedure by WHO (“EUL”), or any other conditional Regulatory Approval granted by an applicable Regulatory Authority.

1.34.“Equipment” shall mean, if and where applicable, any equipment (a) provided by Novavax or (b) procured by or on behalf of SLS and charged to Novavax under a Statement of Work.

1.35.“Exploit” means to Develop or have Developed, Commercialize, Manufacture or have Manufactured, and otherwise exploit. When used as a verb, “Exploit” and “Exploiting” means to engage in Exploitation and “Exploited” has a corresponding meaning.

1.36.“Facility” means any facility set forth on Exhibit A (Facilities) in which Drug Product is Manufactured, either by SLS itself or through an Affiliate or Subcontractor, or the activities related to Process Development are carried out by SLS, either itself or through an Affiliate or Subcontractor. For the purpose of clarity, consent of Novavax is hereby deemed granted for the Facilities listed in the Exhibit A as of the Effective Date.

1.37.“FDA” means the U.S. Food and Drug Administration, or any successor agency thereto.

1.38.“Force Majeure” has the meaning set forth in Section 13.13 (Force Majeure).

1.39.“Good Manufacturing Practices” or “GMP” means all applicable current good manufacturing practices, including, as applicable, (a) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 4, 11, 210, 211, 601, 610 and 820, (b) European Directive 2003/94/EC and Eudralex 4, (c) the principles detailed in the International Conference on Harmonization’s Q7 guidelines, and/or (d) the equivalent Applicable Law in any relevant country or region, each as may be amended and applicable from time to time.

1.40.“Governmental Authority” means any court, judicial, legislative, administrative or Regulatory Authority, commission, department, board, bureau or body, or other government authority or instrumentality or any person or entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, whether foreign or domestic, whether federal, state, provincial, municipal, or other.

1.41.“Improvements” means all discoveries, inventions, developments, modifications, innovations, updates, enhancements, improvements, writings or rights, and other Intellectual Property in such Improvements, that are made, discovered, conceived, created, invented, developed, or reduced to practice in the performance of this Agreement, and includes Novavax Improvements and SLS Improvements.

5

1.42.“Indemnified Party” has the meaning set forth in Section 10.3 (Indemnification Procedure).

1.43.“Initial Forecast” has the meaning set forth in Section 4.2 (Forecast).

1.44.“Indirect Tax” means goods and services tax (“GST”), value added tax (“VAT”), sales tax, service tax, customs duties, excise taxes or any other similar taxes.

1.45.“Intellectual Property” means all copyrights, trademarks, patents, trade secrets, designs, information, documentation, drawings, methods, techniques, data, regulatory submissions, specifications, and other intellectual property of any kind (whether or not protected under patent, trademark, copyright or similar laws), and includes all Intellectual Property in Know-How.

1.46.“Know-How” means any records, chemical or biological materials, know-how, processes, techniques, show-how, design information, information, formulations, technology, practices, trade secrets, inventions, methods, data (including animal data, raw data, clinical data, and quality control data) and results in any form whatsoever, whether patentable or not.

1.47.“Laboratory” has the meaning set forth in Section 4.5.1 (Non-Conformance Disputes).

1.48.“Latent Defect” means a defect which is not a Manufacturing Defect, and which relates to a defect in the Adjuvant and/or Antigen that Novavax supplies to SLS under this Agreement, which causes the Drug Product to be defective and/or non-conforming with the Drug Product Requirements.

1.49.“Losses” has the meaning set forth in Section 10.1 (Indemnification by SLS).

1.50.“Manufacture” or “Manufacturing” means to make, produce, manufacture, process, fill, finish, package, label, perform quality assurance testing, release, Deliver, or otherwise ship or temporarily store the Drug Product or any component thereof. When used as a noun, “Manufacture” or “Manufacturing” means any and all activities involved in Manufacturing any product or any component thereof.

1.51.“Manufacturing Defect” means a defect resulting from performance of the Manufacturing Process that causes a Batch of Drug Product to fail to conform to the Drug Product Requirement, which condition is not capable of being discovered upon inspection and testing in accordance with Section 4.5 (Non-Conforming Batches).

1.52.“Manufacturing Process” means the process, or applicable portion(s) thereof for the Manufacture, analysis, documentation, quality evaluation, storage, and shipping of components, intermediates, and Drug Product.

1.53.Master Batch Record” means the production record and data for a Batch, which will be prepared and maintained in SLS’ standard format in accordance with the Quality Agreement. Master Batch Records and other Batch documents shall be written in English.

1.54.“MHRA” means the Medicines & Healthcare products Regulatory Agency in the United Kingdom.

1.55.“Non-Breaching Party” has the meaning set forth in Section 11.2 (Termination for Cause).

6

1.56.“Novavax Improvements” means any and all Improvements related to the Antigen, Adjuvant and Adjuvant Components whether made, discovered, conceived, created, invented, developed, or reduced to practice by either Party or jointly by both Parties.

1.57.“Novavax Supplied Items” means the items specifically set forth in this Agreement or SOWs as being provided by Novavax to SLS, together with any other tangible items, information, or documentation supplied by Novavax in connection with the performance of this Agreement or SOW, including but not limited to the Manufacturing Process, Antigen the Adjuvant Components, any active pharmaceutical ingredient, critical reagents, master cell bank, working cell bank, master virus seed, plasma, component, or Raw Materials.

1.58.“Party” and “Parties” has the meaning set forth in the preamble.

1.59.“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, Governmental Authority or any other form of entity not specifically listed herein.

1.60.“Process Development” means the conduct by SLS, either itself or through an Affiliate or Subcontractor, of activities to develop, confirm and/or refine processes for producing the Drug Product and/or activities to develop, scale-up, optimize, qualify and/or validate the Manufacturing Process (including process performance qualification) suitable for GMP Manufacture of the Drug Product.

1.61.“Project Managers” has the meaning set forth in the preamble in Section 2.2

1.62.“Purchase Order” has the meaning set forth in Section 4.3 (Purchase Orders).

1.63.“Quality Agreement” means the agreement between the Parties, attached to this Agreement and incorporated herein, establishing the quality assurance standards and responsibilities between SLS and Novavax for the Manufacture of Drug Products to be performed by SLS, either itself or through an Affiliate or Subcontractor, for Novavax.

1.64.“Raw Materials” has the meaning set forth in Section 2.5 (Raw Materials).

1.65.“Recall” means any recall or market withdrawal of any Drug Product that was Manufactured, either by SLS itself or through an Affiliate or Subcontractor, under this Agreement.

1.66.“Receiving Party” has the meaning set forth in Section 8.1 (Definition-Confidentiality).

1.67.“Regulatory Approval” means all technical, medical, and scientific licenses, registrations, authorizations, and approvals of any Regulatory Authority necessary for the Development, Manufacture or Commercialization of a pharmaceutical or biologic product in a given country in the Territory.

1.68.“Regulatory Authority” means any governmental agency or authority responsible for granting Regulatory Approvals for a Drug Product in the Territory, including, without limitation, the FDA in the United States and the EMA in the European Union.

1.69.“Representative” has the meaning set forth in Section 8.2 (Obligations).

7

1.70.“Services” means the Process Development or Manufacturing activities to be performed by SLS, either itself or through an Affiliate or Subcontractor, as set forth in this Agreement including the applicable Statement of Work(s).

1.71.“SLS Improvements” shall means any and all Improvements, either by SLS itself or through an Affiliate or Subcontractor, other than Novavax Improvements, in and to, the Manufacturing Process, and including Process Developments, made, discovered, conceived, created, invented, developed, or reduced to practice solely by SLS, its Affiliate or a Subcontractor during the Manufacture of the Drug Product.

1.72.“Specifications” means the specifications for the Drug Product that are set forth in the applicable SOW (as such schedule may be updated from time to time pursuant to Section 3.2 (Specifications and Manufacturing Process).

1.73.“Statement of Work” or “SOW” means a mutually agreed upon document setting forth the scope of the project, general statement of stages and activities, pricing, the schedule of milestones, INCOTERMS for Novavax Supplied Items, deliverables and payments and other pertinent information, in order to prepare for, initiate and conduct the Services, including, as applicable, the project plan, Technology Transfer and Process Development for and Manufacture of the applicable Drug Product. Once finalized and signed by all Parties, the SOW is incorporated into and deemed a part of this Agreement.

1.74.“Subcontractor” means a Third Party(ies) engaged by a Party to perform certain obligations or exercise certain rights on behalf of such Party under this Agreement (including any other contract manufacturers).

1.75.“Supply Failure” has the meaning set forth in Section 4.4.4 (Failure to Satisfy Delivery Date).

1.76.“Technology Transfer” means the transfer from Novavax to SLS of Novavax Supplied Items and any other Intellectual Property associated therewith as set forth in the SOW(s), in Novavax possession and control that is necessary for SLS to perform Process Development and scale- up related to the planned Manufacture of the Drug Product.

1.77.“Term” has the meaning set forth in Section 11.1 (Term).

1.78.“Territory” means the entire world, except for India, unless specified otherwise in a SOW.

1.79.“Third Party” means any Person other than a Party or an Affiliate of a Party.

1.80.“U.S.” means the United States of America, including all territories and possessions, as constituted as of the Effective Date.

1.81.“Updated Forecast” has the meaning set forth in Section 4.2 (Forecast).

Article II

STATEMENTS OF WORK; TECHNOLOGY TRANSFER; PROCESS DEVELOPMENT

1.82.Statement(s) of Work. Novavax and SLS shall coordinate to perform all activities related to Technology Transfer (as may be necessary), Process Development and any Manufacture of Drug Products, subject to the terms and conditions set forth in this Agreement and the SOW(s). Prior to commencing Services, the Parties shall agree upon

8

and execute a SOW, which shall, without limitation, identify the Antigen involved and detail the stages, activities and responsible Party, approvals, timelines, deliverables, financials related to each transaction and/or other information pertinent to the Services.

1.83.Project Managers. The day-to-day interactions and management with respect to a SOW will be performed by two project managers, one appointed by each Party and each one having the authority to manage activities under the SOW on behalf of their respective Party (“Project Managers”). The Project Managers shall be the principal point of contact between the Parties with respect to the performance of the applicable SOW. As part of their duties, the Project Managers shall establish operating guidelines, define communication formats, form and approve project teams and monitor general progress and budget against the applicable SOW. The Project Managers will meet at regular intervals and will coordinate calls/meetings between project teams and management as they deem necessary to implement the applicable SOW.

1.84.Change Orders. If the Parties desire to change the Services or other obligations under a particular SOW, SLS, either itself or through an Affiliate or Subcontractor, shall prepare a change order or amendment to the SOW detailing the nature of such proposed changes and impact of such changes on the SOW’s budget and project timelines (each a “Change Order”) for Novavax review and approval. Once signed by an authorized signatory of each Party, the Change Order shall become effective and the Parties shall implement the changes set forth therein promptly after its execution. SLS will not be obligated to initiate the changes described in a Change Order and Novavax will not be obligated to pay for such changes until the Change Order is duly executed by each Party.

1.85.Provision of Novavax Supplied Items. Novavax shall provide Novavax Supplied Items and any additional technical information pertaining thereto as may be required for SLS’ performance of the Services as expressly and specifically set forth in the SOW. For such Novavax Supplied Items, Novavax shall provide SLS with material information in its possession or control concerning health hazards or potential health hazards associated with exposure to or the handling, storage, use or disposal of the Drug Product and Novavax Supplied Items, including, without limitation, the applicable material safety data sheets, and the importer of record shall be mutually agreed and detailed in the SOW. Title to Novavax Supplied Items shall transfer [***] and [***] shall have all risk of loss or damage to all Novavax Supplied Items [***]. Except for the Novavax Supplied Items, SLS, either itself or through an Affiliate or Subcontractor, shall provide, at its own expense unless otherwise provided for in the applicable SOW, all other items needed for SLS’ performance of the Services and its other obligations under this Agreement.

1.86.Raw Materials Procurement. Unless specifically stated otherwise in the applicable SOW, SLS will (either itself or through an Affiliate or Subcontractor), [***], procure all required raw materials as well as consumables other than Novavax Supplied Items (“Raw Materials”) and shall at all times retain [***]. SLS shall, either itself or through an Affiliate or Subcontractor, order such Raw Materials and will ensure such Raw Materials are delivered in time to perform the applicable Services. SLS will, and will cause its Affiliates and Subcontractors to, treat Novavax’ bill of materials, including the Raw Materials included therein, as Confidential Information of Novavax.

1.87.Subcontracting.

2.6.1. The Parties agree that SLS can subcontract or have the SLS’ obligations subcontracted to any of the Affiliates or Subcontractors. The Subcontractors will be approved in accordance with the Quality Agreement. For the Affiliates or

9

Subcontractors listed hereunder Exhibit B, consent of Novavax is hereby deemed granted in accordance with the Quality Agreement.

2.6.2. The Parties agree that for any additional Subcontractor(s) or Affiliate(s) not included in the said Exhibit B and which are required by SLS in relation to the provision of Services and Drug Products, SLS will provide a [***] prior written notice to Novavax for the engagement of such additional Subcontractor(s) or Affiliate(s). The Parties agree and acknowledge that any such additional Subcontractor(s) or Affiliate(s) may perform SLS’ obligations under this Agreement and the Quality Agreement after the responsible Party completes any GMP-required supplier qualification and Novavax confirms that there are no adverse tax implications which the applicable Party shall use [***] to complete within the said [***] notice period without any unreasonable delay. The Parties agree that any non-Manufacturing services can be assigned by SLS to any Subcontractors without consent of Novavax in accordance with the Quality Agreement.

2.6.3. SLS shall remain responsible for its performance, and for the performance of its Subcontractors and Affiliates hereunder.

Article III

COMMERCIAL MANUFACTURE AND SUPPLY

1.88.General. Pursuant to the terms of this Agreement including the relevant SOW(s), SLS will, itself or through one or more Affiliates or Subcontractors in accordance with Section 2.6 (Subcontracting), Manufacture or have Manufactured and supply/sell Novavax requirements of Drug Product for Development and/or Commercial use and/or sale, as applicable, in the Territory by Novavax and/or its Affiliates or designated Third Parties.

1.89.Specifications and Manufacturing Process. Specifications for a Drug Product shall be specified in an applicable SOW or in the applicable Quality Agreement. SLS may not make any changes to the Specifications or Manufacturing Process for a Drug Product without the [***] consent or agreement of Novavax.

1.90.Drug Product Packing. The Drug Product supplied by SLS, either itself or through an Affiliate or Subcontractor, will include all packaging and labeling in accordance with the requirements set forth in the Specifications, SOW and/or Quality Agreement.

1.91.CDMO Oversight. Novavax has the right to have its personnel at the Facility (“Persons in Plant”) in accordance with the Quality Agreement.

1.92.Quality Agreement. As between the Parties, all matters pertaining to release of a Batch, Quality Control and Quality Assurance, Stability Testing and Waste under this Agreement shall be governed by the Quality Agreement. The terms and conditions of this Agreement which relate to any of the aforementioned matters shall be read and interpreted harmoniously with the terms and conditions of the Quality Agreement, however, in the event of any conflict between any of the terms of this Agreement, and those of the Quality Agreement, the Quality Agreement shall supersede as it relates to quality responsibilities.

Article IV

10

FORECASTS, PURCHASE ORDERS, DELIVERY, NON-CONFORMING PRODUCT AND RECALLS

1.93.General. Unless otherwise specified in this Agreement or an applicable SOW, this Article 4 governs the procedures and the Parties’ rights and obligations with respect to Forecasts, purchase orders, delivery and rejection and non-conformance of Drug Products provided under this Agreement for Development and/or Commercial purposes including Emergency Use Drug Products.

1.94.Forecast. Unless otherwise specified in the applicable SOW, within [***] after the execution of such SOW, Novavax will provide SLS an initial, non-binding [***] forecast of Novavax anticipated [***] demand for such Drug Product for commercial sale, as may be applicable under Emergency Use Authorization approvals, in the Territory by Novavax, which initial forecast will be non-binding and for planning purposes only (“Initial Forecast”). SLS may request revision of the forecasted quantities of the Drug Product within [***] of receiving the Initial Forecast, and Novavax will be bound to consider SLS’ reasonable revisions in good faith and review the Initial Forecast accordingly. Novavax will update the Forecast no less than [***] before the beginning of each [***] on a [***] basis to enable SLS to engage in capacity planning (“Updated Forecast”). SLS will have the right to review and comment on each update to the Forecast and Novavax will consider SLS’ reasonable comments in good faith.

1.95.Purchase Orders. Novavax will issue firm written purchase orders (“Purchase Orders”) for SLS to Manufacture or have Manufactured and Deliver specified quantities of Drug Products at least [***] prior to the applicable Delivery Date for such Drug Products. Each Purchase Order will specify the quantity of Drug Product being ordered (which will be in whole Batches), the requested delivery date (“Delivery Date”), Novavax purchase order number, and any other information necessary to ensure the timely Manufacture and Delivery of such Drug Product.

1.1.1.Acceptance of Purchase Orders. SLS will review each Purchase Order, and if the quantity of Drug Product requested by Novavax is within the quantity forecasted in the Initial Forecast or an Updated Forecast, as applicable, in such Purchase Order, such Purchase Order shall be accepted by SLS. If the quantity of Drug Product requested by Novavax is in excess of the quantity forecasted in the Initial Forecast or an Updated Forecast (“Additional Quantity”), then the amount which is within the quantity forecasted in the Initial Forecast or an Updated Forecast shall be deemed automatically accepted by SLS and, SLS will, no later than [***] after SLS’ receipt of each such Purchase Order, notify Novavax [***] of SLS’ acceptance or rejection of such Additional Quantity. SLS shall notify Novavax in writing of the actual delivery date for Delivery of Drug Product ordered (including whether SLS agrees to supply any Additional Quantity) under such Purchase Order within [***] of receipt of the Purchase Order (or [***] if such Purchase Order requested Additional Quality). If SLS fails to provide such notice to Novavax within such applicable period, then such Purchase Order will automatically be accepted for delivery upon the Delivery Date specified in such Purchase Order.

1.1.2.Modification of Purchase Orders. Novavax may adjust the quantity of Drug Product to be delivered under a particular Purchase Order by [***] notice to SLS; provided, however, that Novavax will reimburse SLS for all incurred, non-cancelable and reasonable expenses related to any cancelled Drug Products; provided further, however, that SLS will use [***] to mitigate any such expenses.

11

1.1.3.No Other Terms. No terms, provisions, or conditions of any Purchase Order or other business form or written authorization used by Novavax or SLS will have any effect on the rights, duties, or obligations of the Parties under or otherwise modify this Agreement or any Purchase Order, regardless of any failure of Novavax or SLS to object to such terms, provisions, or conditions.

1.96.Delivery. SLS will deliver [***]. Title and risk of loss or damage to Drug Products will [***]. SLS will Manufacture or have Manufactured, either itself or through an Affiliate or Subcontractor, and Deliver the Drug Product specified in an accepted Purchase Order for Delivery on the applicable Delivery Date, or such other extended delivery date mutually agreed to between the Parties in accordance with Section 4.4.3.

1.1.1.Delivery Responsibilities. SLS will [***] notify Novavax when an order of Drug Product is ready to be shipped. SLS, either itself or through an Affiliate or Subcontractor, will be responsible for appropriate packaging (including satisfying all requirements in each country in the Territory for Drug Products supplied in such country and in accordance with the Quality Agreement), labelling, and issuance of carrier’s declaration for all Drug Products shipped under this Agreement. SLS and Novavax will ensure that each of their respective employees involved in activities related to shipments (and in the case of Novavax, receipt of shipments) of Drug Product have received adequate training to properly handle such Drug Product.

1.1.2.Without derogating from Section 4.4, SLS is aware that Novavax may reasonably request SLS to deliver the Drug Product to a designee of Novavax in certain specified countries. The quantities and delivery obligations for such supply of Drug Product shall be mutually agreed between the Parties under the relevant SOW.

1.1.3.Storage. Novavax shall [***] take delivery of Batches of the Drug Product at [***] and shall be solely responsible for activities in relation thereto. If Novavax fails to make arrangements to take delivery of any Drug Products on the applicable Delivery Date, then, at SLS’ sole discretion, and subject to SLS’ storage capacity, SLS may temporarily store such Drug Products in accordance with the Quality Agreement and invoice Novavax on a [***] basis for all actual reasonable costs and expenses incurred in storing such Drug Products as specified in the applicable SOW until [***].

1.1.4.Failure to Satisfy Delivery Date.

SLS [***] will notify Novavax if SLS believes it will not deliver all or any portion of the Drug Products on the delivery date specified in the applicable Purchase Order. In the event of a delay or failure to supply as per the delivery schedule (“Supply Failure”), both the Parties shall mutually agree on the path forward. SLS shall not be liable for any delay or failure in the supply of all or any portion of the Drug Products, on the delivery date specified in the applicable Purchase Order, which is due to [***].

1.97.Non-Conforming Batches. Novavax will have the right to inspect and determine whether each Batch conforms to the applicable Drug Product Requirements. During the [***] period after Delivery of each Batch or after release of Batch, whichever occurs later, Novavax may reject any Batch that does not conform to the applicable Drug Product Requirements by providing written notice thereof to SLS; provided, however, that with respect to any Batch that includes a Manufacturing Defect, such [***] period shall not commence until Novavax has actual knowledge of such Manufacturing Defect.

12

Any claim by Novavax that Drug Product does not meet the Drug Product Requirements must be made [***] to SLS within such applicable [***] period. Upon Novavax [***] notification to SLS of Novavax rejection of a Batch, and upon review and agreement by SLS’ quality assurance department, Novavax will be entitled to the remedies under Section 4.6 (Remedies for Non-Conforming Batches) with respect to such Batch.

1.1.1.Non-Conformance Disputes. In the event of a disagreement between the Parties concerning whether or not a Batch meets the applicable Drug Product Requirements under Section 4.5, Novavax and SLS will appoint an [***] to undertake analysis of the Batch to determine whether or not it meets the applicable Drug Product Requirements. Each Party will [***] cooperate with and provide all information, documentation, and materials in its power or possession relevant to the disagreement to [***]. The findings of [***] will be binding on the Parties, except in the case of a manifest error on the part of [***]. All costs and expenses incurred by [***] under this Section 4.5.1 (Non-Conformance Disputes) shall be borne by [***], provided however such costs and expenses shall be borne by [***] if [***].

1.98.Remedies for Non-Conforming Batches or Short Orders. Subject to Section 4.5 (NonConforming Batches), if any Delivery to Novavax of (a) a Batch is timely rejected by Novavax or discovered to contain a Manufacturing Defect, in each case, in accordance with Section 4.5 (Non-Conforming Batches) or (b) any quantity of Drug Product is short against the quantity specified in a Purchase Order, then in each case ((a) or (b)), SLS will, [***], replace, [***], the short or nonconforming Drug Product with Drug Product that conforms to the Drug Product Requirements by a date mutually agreed by the Parties or refund to Novavax the amounts paid by Novavax for any non-conforming Drug Product. SLS will instruct Novavax to destroy or return any nonconforming Batch to SLS, in each case, [***]. SLS will instruct Novavax to destroy or return any non-conforming Drug Product at SLS’ election and provide Novavax with a destruction certificate.

1.99.Latent Defects, Pharmacovigilance, Adverse Events and Recalls. Both Parties confirm that since

(i)SLS, either itself or through an Affiliate or Subcontractor is performing this Agreement solely in the capacity of a contract manufacturer; and

(ii)Novavax owns, controls and shall provide SLS with the Novavax Supplied Items (including Antigen and Adjuvant Components); and

(iii)Novavax shall have the right to inspect and determine whether each Batch conforms to the applicable Drug Product Requirements in accordance with Section 4.5.

(iv)Novavax will have sole right, duty obligation and discretion, over handling any and all claims related to (a) any Latent Defects in the Drug Products, (b) all pharmacovigilance activities, (b) any adverse events notifications and complaints, and (c) whether and under what circumstances to require a Recall of the Drug Product in a country in the Territory.

[***] will be responsible for all costs and expenses associated with any Recall, except to the extent Recall results from SLS’ failure to Manufacture or have Manufactured the Drug Product in accordance with the GMP, in which case then [***] will be responsible for costs and expenses associated with such Recall.

13

1.100.Conditions for Manufacture, Supply and Delivery of Drug Product by SLS.

1.1.4.SLS shall commence Manufacturing operations, either itself or through an Affiliate or Subcontractor, and shall supply and Deliver the Drug Product only after it receives all necessary approvals, authorizations, permissions, licenses or any other requirements, conditions or approvals of the Regulatory Authority / Government Authority in India.

1.1.5.Novavax confirms that the Manufacture, supply and Delivery obligations of SLS in relation to the Drug Product under each and every SOW are entirely subject to receipt by SLS of all necessary and applicable authorisations from the Regulatory Authority / Government Authority, including any export permissions and / or any other requirements, conditions or approvals in India.

1.1.6.Novavax confirms that unless conditions stipulated under Section 4.8.1 and Section 4.8.2 are satisfied for a SOW, any delay or non-performance by SLS of any of the terms and conditions of such SOW shall not be construed as breach by SLS and Novavax hereby waives, and holds SLS harmless for any claims in relation thereto as long as SLS is using [***] to meet such conditions.

Article V

REGULATORY MATTERS GOVERNING PERFORMANCE OF PARTIES SPECIFIC AND
RESTRICTED TO THIS AGREEMENT

1.1.Regulatory Approvals. Specific and restricted to the context of this Agreement, SLS, either itself or through an Affiliate or Subcontractor, will be [***] responsible for obtaining and maintaining any permits or other Regulatory Approvals required under Applicable Law to Manufacture or have Manufactured the Drug Product. SLS will (i) provide necessary documentation for Novavax with respect to SLS’ drug master files as set forth in Section 5.2 (Right of Reference) and/or (ii) develop investigational medicinal product dossiers (IMPDs) and chemistry, manufacturing and controls (CMC) sections, as required to support program needs, in each case, without incremental charge to Novavax. All such documents shall be available in English, and, if translated from another language, certified to be accurate and complete by a Third Party provider of translation services qualified by SLS and approved by Novavax (“Certified Translation”). If Novavax requires such documentation to be translated into a nonEnglish language, then SLS will provide a Certified Translation in the language requested by Novavax as a Service at [***] cost pursuant to a mutually agreed SOW.

1.2.Documentation for Drug Product Master File. At [***] expense, SLS, either itself or through an Affiliate or Subcontractor, will maintain and keep updated drug master files for the Drug Product. SLS shall provide all necessary documentation to Novavax with respect to the Drug Product master files for use in regulatory filings related to the Drug Product. At Novavax written request, SLS will take other reasonable as may be requested by any Regulatory Authorities to give Novavax the benefit of such master files.

1.3.Records and Accounting by SLS. SLS will keep and shall ensure that each Affiliate and Subcontractor keeps records of the Manufacture (including production data), testing, and shipping of each Batch and retain samples of all Batches in accordance with the Quality Agreement.

14

1.4.Audits and Regulatory Inspections. Audits and Regulatory Inspections of the Facilities and Affiliate/Subcontractor facilities will be conducted as specified in the Quality Agreement. Novavax will execute any [***] confidentiality agreement required by any Affiliate or Subcontractor in connection with such visit, audit or inspection of the Facility of such Affiliate or Subcontractor, and will comply with such Affiliate’s or Subcontractor’s reasonable rules and regulations. In the event Novavax foresees the existence of an operational issue in the Manufacture of any component of the Drug Product that Novavax [***] believes [***] may result in a GMP or other regulatory deficiency or failure of SLS to meet its obligations under this Agreement or the Quality Agreement (such as failure of a Drug Product to meet the Drug Product Requirements), then Parties shall agree mutually to conduct joint inspections.

1.5.Notification of Regulatory Inspections. If any Governmental Authority provides SLS notice of its intent to conduct an inspection or investigation, or to take any other type of regulatory action with respect to any Facility under the Agreement, then SLS will give Novavax notice [***]. SLS will provide to Novavax all information and findings pertaining thereto no later than [***] after receipt. If the inspection or investigation relates to Drug Product, then Novavax shall be entitled to be present during any such inspection or investigation.

1.6.Reports. SLS will supply [***] such necessary and applicable data reasonably in its control relating to the Drug Products, including release test results, complaint test results, and all investigations (in Manufacturing, testing, and storage), that Novavax requires or otherwise requests in order to complete any filing with any Regulatory Authority. Further, SLS will provide Novavax with written reports in the format reasonably required by Novavax and hold meetings with Novavax Representatives [***] on the progress of any Services at Novavax request and as provided for in the relevant SOW.

1.7.Complaints. In connection with any Drug Product complaints or customer communications reasonably relating to the Services that are received by SLS, SLS will [***] report such to Novavax. In addition to what is agreed between the Parties under the Quality Agreement, for the sake of clarity, it is reiterated that Novavax shall be solely responsible obligated and responsible to conduct investigation of any such complaints and otherwise handle all claims or complaints towards any Latent Defects in the Drug Products, or any adverse events notifications, or and Drug Product recalls.

Article VI

PAYMENTS

1.1.Payments.

1.1.1.Invoice and Payment. SLS will issue to Novavax a written invoice (i) in accordance with each SOW or (ii) upon Delivery of the Drug Product set forth in a Purchase Order, and Novavax will pay SLS all undisputed amounts within [***] of receipt of each such invoice. All invoices issued and payments to be made between the Parties under this Agreement shall be made in Dollars and shall be paid by wire transfer in immediately available funds to a bank account designated by the receiving Party. If, due to restrictions or prohibitions imposed by national or international authority, a given payment cannot be made as provided in this Section 6.1 (Payments), then the Parties will consult with a view to finding a prompt and acceptable solution. Upon agreement of the Parties in a SOW, Novavax may deliver such payment in the relevant country and in the local currency of the relevant country.

15

1.8.Taxes.

1.1.2.Responsibility. Except as expressly set forth in Section 6.2.2 (Withholding Taxes) and stated below, each Party will pay any and all taxes levied by Applicable Law on account of all payments received by such Party from the other Party or any third party as a result of this Agreement, including all taxes based on any net income of such Party.

1.1.3.Withholding Taxes. SLS will provide such information and documentation to Novavax as are [***] requested by Novavax to determine if any withholding taxes apply to any payments to be made by Novavax to SLS under this Agreement. If any taxes are required to be withheld with respect to any such payments to be made by Novavax to SLS under this Agreement, Novavax will: (a) deduct those taxes from the remittable payment, (b) pay the taxes to the proper taxing authority, (c) send evidence of the obligation together with proof of tax payment to SLS on a [***] basis following such tax payment, and (d) if applicable, [***] assist SLS in its efforts to obtain a reduced withholding tax rate or a refund or credit for such tax payment. Each Party agrees to cooperate with the other Party in claiming refunds or exemptions from such deductions or withholdings under any relevant agreement or treaty that is in effect. The Parties will discuss applicable mechanisms for minimizing such taxes to the extent possible in compliance with Applicable Law.

1.1.4.Each Party shall be responsible with respect to any and all of its respective Indirect Tax liabilities arising out of this Agreement.

1.1.5.Cooperation. The Parties will cooperate in accordance with Applicable Law to minimize indirect taxes (such as value added tax, sales tax, consumption tax, and other similar taxes) in connection with payments to be made under this Agreement. Further, both Parties acknowledge and agree that in the event of any enquiry, scrutiny, audit, assessment or any other tax proceedings are initiated, it shall [***] co-operate with the other by furnishing the relevant information related to the sale of goods as a result of this Agreement on [***] basis as may be required from time to time.

1.1.Financial Reports

SLS shall furnish a certificate from its Certified Auditors for the calculation of amounts as payable under Section 6.1.1 for every [***] (the “[***] Certificates”) within [***] of end of each such [***]. As used herein, “Certified Auditors” means an auditor firm duly licensed to practice as an auditor and whose lead individual responsible for [***] audits will have a minimum of ten years of experience similarly auditing for biotechnology, biopharma or pharmaceutical companies and who is responsible and liable under Applicable Law.

Article VII

INTELLECTUAL PROPERTY

1.9.Background Intellectual Property. This Agreement does not affect the ownership of a Party’s Background Intellectual Property which remains the property of such Party (or its licensors). SLS does not acquire a license or any other right to Novavax Background Intellectual Property except for the limited purpose of carrying out its duties and

16

obligations under this Agreement or SOW as set forth in Section 7.4.1 (Novavax as Licensor).

1.10.Ownership of Improvements.

1.1.1.[***] shall own all right in and title to [***]. Any [***] necessary for [***] to perform this Agreement shall be promptly disclosed to [***]. In the event [***], either itself or through an Affiliate or Subcontractor, conceives, develops or reduces to practice during the Term any [***], then [***] shall promptly disclose in writing to Novavax any such [***]. [***] assigns (and if required shall enter into contracts with its Subcontractors / Affiliates pursuant to which the Subcontractors / Affiliates shall assign to [***] to effect the intent of this provision) right, title and interest in and to any [***].

1.1.2.[***] shall own all right in and title to [***], either alone, or jointly with its Affiliates.

1.1.Rights in Intellectual Property. The Party who owns a particular [***], shall have the worldwide right to control the drafting, filing, prosecution, defense, maintenance and enforcement of patents or other Intellectual Property rights covering or claiming such [***], including decisions about the countries in which to file patent applications. Patent costs associated with the patent activities described in this Section shall be borne by the applicable owner in the case of an [***] owned solely by such Party.

1.2.License Grant; Covenant Not to Sue.

1.1.3.Novavax as Licensor. During the term of this Agreement, Novavax hereby grants to SLS a non-exclusive, transferable (only in conjunction with a permitted assignment under Section 13.3), paid-up, royalty free, license to SLS, its Affiliates (sublicensable to their respective Subcontractors) to use Novavax Background Intellectual Property, Novavax Supplied Items, Know How, and Novavax Improvements only to the extent necessary to carry out its duties and obligations of Product Development and Manufacture of the Drug Product by SLS, either itself or through an Affiliate or Subcontractor, under this Agreement or the applicable SOW.

1.1.4.Covenant Not to Sue. SLS on behalf of itself, and its Affiliates, hereby covenants not to assert or cause to be asserted, and will cause its Affiliates and Subcontractors not to assert or cause to be asserted, against any Covenant Beneficiary, [***]. Each Covenant Beneficiary that is not a party to this Agreement is a third party beneficiary solely of this Section 7.4.2 (Covenant Not to Sue). If SLS or any of its Affiliates sells, assigns, exclusively licenses, transfers or otherwise grants any right under any SLS Improvement to a Third Party, then SLS or such Affiliate, as applicable, will require such purchaser, assignee, licensee, or transferee to agree in writing to be bound by the same covenant to the same extent as made by SLS and its Affiliates in this Section 7.4.2.

Article VIII

CONFIDENTIALITY

1.1.Definition. “Confidential Information” means the terms and provisions of this Agreement and other Know-How, trade secrets, inventions, materials, and other proprietary information and data of a financial, commercial, or technical nature (in

17

whatever form) that a Party (“Disclosing Party”) or any of its Affiliates has supplied or otherwise made available to the other Party (“Receiving Party”) or its Affiliates, which are disclosed in writing or orally and whether or not specifically marked or designated by the Disclosing Party as confidential. For clarity, Novavax Confidential Information includes Novavax Supplied Items and all other data, information and Know-How associated therewith. For clarity, SLS’ Confidential Information includes (i) all data, information and Know-How owned or controlled by SLS (including all data, information and Know-How owned or controlled by an Affiliate / Subcontractor) in relation to any Development or Manufacturing activities at its Facilities or the Facilities of a Subcontractor or Affiliate, (ii) all records, reports books of accounts maintained by SLS in the performance of this Agreement and any SOW, and (iii) any non-public information or data that may be disclosed to or shared with, or to which Novavax or any of its Affiliates or any other Third Party acting on its behalf (including any auditors appointed by Novavax) may be exposed to during any site visits or inspection visits or regulatory visits at any of SLS’ and / or a Subcontractor’s Facilities (as the case may be).

1.2.Obligations. The Receiving Party will (a) protect all Confidential Information of the Disclosing Party against unauthorized disclosure to Third Parties and (b) not use or disclose the Confidential Information of the Disclosing Party, except as permitted by or in furtherance of exercising rights or carrying out obligations hereunder. The Receiving Party will treat all Confidential Information provided by the Disclosing Party with the same degree of care as the Receiving Party uses for its own similar information, but in no event less than a reasonable degree of care. The Receiving Party may disclose the terms and conditions of this Agreement and the Confidential Information to its Affiliates, and their respective directors, officers, employees, Subcontractors, sublicensees, consultants, attorneys, accountants, banks, financial advisors, funders and investors (collectively, “Representatives”) who have an absolute need- to-know such information to carry out the activities and transactions or to exercise its rights contemplated by this Agreement , provided that the such Representatives are bound by written obligations of confidentiality at least as restrictive as those set forth in this Agreement. Each Party will promptly notify the other Party of any misuse or unauthorized disclosure of the other Party’s Confidential Information.

1.3.Exceptions to Confidentiality. The obligations under this Article 8 (Confidentiality) will not apply to any information to the extent the Receiving Party can demonstrate by competent evidence that such information:

1.1.1.is (at the time of disclosure) or becomes (after the time of disclosure) known to the public or part of the public domain through no breach of this Agreement by the Receiving Party or any Representatives to whom it disclosed such information;

1.1.2.was known to, or was otherwise in the possession of, the Receiving Party prior to the time of disclosure by the Disclosing Party;

1.1.3.is disclosed to the Receiving Party on a non-confidential basis by a Third Party who is entitled to disclose it without breaching any confidentiality obligation to the Disclosing Party; or

1.1.4.is independently developed by or on behalf of the Receiving Party or any of its Affiliates, as evidenced by its written records, without use or access to the Confidential Information.

1.4.Permitted Disclosures.

18

1.1.1.Compliance with Law. The Receiving Party may disclose Confidential Information of the Disclosing Party that the Receiving Party is required to disclose under Applicable Laws or a court order or other governmental order, provided that the Receiving Party: (a) provides the Disclosing Party with [***] notice of such disclosure requirement; (b) affords the Disclosing Party an opportunity to oppose or limit, or secure confidential treatment for such required disclosure; and (c) if the Disclosing Party is unsuccessful in its efforts pursuant to point (b) hereinabove, discloses only that portion of the Confidential Information that the Receiving Party is legally required to disclose as advised by the Receiving Party’s legal counsel.

1.1.2.SEC Filings and Other Disclosures. Novavax may disclose such [***] redacted terms of this Agreement (after SLS having reviewed and commented on the same) only to the extent in the [***] opinion of Novavax or its outside legal counsel required to comply with the rules and regulations promulgated by the United States Securities and Exchange Commission or similar security regulatory authorities in other countries. If Novavax must disclose this Agreement or any of the terms hereof in accordance with the preceding sentence, then Novavax agrees, [***], to seek confidential treatment of portions of this Agreement or such terms as may be [***] requested by SLS, and to cause all Persons to whom any terms of this Agreement are disclosed to be bound by written obligations of confidentiality and non-use no less stringent than the confidentiality terms of this Agreement.

1.1.3.Other Permitted Disclosure. Notwithstanding the restrictions set forth in this Article 8 (Confidentiality), Novavax may disclose the terms and provisions of this Agreement to any Third Party in connection with any actual or bona fide prospective acquisition, merger, financing, transfer or sale of all or substantially all of the assets of the business of Novavax to which this Agreement relates as permitted under Section 13.3 (Assignment); provided that such Third Party is bound by written obligations of confidentiality at least as restrictive as those set forth in this Agreement. Novavax agrees that in the event it is requested to disclose any portion of SLS’ Confidential Information to such Third Party for the context laid out above, then, it must secure [***] consent from SLS [***], failure of which shall be a considered a breach of the terms of confidentiality of this Agreement.

1.1.4.Continuing Confidentiality Obligations. If and whenever any Confidential Information is disclosed in accordance with this Section 8.4 (Permitted Disclosures), such disclosure shall not cause any such information to cease to be Confidential Information except to the extent that such disclosure results in a public disclosure of such information (other than by breach of this Agreement).

1.5.Ongoing Obligation for Confidentiality. Upon expiration or termination of this Agreement, the Receiving Party will, and will cause its Representatives to, destroy, delete, or return (as requested by the Disclosing Party and any such destruction or deletion shall be certified by the Receiving Party in writing) any Confidential Information of the Disclosing Party, except for one copy, which may be retained in its confidential files for archive purposes. Notwithstanding the foregoing, the obligations set forth under this Section shall survive the termination or expiration for [***].

19

Article IX

REPRESENTATIONS, WARRANTIES, AND COVENANTS

1.6.Representations, Warranties and Covenants of Each Party. Each Party represents, warrants and covenants that:

1.1.5.it is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation;

1.1.6.it has full corporate power and authority to execute, deliver, and perform under this Agreement, and has taken all corporate action required by Applicable Laws and its organizational documents to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement;

1.1.7.this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms;

1.1.8.all consents, approvals, and authorizations from all Governmental Authorities or other Third Parties required to be obtained in connection with this Agreement have been obtained; and

1.1.9.the execution and delivery of this Agreement and all other instruments and documents required to be executed pursuant to this Agreement, and the consummation of the transactions contemplated hereby do not and will not: (a) conflict with or result in a breach of any provision of its organizational documents; (b) result in a breach of any agreement to which it is a party that would impair the performance of its obligations hereunder; or (c) violate any Applicable Laws.

1.7.Representations, Warranties and Covenants of SLS. SLS represents, warrants and covenants that:

1.1.5.neither it nor any Person acting for or on behalf of SLS will, in connection with the performance of this Agreement, (i) use any funds for contributions, gifts, entertainment, or other payments related to political activity or (ii) make any payment to any government official, in each case in violation of any Applicable Law;

1.1.6.(i) neither it nor any Affiliate / Subcontractor has been debarred under the provisions of the Applicable Law, or by any Regulatory Authority, (ii) neither it nor any Affiliate / Subcontractor will use in any capacity, in connection with the performance of this Agreement, any Person who has been debarred pursuant to the foregoing, and (iii) if at any time during the term of this Agreement, it or any Person engaged by SLS to perform this Agreement (a) becomes debarred, or (b) receives notice of action or threat of action with respect to its debarment, SLS shall notify Novavax immediately, and Novavax shall have the right to terminate this Agreement immediately.

1.8.Batch Warranties. SLS warrants that all Batches Manufactured, either by itself or through Subcontractor, under this Agreement will:

20

1.1.10.for Batches delivered for Commercial use, be Delivered with full title and with the applicable Certificate of Analysis, Certificate of Conformance, Master Batch Record, applicable master safety data sheet, and additional Batch-related documentation identified in the Quality Agreement;

1.1.11.be Manufactured in accordance with GMP or otherwise in accordance with all Applicable Law and the terms of the applicable Quality Agreement;

1.1.12.at the time of the Delivery, conform to the applicable Specifications in all respects.

1.9.Representations, Warranties and Covenants of Novavax. Novavax represents, warrants and covenants that:

1.1.1.All Novavax Background Intellectual Property, Novavax Supplied Items (including the Antigen), other Raw Materials and any Know-How provided to SLS under this Agreement or under any SOW have been Manufactured by Novavax (or procured from a Third Party manufacturing them, as the case may be), strictly in accordance with all Applicable Laws and GMP;

1.1.2.Novavax controls or has all such right title and interest in the Novavax Background Intellectual Property, Novavax Supplied Items (including the Antigen), other Raw Materials and any Know-How, as may necessary for Supply to and use by SLS, either itself or through an Affiliate or Subcontractor, thereof, for the performance of SLS’ obligations under this Agreement; and

1.1.3.Supply to and use by SLS, either itself or through an Affiliate or Subcontractor, of any Novavax Background Intellectual Property, Novavax Supplied Items (including the Antigen), other Raw Materials and any Know-How for the Development or Manufacture of the Drug Products under this Agreement or any SOW - (i) free of any Third Party lien, (ii) does not infringe any valid Third Party Intellectual Property Rights, (iii) is not in violation of any agreement or other contractual arrangement by which Novavax may be bound and (iv) is compliant with all Applicable Laws which may apply the Agreement.

1.10.DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.

1.11.NO CONSEQUENTIAL DAMAGES. EXCEPT FOR DAMAGES RESULTING FROM (A) BREACHES OF ARTICLE 8 (CONFIDENTIALITY) OR (B) INDEMNIFIABLE CLAIMS UNDER ARTICLE 10 (INDEMNIFICATION; INSURANCE), IN NO EVENT WILL EITHER PARTY HAVE ANY CLAIMS AGAINST OR LIABILITY TO THE OTHER PARTY WITH RESPECT TO ANY [***].

Article X

INDEMNIFICATION; INSURANCE

1.12.Indemnification by SLS. SLS will indemnify, defend, and hold harmless Novavax and its Affiliates and their respective officers, directors, employees, successors, and permitted

21

assigns, (each a “Novavax Indemnified Party”) from and against any and all losses, liabilities, damages, costs, fees, and expenses (including reasonable attorneys’ fees) (collectively, “Losses”) suffered by any Novavax Indemnified Party in connection with any suits or claims brought by any Third Party (“Claims”) arising out of or resulting from (in each case, except to the extent arising out of or resulting from any Novavax Indemnified Party’s negligence or willful misconduct, or any Latent Defects in any of the Antigen or Adjuvant as provided by Novavax):

1.1.7.[***]

1.1.8.[***]

1.1.9.[***]

1.1.10.[***]

1.1.11.[***]

1.1.12.[***]

1.13.Indemnification by Novavax. Novavax will indemnify, defend, and hold harmless SLS and its Affiliates and their respective officers, Subcontractors, directors, employees, successors, and permitted assigns (each, a “SLS Indemnified Party”) from and against Losses suffered by any SLS Indemnified Party in connection with any Claims arising out of or resulting from (in each case, except to the extent arising out of or resulting from any SLS Indemnified Party’s negligence or willful misconduct):

1.1.1.[***]

1.1.2.[***]

1.1.3.[***]

1.1.4.[***]

1.1.5.[***]

1.1.6.[***]

1.1.7.[***]

1.14.Indemnification Procedure. In connection with any Claim for which an Indemnified Party seeks indemnification from the other Party pursuant to this Agreement, the Indemnified Party will: (a) give the other Party [***] written notice of the Claim; provided, however, that failure to provide such notice will not relieve the other Party from its liability or obligation hereunder, except to the extent of any material prejudice as a direct result of such failure; (b) cooperate with the other Party, at [***] expense, in connection with the defense and settlement of the Claim; and (c) permit the other Party to control the defense and settlement of the Claim; provided, however, that the other Party may not settle the Claim without the Indemnified Party’s [***] consent [***], if such settlement [***]. Further, the Indemnified Party will have the right to participate (but not control) and be represented in any suit or action by counsel of its selection and at [***] expense.

22

1.15.Insurance. SLS and Novavax, each at their own expense, shall obtain and thereafter maintain during the Term and thereafter all necessary insurance covering each Party’s performance under this Agreement, as may be applicable to each Party under the respective Applicable Law. Each Party shall provide the other a certificate of insurance upon the written request of the other Party.

Article XI

TERM AND TERMINATION

1.16.Term. This Agreement will commence upon the Effective Date and, if not otherwise terminated earlier pursuant to this Article 11 (Term and Termination), will continue in full force and effect until three (3) years or until two (2) years following the date of expiration or termination of the last SOW, whichever is later (“Term”).

1.17.Termination for Cause.

1.1.8.Either Party (“Non-Breaching Party”) will have the right, without prejudice to any other remedies available to it at law or in equity, to terminate this Agreement in the event the other Party breaches (“Breaching Party”) any of its material obligations hereunder and fails to cure such breach within [***] after receiving notice thereof; provided, however, that (a) if the breach by its nature is not curable, then the NonBreaching Party will be entitled to seek such relief within [***] of providing written notice to the Breaching Party, and (b) if such breach by its nature is curable, then such period will be extended as and for so long as the Breaching Party is making [***] to cure such breach, but in no event will such additional period exceed [***] (that is, for a total cure period of up to [***]) (“Cure Period”), in each case (a) and (b), at the end of which such termination shall become effective, unless, such allegedly breaching Party disputes such breach in accordance with Section 11.2.2 below. Any termination by a Party under this Section 11.2 (Termination for Cause) will be without prejudice to any damages or other legal or equitable remedies to which it may be entitled from the other Party.

1.1.9.If the Parties [***] disagree as to whether there has been a material breach, including whether such breach was material or curable, the Party that disputes whether there has been a material / curable breach may contest the allegation in accordance with Section 13.2 (Dispute Resolution). Notwithstanding anything to the contrary in Section 11.2.1, if a Party contests the allegation in accordance with Section 13.2, the Cure Period for any dispute will extend from the date that written notice was first provided to the Breaching Party by the Non-Breaching Party until the end of the escalation period stipulated under Section 13.2.2, and it is understood and acknowledged that, during such period, all of the terms and conditions of this Agreement will remain in effect, and the Parties will continue to perform all of their respective obligations under this Agreement.

1.18.Termination and Bankruptcy. This Agreement may be terminated by a Party [***] to the other Party if the other Party files a petition in bankruptcy or of insolvency, or is adjudicated insolvent, or takes advantage of the insolvency law in any state or country, or makes an assignment for the benefit of creditors, or a receiver, trustee or other court officer is applied for or appointed for its property.

1.19.Termination for Change of Control of Novavax. SLS shall have the right, in its sole discretion to terminate this Agreement by a [***] to Novavax, in the event Novavax

23

undergoes a change of control event as stipulated under Section 13.3 (b) and the party acquiring or merging with or in any other manner controlling Novavax [***].

1.20.Termination by Mutual Consent. In the event, the applicable Regulatory Authority in the Territory does not approve any of the Drug Products (or any other product containing or comprised of any of the Drug Products) for marketing or distribution or withdraws marketing or distribution approval, or SLS fails to maintain the consents, approvals, and authorizations from all Governmental Authorities or other Third Parties required to Manufacture the Drug Products then both Parties may mutually agree in good faith to decide the path forward.

1.21.Termination of SOWs for Convenience. Any right for a Party to terminate a SOW for convenience shall be set forth in the applicable SOW

Article XII

EFFECTS OF TERMINATION

1.22.Accrued Rights. Expiration or termination of this Agreement will not relieve the Parties of any liability that accrued hereunder prior to the effective date of such expiration or termination, nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement, and any such expiration or termination will be without prejudice to the rights of either Party against the other, provided that SLS, unless otherwise requested by Novavax, will use its [***] to cancel, any third party obligations for, or repurpose for other uses by SLS, either itself or through an Affiliate or Subcontractor, any Raw Materials or capacity, for which Novavax may owe an obligation of reimbursement to SLS.

1.23.Return of Confidential Information. Upon the expiration or termination of this Agreement, the Receiving Party will return to the Disclosing Party (or, as directed by the Disclosing Party, destroy, at the [***] sole cost, in which case, the Receiving Party shall certify any such destruction in writing) all Confidential Information of the Disclosing Party that is in the Receiving Party’s possession or under its control (other than any Confidential Information required to continue to exercise a Party’s rights that survive termination of this Agreement). Notwithstanding the foregoing, the Receiving Party shall not be required to return or destroy Confidential Information contained in any computer system back-up records made in the ordinary course of business and shall be entitled to retain in its possession one copy of such Confidential Information, solely to the extent necessary to comply with Applicable Law and to monitor its continuing obligations under the Agreement, and provided further that in each instance, all terms of confidentiality, non-use and non-disclosure shall continue to govern the Confidential Information so retained by the Receiving Party.

1.24.Survival. The following provisions, as well as any other provisions which by their nature are intended to survive termination or expiration, will survive termination or expiration of this Agreement: Article 1 (Definitions); Section 4.7 (Latent Defects, Pharmacovigilance, Adverse Events and Recalls) Article 6 (Payments); Article 7Article 7Article 7 (Intellectual Property); Article 8 (Confidentiality); Article 9 (Representations, Warranties, and Covenants), Article 10 (Indemnification and Insurance); Article 12 (Effect of Termination); Article 13 (Miscellaneous).

24

Article XIII

MISCELLANEOUS

1.25.No Third Party Obligation on SLS

1.1.1.1Novavax expressly agrees that SLS is performing its obligations under this Agreement, either itself or through an Affiliate or Subcontractor, solely in the capacity of a contract manufacturer to supply the Drug Product quantities mutually agreed between the Parties under a SOW. SLS shall not be bound by or obligated to any Third Party to fulfill any Drug Product supply commitments or assurances or covenants as a result of this Agreement, whether as of Effective Date, or at any time during the Term, which are given by Novavax to any Third Party, including without limitation to any Government Authority / Regulatory Authority in any country within the Territory, or any international for-profit organization or any international non-profit organization or any statutory or governmental entity or any other private or public corporation, and Novavax shall be solely obligated to fulfill any and all of its covenants to any such Third Party without any recourse to SLS.

1.1.2.For the sake of clarity, by executing this Agreement, SLS shall not, either directly, or by any implication, be responsible for or become to a party to, any obligations, commitments, promises or other assurances by Novavax to any Third Party in relation to the supply of the Drug Product, and Novavax indemnifies and holds SLS harmless against any claims from any such Third Party in relation thereto.

1.26.Dispute Resolution.

1.1.1.Disputes Generally. The Parties recognize that a dispute may arise relating to this Agreement. In the event of a dispute, the Project Managers will negotiate [***] to settle any such dispute. If the Project Managers are unable to resolve a dispute within [***], then either Party may escalate the dispute pursuant to Section 13.2.2.

1.1.2.Escalation. [***] after the written request of either Party, each of the Parties will appoint a designated representative with appropriate seniority, experience, and authority to meet in person or by telephone to attempt [***] to resolve any dispute that arises under this Agreement. If the designated representatives do not resolve the dispute within [***] of such request, then either Party may commence legal proceedings in accordance with Section 13.5 below.

1.27.a. Assignment. No Party hereto may assign any right or obligation hereunder to a Third Party without the [***] consent of the other Party hereto. Notwithstanding the foregoing, either Party may assign this Agreement, or all of its rights or obligations hereunder to any Affiliate of such Party and shall notify the other Party in writing of such assignment thereafter, in which event, the assigning Party hereby guarantees the performance by such Affiliates of such Party’s obligations under this Agreement and will cause such assignee Affiliate to comply with the provisions of this Agreement in connection with such performance.

b. Change of Control. Subject to [***] notice to SLS, Novavax may assign this Agreement, or all of its rights or obligations hereunder and thereunder to any Affiliate of Novavax, or to any Person that acquires all or substantially all of the stock or assets of the business to which this Agreement relates (by merger, stock or asset purchase, operation

25

of law, or otherwise), provided that such Third Party acquiring Novavax shall be bound by the terms and conditions of this Agreement and accordingly be obligated to perform all the obligations and responsibilities of Novavax under this Agreement, and provided further that, in the event of any failure of any such party acquiring or merging with Novavax to comply with the provisions of this Section 13.3b., [***].

c. Successors and Assigns. This Agreement will be binding on and insure to the benefit of the Parties, their executors, administrators, successors and permitted assigns.

1.28.Severability. Should one or more of the provisions of this Agreement become void or unenforceable as a matter of law, then such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement, and the Parties agree to substitute a valid and enforceable provision therefor which, as nearly as possible, achieves the desired economic effect and mutual understanding of the Parties under this Agreement.

1.29.Governing Law; Jurisdiction. This Agreement, and all claims arising under or in connection therewith, will be governed by and interpreted in accordance with the [***] without regard to conflict of law principles thereof. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to any Purchase Order made pursuant to this Agreement.

1.30.Waivers and Amendments. The failure of any Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement will not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party. No waiver will be effective unless it has been given in writing and signed by the Party giving such waiver. No provision of this Agreement may be amended or modified other than by a written document signed by authorized representatives of each Party.

1.31.Relationship of the Parties. Nothing contained in this Agreement will be deemed to constitute a partnership, joint venture, or legal entity of any type between SLS and Novavax, or to constitute one Party as the agent of the other. Moreover, each Party agrees not to construe this Agreement, or any of the transactions contemplated hereby, as a partnership for any tax purposes. Each Party will act solely as an independent contractor, and nothing in this Agreement will be construed to give any Party the power or authority to act for, bind, or commit the other Party.

1.32.Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

1.33.Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when: (a) delivered by hand (with written confirmation of receipt); (b) sent by fax (with written confirmation of receipt), provided that a copy is sent by an internationally recognized overnight delivery service (receipt requested); or (c) sent by email to the addressee, and marked as “Notice” under this Section 13.9, provided sender receives electronic confirmation of receipt by such recipient, or (d) when received by the addressee, if sent by an internationally recognized overnight delivery service, receipt requested, in each case to the appropriate addresses and fax numbers set forth below (or to such other addresses and fax numbers as a Party may designate by written notice):

26

If to SLS:
Serum Life Sciences Ltd.
12 New Fetter Lane, London, United Kingdom, EC4A 1JP

If to Novavax:
Novavax, Inc.
21 Firstfield Road
Gaithersburg, MD 20878
Attn: [***]
E: [***]

1.34.Further Assurances. Novavax and SLS hereby covenant and agree without the necessity of any further consideration, to execute, acknowledge, and deliver any and all such other documents and take any such other action as may be reasonably necessary or appropriate to carry out the intent and purposes of this Agreement.

1.35.No Third Party Beneficiary Rights. Except as expressly provided in this Agreement, this Agreement is not intended to and will not be construed to give any Third Party any interest or rights (including any third party beneficiary rights) with respect to or in connection with any agreement or provision contained herein or contemplated hereby.

1.36.Entire Agreement. This Agreement, together with its Exhibits, SOWs, and the Quality Agreement, sets forth the entire agreement and understanding of the Parties as to the subject matter hereof and supersedes all proposals, oral or written, and all other prior communications between the Parties with respect to such subject matter. In the event of any conflict between a material provision of this Agreement, any Exhibit hereto and/or SOW, the order of precedence shall be as follows: Agreement, the Exhibit and the SOW, unless any such conflict is specifically and expressly identified in the applicable a SOW, in which case, such conflicting provision shall control. Notwithstanding the foregoing, the Quality Agreement shall control with respect to all quality matters.

1.37.Force Majeure. Neither Party will be liable or deemed in default for failure to perform any duty or obligation that such Party may have under this Agreement where such failure has been occasioned by any act of God, fires, earthquakes, strikes and labor disputes, acts of war, terrorism, civil unrest, other factors that affect the supply or procurement of Raw Materials, or intervention of any Governmental Authority (“Force Majeure”), and which is beyond its reasonable control; provided that the Party affected will [***].

1.38.Cumulative Remedies. Except as otherwise set forth in this Agreement, no remedy referred to in this Agreement is intended to be exclusive, but each will be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under Applicable Law.

1.39.Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, any rule of construction that any ambiguity in this Agreement will be construed against the drafting Party will not apply.

1.40.Construction; Rules of Construction. Interpretation of this Agreement will be governed by the following rules of construction: (a) words in the singular will be held to include the plural and vice versa, and words of one gender will be held to include the other gender as the context requires; (b) references to the terms “Section,” or “clause” are to a Section of this Agreement unless otherwise specified; (c) the terms “hereof,” “hereby,” “hereto,” and derivative or clause or similar words refer to this entire Agreement; (d) the

27

word “including” and words of similar import when used in this Agreement will mean “including without limitation,” unless otherwise specified; (e) the word “or” will not be exclusive; (f) references to “written” or “in writing” include in electronic form; (g) the titles and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement; (h) the word “will” will be construed to have the same meaning and effect as the word “shall”; (i) references to “days” will mean calendar days, unless otherwise specified; and (j) a reference to any Person includes such Person’s successors and permitted assigns.

1.41.Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. This Agreement may be executed by facsimile, PDF format via email or other electronically transmitted signatures and such signatures will be deemed to bind each Party as if they were original signatures.

[Signature page follows on the next page]

28

In Witness Whereof, the Parties have caused this Agreement to be executed by their respective duly authorized officers as of the Effective Date.

SERUM LIFESCIENCES LIMITED

By: [***]    

(Signature)

Name: [***]    

Title: [***]    

NOVAVAX, INC.

By: /s/ John A. Herrmann III    

(Signature)

Name: John A. Herrmann III    

Title: EVP, CLO    

29

EXHIBIT A

FACILITIES

[Pursuant to Regulation S-K, Item 601(a)(5), this Appendix setting forth facilities rights has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted appendixes to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]

[***]

30

EXHIBIT B

SUBCONTRACTORS

[Pursuant to Regulation S-K, Item 601(a)(5), this Appendix setting forth the list of subcontractors has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted appendixes to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]

[***]

31

EX-10.4

Exhibit 10.4

CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

AMENDMENT NO. 1 TO THE CONTRACT DEVELOPMENT MANUFACTURE AGREEMENT

BETWEEN

NOVAVAX, INC

AND

SERUM LIFE SCIENCES LIMITED

Page 1 of #NUM_PAGES#

This Amendment No. 1 (“Amendment No. 1”) to the Contract Development Manufacture Agreement, dated 21st, October 2021 (“CDMA”), is entered into and made effective as of 2022 (“Effective Date of Amendment No. 1”), by and between Novavax, Inc., a Delaware USA corporation having a place of business at 21 Firstfield Rd., Gaithersburg, MD 20878 and Serum Life Sciences Limited, a company duly incorporated having its registered office situated in England and Wales, formerly known as Covicure Holdings Limited having its principal office at 15 Grosvenor Street, London, W1K 4QZ, United Kingdom (“SLS”).

Novavax and SLS may each be referred to herein individually as a “Party” and collectively as the “Parties.” Capitalized terms not otherwise defined in this Amendment No. 1 shall have the meanings respectively ascribed to them in the CDMA.

RECITALS

WHEREAS, the Parties have entered into a Contract Development Manufacture Agreement, dated 21st, October 2021 (hereinafter “CDMA”) to govern SLS’ Development, Manufacture and supply (itself or through one or more Affiliates or Subcontractors) of Novavax’ requirements for Drug Product(s) for further commercial use and sale by Novavax in the Territory;

AND WHEREAS, the Parties wish to amend the CDMA to clarify certain terms, including without limitation, terms relating to title and risk of loss of Novavax Supplied Items;

AND WHEREAS, in accordance with Clause 13.6 of the CDMA, the Parties hereto desire to amend and modify the CDMA in accordance with the terms and subject to the conditions set forth in this Amendment No. 1.

NOW THEREFORE, the Parties agree as follows:

1.Clause 2.4. In Clause 2.4, the sentence, “Title to Novavax Supplied Items shall transfer to [***] and [***] shall have all risk of loss or damage to all Novavax Supplied Items [***].”, shall be deleted and replaced by the following sentence:

“Unless set forth otherwise in the applicable SOW, title and risk of loss of Novavax Supplied Items shall [***] unless any loss or damage is due to the gross negligence or willful misconduct of [***], in which case [***] shall bear the cost (including any indirect taxes thereon, including but not limited to, which may be applicable in the hands of [***]) incurred by [***] for such Novavax Supplied Items.”

2.Clause 7.4.2. The following sentence shall be added to the end of Clause 7.4.2:

“For the purposes of this Agreement, “Covenant Beneficiary” means Novavax or any of Novavax’ Affiliates, or any of its or their direct or indirect licensees, sublicensees, importers, exporters, suppliers, manufacturers, distributors, contractors, agents, or customers.”

3.The Parties agree and accept that throughout the CDMA, wherever the SLS’ office address has been referenced as “12 New Fetter Lane, London, United Kingdom, EC4A 1JP’’ and including, namely in the following sections or clauses -

a.On the Second Page of the CDMA (name clause), and

b.Clause 13.9 of the CDMA on page 27.

Page 2 of #NUM_PAGES#

then, each such reference to “12 New Fetter Lane, London, United Kingdom, EC4A 1JP” for the SLS’s office address shall be amended and replaced with the following-

“15 Grosvenor Street, London, W1K 4QZ, United Kingdom”.

4.Except as expressly set forth hereinabove, all of the terms and conditions of the CDMA remain unchanged and are in full force and effect and shall supersede any conflicting terms of this Amendment No. 1.

5.This Amendment No. 1 may only be modified by a written document, signed by the duly authorized representatives of each Parties.

6.This Amendment No; 1 may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. This Amendment No. 1 may be executed by facsimile, PDF format via email or other electronically transmitted signatures and such signatures will be deemed to bind each Party as if they were original signatures.

[Signature page to follow]

Page 3 of #NUM_PAGES#

IN WITNESS WHEREOF, the Parties have caused this Amendment No. 1 to be executed by their respective duly authorized officers as of the Effective Date of Amendment No. 1.

NOVAVAX, INC.

By: /s/ John A. Herrmann III    

(Signature)

Name: John A. Herrmann III    

Title: EVP, CLO    

29 April, 2022

SERUM LIFE SCIENCES LIMITED

By: [***] 29/04/2022    

(Signature)

Name: [***]    

Title: [***]    

Page 4 of #NUM_PAGES#

EX-10.5

Exhibit 10.5

CERTAIN INFORMATION IDENTIFIED WITH [***] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

STATEMENT OF WORK #1
to the
CONTRACT DEVELOPMENT MANUFACTURE AGREEMENT
between
SERUM LIFE SCIENCES LIMITED
and
NOVAVAX, INC.

THIS STATEMENT OF WORK No. 1 (“SOW No. 1”) is made, effective as of 29, April 2022 (“Effective Date of SOW No. 1”) by and between Serum Life Sciences Limited (“SLS”), a company duly incorporated having its registered office situated in England and Wales, formerly known as Covicure Holdings Limited having its principal office at 15 Grosvenor Street, London, W1 K 4QZ, United Kingdom, and Novavax, Inc., a Delaware USA corporation having a place of business at 21 Firstfield Rd., Gaithersburg, MD 20878 (“Novavax”) and is incorporated as an integral part of the Contract Development Manufacture Agreement dated October 21, 2021, as amended from time to time, (hereinafter referred to as the “Agreement”) and entered into between the Parties. SLS and Novavax may each be referred to, individually, as a “Party” or, collectively, as the “Parties.”

WHEREAS, the Parties have entered into the Agreement to govern SLS’ Development, Manufacture and supply (itself and/or through one or more Affiliates or Subcontractors) of Novavax’ requirements of Drug Products for further commercial use and sale by Novavax in the Territory; and

WHEREAS, in the Agreement, the Parties have agreed to execute, as required, mutually agreed upon Statements of Work (“SOWs”) to set forth the scope of the project, general statement of stages and activities, pricing, the schedule of milestones, deliverables and payments and other pertinent information, in order to prepare for, initiate and conduct the Services, including, as applicable, the project plan, Technology Transfer and Process Development for and Manufacture of the applicable Drug Product; and

WHEREAS, accordingly, the Parties now intend to execute this SOW No. 1, which is made an integral part of the Agreement from the Effective Date of SOW No. 1; and

WHEREAS, capitalized terms used in this SOW No. 1 will have the same meaning as set forth in the Agreement unless otherwise defined herein.

NOW THEREFORE, in consideration of the mutually agreed terms and conditions and covenants herein and in the Agreement, the sufficient of which the Parties acknowledge, the Parties agree as follows:

1.Scope of Work

1.1SLS shall (either itself or through its Affiliates or Subcontractors): (i) receive from Novavax and properly store Antigen and Adjuvant, including other Novavax Supplied Items, for use in the Manufacture by SLS of Drug Product NVX-CoV2373; (ii) SLS to perform aseptic Manufacturing of Drug Product in [***] vials, including process performance qualification (“PPQ”) and commercial scale Manufacturing based on Novavax defined Specifications; (iii) undertake

1

secondary commercial packaging in respect of the Manufactured Drug Product based on Novavax defined Specifications, (iv) procure all Raw Materials required for such activities; (v) perform testing required for release of the Manufactured and packaged Drug Product; and (vi) store and Deliver the packaged Drug Product outside India at a location as preferred and instructed by Novavax.

2.Responsibilities and Activities of Parties

2.1Novavax’ Responsibilities and Activities include:

2.1.1Provide the Novavax Supplied Items for Manufacture.

2.1.2Transfer, including Technology Transfer, of methods and process knowledge essential to Manufacture of Drug Product based on the Specifications provided.

2.1.3Provide formulation strategy and Specifications.

2.1.4Transfer of test methods required for release of Manufactured Drug Product.

2.1.5Provide secondary packaging artwork and label text, specific to all applicable end markets, for commercial packaging of Drug Product to be done by SLS.

2.1SLS’ Responsibilities and Activities include:

2.2.1Pursuant to Section 5 below, secure an ongoing supply of the Raw Materials necessary for Manufacture and secondary packaging of Drug Product, pursuant to Novavax’ Initial Forecast and [***] Updated Forecast and associated Purchase Orders.

2.2.2[***] upon its receipt of any Novavax Supplied Items, SLS shall label and inventory the Novavax Supplied Items as distinct and separate from any other inventory maintained by SLS (whether for purposes of this SOW No. 1 or any other SOW or other agreement with Novavax or any other entity). Such inventory shall be available for review and audit by Novavax on a [***]. Additionally, SLS shall provide [***] assistance, including records and reporting, as required, in order to allow Novavax to satisfy its requirements under US GAAP.

2.2.3Manufacture of Drug Product will be performed on a commercial scale upon the successful completion of start-up activities (engineering run(s), small scale GMP runs, and PPQ batches), based on parameters agreed by the Parties.

    2

2.2.3.1Associated start-up activities SLS to be responsible for, as deliverables to Novavax, include:

Technical risk assessment.

Provision of Master Batch Record.

Provision of PPQ protocol.

2.2.4Drug Product will be formulated based on a mutually defined and agreed to strategy, including the Specifications provided by Novavax.

2.2.5Carry out manufacture at Batch size and scale defined and approved by Novavax. Current validated range of up to [***] per Batch.

2.2.6Manage time out of refrigeration (“TOR”) for formulated Drug Product at a level below the Novavax recommended TOR threshold of [***], unless otherwise agreed in writing between the Parties. TOR to be documented in the Master Batch Record.

3.Specifications: See Annex 1.

4.Novavax Supplied Items. Novavax shall supply Antigen and Adjuvant Components for use in Manufacture of Drug Product.

5.Raw Materials. SLS shall provide the Raw Materials set forth in the regulatory filings supporting the applicable Regulatory Approval(s).

6.Milestones and Deliverables.

6.1SLS to commence commercial Manufacturing based on the Initial Forecast and periodic Updated Forecast, and associated Purchase Orders, provided by Novavax’ Supply Chain Planning, carried out upon associated regulatory approvals. SLS will provide an ongoing schedule to Novavax confirming anticipated release of Product consistent with the Delivery Date specified in a Purchase Order, to support Novavax arrangement of shipments of Product.

6.2SLS, either itself or through its Affiliates or Subcontractors, will [***] notify Novavax if SLS is aware that it will be unable to meet any deadline for Release of a Batch or any other milestone or deliverable.

7.Initial Forecast; Purchase Orders

The Initial Forecast is set forth in Annex 2. Initial Forecast is conditional to the final formulation strategy determined by SLS and Novavax (impacts to dosage outputs), the projected output of Novavax’ drug substance supply, and the securing of all needed import licenses by SLS to enable shipment of Novavax Supplied Items.

Novavax will issue Batch specific Purchase Orders (PO), and SLS’ invoices shall be submitted per Batch with reference to the appropriate PO.

    3

8.Delivery Terms

Incoterms based on activity related to this SOW No. 1:

8.1Novavax Supplied Items:

8.1.1Novavax shall deliver Novavax Supplied Items [***], provided that title and risk of loss to Novavax Supplied Items [***].

8.1.2[***] are responsible for obtaining import licenses as needed to support the program, as well as act as the Importer of Record (IOR).

8.2Finished Drug Product for Novavax customers:

8.2.1SLS shall (either itself or through its Affiliates or Subcontractors) ship Drug Product [***].

8.2.2[***] shall [***] be responsible for the exportation clearance and process and act as Exporter of Record.

9.Pricing; Storage Fee

9.1Service Fee and Incentive Fee. The price per dose of Drug Product Delivered under this SOW No.1 (“Drug Product Dose”) shall be [***] (the “Service Fee”) plus [***] (the “Incentive Fee”). The Service Fee shall be due and payable upon Delivery of the Drug Product Dose in accordance with the terms and conditions of the Agreement, including, but not limited to, Section 6.1.1 of the Agreement. The Incentive Fee shall be paid in accordance with Section 9.1.2 below.

9.1.1“Net Sales Price” means [***]

9.1.2Incentive Fee Payment. Any Incentive Fee Amount(s) payable under this SOW No.1 shall be calculated [***] as of [***] (each a “Incentive Fee Payment”). Novavax shall submit the Incentive Fee Payment together with the delivery of a written sales report to SLS within [***] that show Net Sales of Drug Product Doses recognized during such [***], stating gross sales (including number of doses, price per dose, Net Sales Price(s), and reasonable details relating to the deductions made in determining Incentive Fee Amount(s)). All such Incentive Fee Payments shall be made in [***]. For the purpose of computing the Net Sales sold in a currency other than [***], such currency shall be converted from local currency to [***] by Novavax in accordance with the rates of exchange for the relevant month for converting such other currency into [***] used by Novavax’ internal accounting systems.

9.2If storage is needed as provided for in Section 4.4.3 of the Agreement, then SLS shall invoice Novavax on [***] basis for all actual reasonable costs and expenses incurred in storing such Drug Products.

    4

10.Quantity of Drug Product Doses. Under this SOW No.1, Novavax hereby commits to purchase and SLS hereby, subject to the terms of the Agreement, agrees to Manufacture or have Manufactured, and supply the quantity of Drug Product Doses as specified in each Purchase Order issued hereunder; provided, however, that the aggregate quantity under this SOW No. 1 shall not exceed eighty million (80,000,000) Drug Product Doses.

11.Miscellaneous

11.1The delay or failure by Novavax in obtaining any import or other authorizations, which Novavax is required hereunder to obtain for the Delivery of Drug Product pursuant to this SOW No. 1, may affect the timing of Delivery by SLS. Accordingly, to the extent such delay or failure by Novavax is the direct cause of a delay in Delivery by SLS despite its use of [***], such delay in Delivery by SLS shall not be construed as a breach of this SOW No. 1 by SLS or its Affiliates or Subcontractors.

11.2The Term of this SOW No. 1 shall commence from the Effective Date of SOW No. 1 and shall thereafter continue for a period of one (1) year unless terminated or extended as per the mutual agreement between the Parties.

11.3All terms and conditions of this SOW No. 1 shall be read conjunctively and harmoniously with the Agreement and Quality Agreement, and, except as expressly stated to the contrary herein, all terms and conditions of the Agreement shall continue to apply to this SOW No. 1. Further, any conflict between the terms of the Agreement and this SOW No.1, then the terms of the Agreement shall take precedence.

11.4This SOW No. 1 may only be modified by a written document, signed by the duly authorized representatives of both Parties.

11.5Subject to clause 5.4 of the Agreement, Novavax will have restricted access to the Drug Product manufacturing facilities and storage locations used by SLS for the purposes of this SOW No. 1.

[Signature Page Follows this Page]

    5

IN WITNESS WHEREOF, the Parties have caused this SOW No. 1 to be executed by their respective duly authorized officers as of the Effective Date of SOW No. 1.

NOVAVAX, INC.	SERUM LIFE SCIENCES LIMITED
By: /s/ John A. Herrmann III	By: [***]
Name: John A. Herrmann III	Name: [***]
Title: EVP, CLO, BD	Title: [***]
Date: 29 April 2022	Date: 29/04/2022

6

ANNEX 1

Drug Product Specifications

[Pursuant to Regulation S-K, Item 601(a)(5), this Appendix setting forth drug product specifications has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted appendixes to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]

[***]

    7

ANNEX 2

Initial Forecast

[Pursuant to Regulation S-K, Item 601(a)(5), this Appendix setting forth the initial forecast has not been filed. The Registrant agrees to furnish supplementally a copy of any omitted appendixes to the Securities and Exchange Commission upon request; provided, however, that the Registrant may request confidential treatment of omitted items.]

[***]

    8

EX-31.1

    Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Stanley C. Erck, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Novavax, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

e)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

f)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2022	By:	/s/ Stanley C. Erck
		Stanley C. Erck
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, James P. Kelly, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Novavax, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2022	By:	/s/ James P. Kelly
		James P. Kelly
		Executive Vice President, Chief
		Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT

TO 18 UNITED STATES CODE §1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Novavax, Inc. (the “Company”) on Form 10-Q for the fiscal period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stanley C. Erck, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by this Report.

Date: August 8, 2022	By:	/s/ Stanley C. Erck
		Stanley C. Erck
		President and Chief Executive Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 UNITED STATES CODE §1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Novavax, Inc. (the “Company”) on Form 10-Q for the fiscal period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James P. Kelly, Executive Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by this Report.

Date: August 8, 2022	By:	/s/ James P. Kelly
		James P. Kelly
		Executive Vice President, Chief
		Financial Officer and Treasurer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2022	Jul. 31, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
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 (in shares)		78,215,105
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001000694
Current Fiscal Year End Date	--12-31

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenue:
Revenues	$ 185,925	$ 298,017	$ 889,896	$ 745,246
Expenses:
Cost of sales	271,077	0	286,281	0
Research and development	289,648	570,685	673,131	1,163,356
Selling, general, and administrative	108,160	73,161	204,152	136,351
Total expenses	668,885	643,846	1,163,564	1,299,707
Income (loss) from operations	(482,960)	(345,829)	(273,668)	(554,461)
Other income (expense):
Interest expense	(6,234)	(5,968)	(11,110)	(10,807)
Other income (expense)	(19,873)	3,028	(18,219)	(3,203)
Income (loss) before income tax expense	(509,067)	(348,769)	(302,997)	(568,471)
Income tax expense	1,418	3,548	4,080	6,565
Net loss	$ (510,485)	$ (352,317)	$ (307,077)	$ (575,036)
Net income (loss) per share:
Basic (in usd per share)	$ (6.53)	$ (4.75)	$ (3.97)	$ (7.82)
​Weighted average number of common shares outstanding
Basic (in shares)	78,143	74,118	77,305	73,580
Product sales
Revenue:
Revenues	$ 55,455	$ 0	$ 641,083	$ 0
Grants
Revenue:
Revenues	107,774	272,489	207,075	719,382
Royalties and other
Revenue:
Revenues	$ 22,696	$ 25,528	$ 41,738	$ 25,864

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Comprehensive Income [Abstract]
Net loss	$ (510,485)	$ (352,317)	$ (307,077)	$ (575,036)
Other comprehensive income (loss):
Net unrealized losses on marketable securities available-for-sale, net of reclassifications	0	0	0	(9)
Foreign currency translation adjustment	(9,558)	4,527	(9,517)	(2,845)
Other comprehensive income (loss)	(9,558)	4,527	(9,517)	(2,854)
Comprehensive loss	$ (520,043)	$ (347,790)	$ (316,594)	$ (577,890)

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 1,375,587,000	$ 1,515,116,000
Restricted cash	10,274,000	11,490,000
Accounts receivable	194,533,000	454,993,000
Inventory	256,301,000	8,872,000
Prepaid expenses and other current assets	299,307,000	164,648,000
Total current assets	2,136,002,000	2,155,119,000
Property and equipment, net	254,526,000	228,696,000
Right of use asset, net	85,770,000	40,123,000
Intangible assets, net	4,033,000	4,770,000
Goodwill	123,467,000	131,479,000
Other non-current assets	19,195,000	16,566,000
Total assets	2,622,993,000	2,576,753,000
Current liabilities:
Accounts payable	386,488,000	127,050,000
Accrued expenses	585,646,000	673,731,000
Deferred revenue	701,518,000	1,422,944,000
Current portion of finance lease liabilities	124,260,000	130,533,000
Convertible notes payable	324,169,000	0
Other current liabilities	34,158,000	36,061,000
Total current liabilities	2,156,239,000	2,390,319,000
Deferred revenue	814,629,000	172,528,000
Convertible notes payable	0	323,458,000
Other non-current liabilities	69,075,000	42,121,000
Total liabilities	3,039,943,000	2,928,426,000
Commitments and contingencies (Note 14)
Stockholders' equity (deficit):
Common stock, $0.01 par value, 600,000,000 shares authorized at June 30, 2022 and December 31, 2021; and 78,776,234 shares issued and 78,166,935 shares outstanding at June 30, 2022 and 76,433,151 shares issued and 75,841,171 shares outstanding at December 31, 2021	788,000	764,000
Additional paid-in capital	3,604,614,000	3,351,967,000
Accumulated deficit	(3,925,027,000)	(3,617,950,000)
Treasury stock, cost basis, 609,299 shares at June 30, 2022 and 591,980 shares at December 31, 2021	(86,455,000)	(85,101,000)
Accumulated other comprehensive loss	(10,870,000)	(1,353,000)
Total stockholders’ deficit	(416,950,000)	(351,673,000)
Total liabilities and stockholders’ deficit	$ 2,622,993,000	$ 2,576,753,000

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
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)	78,776,234	76,433,151
Common stock, shares outstanding (in shares)	78,166,935	75,841,171
Treasury stock, shares (in shares)	609,299	591,980

XML

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 Income (Loss)
Balance beginning (in shares) at Dec. 31, 2020		71,350,365
Balance beginning at Dec. 31, 2020	$ 627,209	$ 714	$ 2,535,476	$ (1,874,199)	$ (41,806)	$ 7,024
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	106,183		106,183
Stock issued under incentive programs (in shares)		743,019
Issuance of common stock, net of issuance costs	25,201	$ 7	30,593		(5,399)
Issuance of common stock, net of issuance costs (in shares)		2,578,967
Issuance of common stock, net of issuance costs	564,859	$ 26	564,833
Unrealized loss on marketable securities	(9)					(9)
Foreign currency translation adjustment	(2,845)					(2,845)
Net income	(575,036)			(575,036)
Balance ending (in shares) at Jun. 30, 2021		74,672,351
Balance ending at Jun. 30, 2021	745,562	$ 747	3,237,085	(2,449,235)	(47,205)	4,170
Balance beginning (in shares) at Mar. 31, 2021		74,470,583
Balance beginning at Mar. 31, 2021	1,039,127	$ 745	3,180,114	(2,096,918)	(44,457)	(357)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	53,123		53,123
Stock issued under incentive programs (in shares)		201,768
Issuance of common stock, net of issuance costs	1,102	$ 2	3,848		(2,748)
Foreign currency translation adjustment	4,527					4,527
Net income	(352,317)			(352,317)
Balance ending (in shares) at Jun. 30, 2021		74,672,351
Balance ending at Jun. 30, 2021	745,562	$ 747	3,237,085	(2,449,235)	(47,205)	4,170
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]
Issuance of common stock, net of issuance costs (in shares)		2,200,000
Issuance of common stock, net of issuance costs			179,000
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, 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	70,981		70,981
Stock issued under incentive programs (in shares)		145,685
Issuance of common stock, net of issuance costs	951	$ 2	2,303		(1,354)
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	(9,517)					(9,517)
Net income	(307,077)			(307,077)
Balance ending (in shares) at Jun. 30, 2022		78,776,234
Balance ending at Jun. 30, 2022	(416,950)	$ 788	3,604,614	(3,925,027)	(86,455)	(10,870)
Balance beginning (in shares) at Mar. 31, 2022		78,722,337
Balance beginning at Mar. 31, 2022	65,324	$ 787	3,566,292	(3,414,542)	(85,901)	(1,312)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	38,048		38,048
Stock issued under incentive programs (in shares)		53,897
Issuance of common stock, net of issuance costs	(279)	$ 1	274		(554)
Foreign currency translation adjustment	(9,558)					(9,558)
Net income	(510,485)			(510,485)
Balance ending (in shares) at Jun. 30, 2022		78,776,234
Balance ending at Jun. 30, 2022	$ (416,950)	$ 788	$ 3,604,614	$ (3,925,027)	$ (86,455)	$ (10,870)

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Statement of Stockholders' Equity [Abstract]
Issuance of common stock, issuance costs	$ 2,311	$ 5,145

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Operating Activities:
Net loss	$ (307,077)	$ (575,036)
Reconciliation of net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	13,485	4,727
Non-cash stock-based compensation	70,981	106,183
Provision for excess and obsolete inventory	155,662	0
Right-of-use assets expensed, net of credits received	(3,291)	12,707
Other items, net	(642)	3,855
Changes in operating assets and liabilities:
Inventory	(403,725)	0
Accounts receivable, prepaid expenses, and other assets	112,845	193,004
Accounts payable, accrued expenses, and other liabilities	179,158	115,212
Deferred revenue	(76,809)	946,845
Net cash provided by (used in) operating activities	(259,413)	807,497
Investing Activities:
Capital expenditures	(41,402)	(28,932)
Purchases of marketable securities	0	(2,167)
Proceeds from maturities and sale of marketable securities	0	159,807
Net cash provided by (used in) investing activities	(41,402)	128,708
Financing Activities:
Net proceeds from sales of common stock	179,385	564,859
Net proceeds from the exercise of stock-based awards	1,050	26,903
Finance lease payments	(15,911)	(53,618)
Net cash provided by financing activities	164,524	538,144
Effect of exchange rate on cash, cash equivalents, and restricted cash	(4,453)	(348)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(140,744)	1,474,001
Cash, cash equivalents, and restricted cash at beginning of period	1,528,259	648,738
Cash, cash equivalents, and restricted cash at end of period	1,387,515	2,122,739
Supplemental disclosure of non-cash activities:
Right-of-use assets from new lease agreements	69,366	28,826
Capital expenditures included in accounts payable and accrued expenses	17,890	11,037
Supplemental disclosure of cash flow information:
Cash interest payments	8,604	10,046
Cash paid for income taxes	$ 17,778	$ 3,017

XML

Organization and Business

6 Months Ended

Jun. 30, 2022

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 coronavirus vaccine, NVX-CoV2373, and its lead influenza vaccine candidate, a quadrivalent influenza vaccine, previously known as NanoFlu, are genetically engineered, three-dimensional nanostructures of recombinant proteins critical to disease pathogenesis and may elicit differentiated immune responses, which may be more efficacious than naturally occurring immunity or traditional vaccines. NVX-CoV2373 and the Company’s influenza vaccine include the use of the Company's proprietary Matrix-M™ adjuvant. The Company is developing various variant vaccines, including for Omicron subvariants, and bivalent formulations with prototype vaccine (NVX-CoV2373). The Company has announced preclinical boosting data for NVX-CoV2373, NVX-CoV2515, and bivalent formulations which demonstrated strong antibody levels. The Company is also participating in an ongoing Phase 3 strain change trial to assess safety and antibody responses following primary vaccination with mRNA vaccines.

As of June 30, 2022, the Company had received approval, interim authorization, provisional approval, conditional marketing authorization, and emergency use authorization (“EUA”) from multiple regulatory authorities globally for NVX-CoV2373, including by the World Health Organization (“WHO”), as well as the European Medicines Agency's (“EMA”) and the United Kingdom's Medicines and Healthcare products Regulatory Agency (“MHRA”), both of which are considered regulatory authorities that apply stringent standards and meet the WHO standards for quality, safety, and efficacy in their regulatory review process. In July 2022, the Company received emergency use authorization for NVX-CoV2373 from the U.S. Food and Drug Administration (“FDA”).

The Company commenced commercial shipments of NVX-CoV2373 doses under the brand name Nuvaxovid™ in 2022.

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

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, respectively, 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 income included a foreign currency translation loss of $10.9 million and $1.4 million as of June 30, 2022 and December 31, 2021, respectively.

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, 2021. 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.

Reclassifications

Certain amounts reported in prior periods have been reclassified to conform to current period financial statement presentation. These reclassifications have no material effect on previously reported financial position, cash flows, or results of operations.

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 - Product Sales

Product sales are associated with the Company’s NVX-CoV2373 supply agreements, sometimes referred to as advance purchase agreements (“APAs”), with various international governments. The Company recognizes revenue from product sales based on the transaction price per dose calculated in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) when control of the product transfers to the customer and customer acceptance has occurred, unless such acceptance provisions are deemed perfunctory. If an APA includes a term that may have the effect of decreasing the price per dose of previously delivered shipments, the Company constrains the price until it is probable that a significant reversal in revenue recognized will not occur.

Cost of Sales

Cost of sales includes cost of raw materials, production, and manufacturing overhead costs associated with the Company’s product sales during the period. Cost of sales also includes adjustments for excess, obsolete, or expired inventory; idle capacity; and losses on firm purchase commitments to the extent the cost cannot be recovered based on estimates about future demand. Cost of sales does not include certain expenses related to raw materials, production, and manufacturing overhead costs which were expensed prior to regulatory authorization as described under the caption “Inventory” below.

Inventory

Inventory is recorded at the lower of cost or net realizable value under the First In, First Out (“FIFO”) methodology, taking into consideration the expiration of the inventory item. The Company determines the cost of raw materials using moving average costs and the cost of semi-finished and finished goods using a standard cost method adjusted on a periodic basis to reflect the deviation in the actual cost from the standard cost estimate. Standard costs consist primarily of the cost of manufacturing goods, including direct materials, direct labor, the services and products of third-party suppliers, and the application of manufacturing overhead. The Company utilizes third-party contract manufacturing organizations (“CMOs”), contract development and manufacturing organizations (“CDMOs”), and other suppliers and service organizations to support the procurement and processing of raw materials, management of inventory, packaging, and the delivery process. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolete, or expired inventory through cost of sales.

Prior to initial regulatory authorization for its product candidates, the Company expenses costs relating to raw materials, production, and manufacturing overhead costs as research and development expenses in the consolidated statements of operations, in the period incurred. Subsequent to initial regulatory authorization for a product candidate, the Company capitalizes the costs of production for a particular supply chain as inventory when the Company determines that it has a present right to the economic benefit associated with the product.

Recent Accounting Pronouncements

Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) 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” (“CECL”) 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 ASU is effective for the Company beginning on January 1, 2023. Management is currently evaluating the effect of the guidance and does not expect it to have a material impact on the Company’s consolidated financial statements.

Adopted

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplified the accounting for certain financial instruments with characteristics of liabilities and equity, including certain convertible instruments and contracts in an entity’s own equity. Specifically, the new standard removed the separation models required for convertible debt with cash conversion features and convertible instruments with beneficial conversion features. It also removed certain settlement conditions that are currently required for equity contracts to qualify for the derivative scope exception and simplified the diluted earnings per share calculation for convertible instruments. The Company adopted ASU 2020-06 on January 1, 2022 using a modified retrospective approach, which did not have a material impact on the Company’s consolidated financial statements.

XML

Revenue

6 Months Ended

Jun. 30, 2022

U.S. Government Agreements, Grants and Licenses

Revenue

Revenue

The Company's accounts receivable included $165.6 million and $419.7 million related to amounts that were billed to customers and $29.0 million and $35.3 million related to amounts which had not yet been billed to customers as of June 30, 2022 and December 31, 2021, respectively. During the six months ended June 30, 2022, changes in the Company's accounts receivables and deferred revenue balances were as follows (in thousands):

	December 31, 2021		Additions	Deductions	June 30, 2022
Contract receivables:
Accounts receivable	$	454,993	808,713	(1,069,173)	$	194,533
Contract liabilities:
Deferred revenue(1)	$	1,595,472	49,107	(128,432)	$	1,516,147

(1)    Amount is comprised of $701.5 million and $1.4 billion of current Deferred revenue and $814.6 million and $172.5 million of non-current Deferred revenue as of June 30, 2022 and December 31, 2021, respectively.

The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties, was approximately $5 billion as of June 30, 2022. 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 under certain of our APAs. Failure to meet regulatory milestones, product volume, or delivery timing obligations under the Company’s APA agreements may require the Company to refund portions of upfront payments or result in reduced future payments, which could result in a material and adverse effect on our unsatisfied performance obligations. The remaining unfilled performance obligations not related to grant agreements or APAs are expected to be fulfilled in less than 12 months.

Grants

The Company recognized grant revenue as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
U.S. government partnership (“OWS”)	$	107,774	$	239,493	$	207,075	$	603,053
U.S. Department of Defense (“DoD”)	—		1,041		—		20,185
Coalition for Epidemic Preparedness Innovations (“CEPI”)	—		31,955		—		93,516
Bill & Melinda Gates Foundation (“BMGF”)	—		—		—		2,628
Total grant revenue	$	107,774	$	272,489	$	207,075	$	719,382

U.S. Government Partnership

The Company’s U.S. government partnership consists of an agreement (“the “OWS 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 (“OWS”). In July 2021, the U.S. government instructed the Company to prioritize alignment with the FDA on the Company's analytic methods before conducting additional U.S. manufacturing and further indicated that the U.S. government would not fund additional U.S. manufacturing until such alignment was made. In June 2022, the U.S. government agreed to the manufacture and delivery of approximately 3 million doses of NVX-CoV2373 under the OWS Agreement as the Company had completed alignment with the FDA’s analytic methods. The Company updated its estimate-at-completion to reflect the impact of this authorization to the recognition of the fixed fee under the contract. In July 2022, the Company formally modified the OWS Agreement to provide for an initial delivery to the U.S. government of approximately 3 million doses of NVX-CoV2373, and the Company modified its existing agreement with the U.S. Department of Defense (“DoD”) to provide for an initial delivery of approximately 0.2 million doses of NVX-CoV2373 (see Note 15).

Royalties and Other

During the three and six months ended June 30, 2022, the Company recognized $1.7 million and $9.2 million, respectively, in revenue related to sales-based royalties. During the three months ended June 30, 2022, the Company recognized a $20.0 million milestone payment upon the first sale of NVX-CoV2373 in Japan. During the three months ended June 30, 2021, the Company recognized $23.5 million in revenue related to sales-based royalties. During the three months ended March 31, 2021, the Company did not recognize any revenue related to sales-based royalties.

Advance Purchase Agreements (APAs)

Under the terms of the Company’s contracted supply commitment with Gavi, which includes the supply obligation of its licensed partner, Serum Institute of India Private Limited (“SIIPL”), 1.1 billion doses of NVX-CoV2373 are to be made available to countries participating in the COVAX Facility, which was established to allocate and distribute vaccines equitably to participating countries and economies. The Novavax portion is a supply agreement that contemplates that the Company will manufacture and distribute 350 million doses. Under that agreement with Gavi, the Company received an upfront payment of $350 million from Gavi in 2021 and an additional payment of $350 million in the first quarter of 2022 related to the Company’s achieving WHO Emergency Use Listing. Although Novavax is prepared to deliver the quantities of NVX-CoV2373 doses to Gavi under the terms of the supply agreement, the Company was notified by Gavi of its intent to seek to revise the number and timing of doses of NVX-CoV2373 supplied by Novavax under such agreement. Furthermore, Gavi may seek partial or full recovery of the prior nonrefundable payments it has made to Novavax. The Company’s position is that Gavi has no contractual right to recover prior nonrefundable payments. To date, Novavax has not received an order from Gavi and the timing and quantities of future orders to deliver NVX-CoV2373 to the COVAX facility are unclear.

Under the terms of the Company’s SARS-CoV-2 Vaccine Supply Agreement, originally entered into in October 2020 (the “Original UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), the Authority agreed to purchase 60 million doses of NVX-CoV2373. In July 2022, the Company entered into an Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (the “Amended and Restated UK Supply Agreement”) with the Authority, under which the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses of NVX-CoV2373, with the number of additional doses contingent on the Company’s timely achievement of supportive recommendations from the Joint Committee on Vaccination and Immunisation (the “JCVI”) (see Note 15).

The Company has an APA with the European Commission (“EC”) acting on behalf of various European Union member states to supply a minimum of 20 million and up to 100 million initial doses of NVX-CoV2373, with the option for the EC to purchase an additional 100 million doses up to a maximum aggregate of 200 million doses in one or more tranches, through 2023. The Company is in the process of finalizing a revised delivery schedule for the remaining 42 million doses of the 70 million previously committed doses under the APA that were originally scheduled for delivery during the first and second quarters of 2022. In July and August 2022, the Company was notified by the EC that it was cancelling 5 million doses of its prior commitment originally scheduled for delivery in the first and second quarters of 2022, in accordance with the APA, and reducing the order to 65 million doses (see Note 15).

Collaboration, License, and Supply Agreements

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. SIIPL agreed to purchase the Company’s Matrix-MTM 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 Serum Life Sciences Limited (“SLS”) under which SIIPL and SLS supply the Company with NVX-CoV2373 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. The Company has expanded its license and supply arrangements with SIIPL to include its proprietary COVID-19 variant antigen candidate(s) so that SIIPL can manufacture and commercialize a vaccine targeting COVID-19 variants, including the Omicron subvariants, and supply such variant vaccine to the Company.

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 the Company’s Matrix-M™ adjuvant to manufacture 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 the low to middle double-digit range. During the three months ended June 30, 2022, the Company recognized a milestone payment of $20.0 million upon the first sale in Japan.

SK bioscience, Co., Ltd.

The Company has a collaboration and license agreement with SK bioscience, Co., Ltd. (“SK bioscience”) to manufacture and commercialize NVX-CoV2373 for sale to the governments of Korea, Thailand, and Vietnam. SK bioscience pays a royalty in the low to middle double-digit range. Additionally, the Company has a manufacturing supply arrangement with SK bioscience under which SK bioscience supplies the Company with the antigen component of NVX-CoV2373 for use in the final drug product globally, including product to be distributed by the COVAX Facility, which was established to allocate and distribute vaccines equitably to participating countries and economies. In July 2022, the Company signed an additional agreement with SK bioscience for the technology transfer of the Company’s proprietary COVID-19 variant antigen materials so that SK bioscience can manufacture the drug substance targeting COVID-19 variants, including the Omicron subvariants (see Note 15). The companies also signed an agreement to manufacture and supply the Novavax COVID-19 vaccine in a prefilled syringe.

Other Supply Agreements

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.

XML

Collaboration, License, and Supply Agreements

6 Months Ended

Jun. 30, 2022

Collaborative Arrangement [Abstract]

Collaboration, License, and Supply Agreements

Revenue

The Company's accounts receivable included $165.6 million and $419.7 million related to amounts that were billed to customers and $29.0 million and $35.3 million related to amounts which had not yet been billed to customers as of June 30, 2022 and December 31, 2021, respectively. During the six months ended June 30, 2022, changes in the Company's accounts receivables and deferred revenue balances were as follows (in thousands):

	December 31, 2021		Additions	Deductions	June 30, 2022
Contract receivables:
Accounts receivable	$	454,993	808,713	(1,069,173)	$	194,533
Contract liabilities:
Deferred revenue(1)	$	1,595,472	49,107	(128,432)	$	1,516,147

(1)    Amount is comprised of $701.5 million and $1.4 billion of current Deferred revenue and $814.6 million and $172.5 million of non-current Deferred revenue as of June 30, 2022 and December 31, 2021, respectively.

The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties, was approximately $5 billion as of June 30, 2022. 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 under certain of our APAs. Failure to meet regulatory milestones, product volume, or delivery timing obligations under the Company’s APA agreements may require the Company to refund portions of upfront payments or result in reduced future payments, which could result in a material and adverse effect on our unsatisfied performance obligations. The remaining unfilled performance obligations not related to grant agreements or APAs are expected to be fulfilled in less than 12 months.

Grants

The Company recognized grant revenue as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
U.S. government partnership (“OWS”)	$	107,774	$	239,493	$	207,075	$	603,053
U.S. Department of Defense (“DoD”)	—		1,041		—		20,185
Coalition for Epidemic Preparedness Innovations (“CEPI”)	—		31,955		—		93,516
Bill & Melinda Gates Foundation (“BMGF”)	—		—		—		2,628
Total grant revenue	$	107,774	$	272,489	$	207,075	$	719,382

U.S. Government Partnership

The Company’s U.S. government partnership consists of an agreement (“the “OWS 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 (“OWS”). In July 2021, the U.S. government instructed the Company to prioritize alignment with the FDA on the Company's analytic methods before conducting additional U.S. manufacturing and further indicated that the U.S. government would not fund additional U.S. manufacturing until such alignment was made. In June 2022, the U.S. government agreed to the manufacture and delivery of approximately 3 million doses of NVX-CoV2373 under the OWS Agreement as the Company had completed alignment with the FDA’s analytic methods. The Company updated its estimate-at-completion to reflect the impact of this authorization to the recognition of the fixed fee under the contract. In July 2022, the Company formally modified the OWS Agreement to provide for an initial delivery to the U.S. government of approximately 3 million doses of NVX-CoV2373, and the Company modified its existing agreement with the U.S. Department of Defense (“DoD”) to provide for an initial delivery of approximately 0.2 million doses of NVX-CoV2373 (see Note 15).

Royalties and Other

During the three and six months ended June 30, 2022, the Company recognized $1.7 million and $9.2 million, respectively, in revenue related to sales-based royalties. During the three months ended June 30, 2022, the Company recognized a $20.0 million milestone payment upon the first sale of NVX-CoV2373 in Japan. During the three months ended June 30, 2021, the Company recognized $23.5 million in revenue related to sales-based royalties. During the three months ended March 31, 2021, the Company did not recognize any revenue related to sales-based royalties.

Advance Purchase Agreements (APAs)

Under the terms of the Company’s contracted supply commitment with Gavi, which includes the supply obligation of its licensed partner, Serum Institute of India Private Limited (“SIIPL”), 1.1 billion doses of NVX-CoV2373 are to be made available to countries participating in the COVAX Facility, which was established to allocate and distribute vaccines equitably to participating countries and economies. The Novavax portion is a supply agreement that contemplates that the Company will manufacture and distribute 350 million doses. Under that agreement with Gavi, the Company received an upfront payment of $350 million from Gavi in 2021 and an additional payment of $350 million in the first quarter of 2022 related to the Company’s achieving WHO Emergency Use Listing. Although Novavax is prepared to deliver the quantities of NVX-CoV2373 doses to Gavi under the terms of the supply agreement, the Company was notified by Gavi of its intent to seek to revise the number and timing of doses of NVX-CoV2373 supplied by Novavax under such agreement. Furthermore, Gavi may seek partial or full recovery of the prior nonrefundable payments it has made to Novavax. The Company’s position is that Gavi has no contractual right to recover prior nonrefundable payments. To date, Novavax has not received an order from Gavi and the timing and quantities of future orders to deliver NVX-CoV2373 to the COVAX facility are unclear.

Under the terms of the Company’s SARS-CoV-2 Vaccine Supply Agreement, originally entered into in October 2020 (the “Original UK Supply Agreement”) with The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), the Authority agreed to purchase 60 million doses of NVX-CoV2373. In July 2022, the Company entered into an Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (the “Amended and Restated UK Supply Agreement”) with the Authority, under which the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses of NVX-CoV2373, with the number of additional doses contingent on the Company’s timely achievement of supportive recommendations from the Joint Committee on Vaccination and Immunisation (the “JCVI”) (see Note 15).

The Company has an APA with the European Commission (“EC”) acting on behalf of various European Union member states to supply a minimum of 20 million and up to 100 million initial doses of NVX-CoV2373, with the option for the EC to purchase an additional 100 million doses up to a maximum aggregate of 200 million doses in one or more tranches, through 2023. The Company is in the process of finalizing a revised delivery schedule for the remaining 42 million doses of the 70 million previously committed doses under the APA that were originally scheduled for delivery during the first and second quarters of 2022. In July and August 2022, the Company was notified by the EC that it was cancelling 5 million doses of its prior commitment originally scheduled for delivery in the first and second quarters of 2022, in accordance with the APA, and reducing the order to 65 million doses (see Note 15).

Collaboration, License, and Supply Agreements

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. SIIPL agreed to purchase the Company’s Matrix-MTM 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 Serum Life Sciences Limited (“SLS”) under which SIIPL and SLS supply the Company with NVX-CoV2373 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. The Company has expanded its license and supply arrangements with SIIPL to include its proprietary COVID-19 variant antigen candidate(s) so that SIIPL can manufacture and commercialize a vaccine targeting COVID-19 variants, including the Omicron subvariants, and supply such variant vaccine to the Company.

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 the Company’s Matrix-M™ adjuvant to manufacture 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 the low to middle double-digit range. During the three months ended June 30, 2022, the Company recognized a milestone payment of $20.0 million upon the first sale in Japan.

SK bioscience, Co., Ltd.

The Company has a collaboration and license agreement with SK bioscience, Co., Ltd. (“SK bioscience”) to manufacture and commercialize NVX-CoV2373 for sale to the governments of Korea, Thailand, and Vietnam. SK bioscience pays a royalty in the low to middle double-digit range. Additionally, the Company has a manufacturing supply arrangement with SK bioscience under which SK bioscience supplies the Company with the antigen component of NVX-CoV2373 for use in the final drug product globally, including product to be distributed by the COVAX Facility, which was established to allocate and distribute vaccines equitably to participating countries and economies. In July 2022, the Company signed an additional agreement with SK bioscience for the technology transfer of the Company’s proprietary COVID-19 variant antigen materials so that SK bioscience can manufacture the drug substance targeting COVID-19 variants, including the Omicron subvariants (see Note 15). The companies also signed an agreement to manufacture and supply the Novavax COVID-19 vaccine in a prefilled syringe.

Other Supply Agreements

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.

XML

Cash, Cash Equivalents, and Restricted Cash

6 Months Ended

Jun. 30, 2022

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 the same such amounts shown in the statements of cash flows (in thousands):

	June 30, 2022		December 31, 2021
Cash and cash equivalents	$	1,375,587	$	1,515,116
Restricted cash, current	10,274		11,490
Restricted cash, non-current(1)	1,654		1,653
Cash, cash equivalents, and restricted cash	$	1,387,515	$	1,528,259

(1)Classified as Other non-current assets as of June 30, 2022 and December 31, 2021, on the consolidated balance sheets.

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2022

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 June 30, 2022						Fair Value at December 31, 2021
Assets	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Money market funds(1)	$	500,885	$	—	$	—	$	361,822	$	—	$	—
Government-backed securities(1)	—		179,500		—		—		266,250		—
Corporate debt securities(1)	—		594,750		—		—		790,672		—
Total cash equivalents	$	500,885	$	774,250	$	—	$	361,822	$	1,056,922	$	—
Liabilities
Convertible notes payable	$	—	$	323,112	$	—	$	—	$	447,509	$	—

(1)All investments are classified as cash and cash equivalents as of June 30, 2022 and December 31, 2021, on the consolidated balance sheets.

Cash equivalents are recorded at cost, which approximate fair value due to their short-term nature. Pricing of the Company's Notes (see Note 10) has been estimated using other observable inputs, including the price of the Company's common stock, implied volatility, interest rates, and credit spreads among others.

During the six months ended June 30, 2022 and 2021, the Company did not have any transfers between levels.

XML

Inventory

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Inventory

Inventory

Inventory consisted of the following (in thousands):

	June 30, 2022		December 31, 2021
Raw materials	$	55,154	$	8,872
Semi-finished goods	71,676		—
Finished goods	129,471		—
Total inventory	$	256,301	$	8,872

Inventory write-downs as a result of excess, obsolescence, expiry, or other reasons, and losses on firm purchase commitments are recorded as a component of cost of sales in our consolidated statements of operations. For the three months ended June 30, 2022, inventory write-downs were $155.7 million. There were no inventory write-downs for the three months ended March 31, 2022. For the three months ended June 30, 2022, losses on firm purchase commitments were $99.6 million. There were no losses on firm purchase commitments during the three months ended March 31, 2022. There were no inventory write-downs or losses on firm purchase commitments during 2021.

XML

Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible Assets and Goodwill

Identifiable Intangible Assets

Purchased intangible assets consisted of the following (in thousands):

	June 30, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated  Amortization		Intangible Assets, Net		Gross Carrying Amount		Accumulated  Amortization		Intangible Assets, Net
Finite-lived intangible assets:
Proprietary adjuvant technology	$	7,278	$	(3,245)	$	4,033	$	8,239	$	(3,469)	$	4,770
Collaboration agreements	3,286		(3,286)		—		3,722		(3,722)		—
Total identifiable intangible assets	$	10,564	$	(6,531)	$	4,033	$	11,961	$	(7,191)	$	4,770

Amortization expense for the six months ended June 30, 2022 and 2021 was $0.2 million. Estimated amortization expense for existing intangible assets for the remainder of 2022 and for each of the five succeeding years ending December 31 will be as follows (in thousands):

Year	Amount
2022 (remainder)	$	182
2023	364
2024	364
2025	364
2026	364
2027	364

Goodwill

The change in the carrying amounts of goodwill for the six months ended June 30, 2022 was as follows (in thousands):

	Amount
Balance at December 31, 2021	$	131,479
Currency translation adjustments	(8,012)
Balance at June 30, 2022	$	123,467

XML

Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

Leases

During the six months ended June 30, 2022, the Company concluded that changes in facts and circumstances on its CMO and CDMO agreements that had previously been determined to represent embedded lease arrangements resulted in the modification of existing leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration in the contracts and reassessed the lease classification as of the effective date of the modification. As a result, during the six months ended June 30, 2022, the Company recognized a Right-Of-Use (“ROU”) asset and a corresponding long-term operating lease liability of $19.8 million on the remeasurement of one of its long-term supply agreements using an average incremental borrowing rate of 3.0%. The Company expensed the ROU asset since it relates to research and development activities for the development of NVX-CoV2373 for which the Company does not have an alternative future use.

During the three and six months ended June 30, 2022, the Company recognized a short-term lease expense of $5.8 million and $83.9 million, respectively, related to its embedded leases and expensed $9.4 million and $19.8 million, respectively, of 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 and six months ended June 30, 2021, the Company recognized a short-term lease expense of $86.6 million and $214.2 million, respectively, related to its embedded leases and expensed $11.4 million and $12.4 million, respectively, of 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 and six months ended June 30, 2022, the Company recognized $2.3 million and $3.4 million of interest expense, respectively, on its finance lease liabilities. During the three and six months ended June 30, 2021, the Company recognized $1.8 million and $4.0 million of interest expense, respectively, on its finance lease liabilities.

During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland. The lease is for approximately 170,000 square feet of space that the Company intends to use for manufacturing, research and development, and offices. The term of the lease is 15 years with options to extend the lease. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs. During the three months ended March 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, the third floor of the premises and recognized a ROU asset of $47.8 million and related lease obligation for the combined third floor and land lease as the lease commencement date for accounting purposes had occurred.

Leases

Leases

During the six months ended June 30, 2022, the Company concluded that changes in facts and circumstances on its CMO and CDMO agreements that had previously been determined to represent embedded lease arrangements resulted in the modification of existing leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration in the contracts and reassessed the lease classification as of the effective date of the modification. As a result, during the six months ended June 30, 2022, the Company recognized a Right-Of-Use (“ROU”) asset and a corresponding long-term operating lease liability of $19.8 million on the remeasurement of one of its long-term supply agreements using an average incremental borrowing rate of 3.0%. The Company expensed the ROU asset since it relates to research and development activities for the development of NVX-CoV2373 for which the Company does not have an alternative future use.

During the three and six months ended June 30, 2022, the Company recognized a short-term lease expense of $5.8 million and $83.9 million, respectively, related to its embedded leases and expensed $9.4 million and $19.8 million, respectively, of 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 and six months ended June 30, 2021, the Company recognized a short-term lease expense of $86.6 million and $214.2 million, respectively, related to its embedded leases and expensed $11.4 million and $12.4 million, respectively, of 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 and six months ended June 30, 2022, the Company recognized $2.3 million and $3.4 million of interest expense, respectively, on its finance lease liabilities. During the three and six months ended June 30, 2021, the Company recognized $1.8 million and $4.0 million of interest expense, respectively, on its finance lease liabilities.

During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland. The lease is for approximately 170,000 square feet of space that the Company intends to use for manufacturing, research and development, and offices. The term of the lease is 15 years with options to extend the lease. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs. During the three months ended March 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, the third floor of the premises and recognized a ROU asset of $47.8 million and related lease obligation for the combined third floor and land lease as the lease commencement date for accounting purposes had occurred.

XML

Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Debt

Debt

Convertible Notes

The Company incurred approximately $10.0 million of debt issuance costs during the first quarter of 2016 relating to the issuance of $325 million aggregate principal amount of convertible senior unsecured notes that will mature on February 1, 2023 (the “Notes”), which were recorded as a reduction to the Notes on the consolidated balance sheet. The $10.0 million of debt issuance costs is being amortized and recognized as additional interest expense over the seven-year contractual term of the Notes on a straight-line basis, which approximates the effective interest rate method.

Total convertible notes payable consisted of the following at (in thousands):

	June 30, 2022		December 31, 2021
Principal amount of Notes	$	325,000	$	325,000
Unamortized debt issuance costs	(831)		(1,542)
Total convertible notes payable(1)	$	324,169	$	323,458

(1)    Convertible notes are classified as current liabilities and as non-current liabilities in the consolidated balance sheets as of June 30, 2022 and December 31, 2021, respectively.

The interest expense incurred in connection with the Notes consisted of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Coupon interest at 3.75%	$	3,047	$	3,047	$	6,094	$	6,094
Amortization of debt issuance costs	356		356		712		712
Total interest expense on Notes	$	3,403	$	3,403	$	6,806	$	6,806

XML

Stockholders' Equity (Deficit)

6 Months Ended

Jun. 30, 2022

Stockholders' Equity Note [Abstract]

Stockholders' Equity (Deficit)

Stockholders' Equity (Deficit)

During the three months ended March 31, 2022, the Company sold 2.2 million of shares of its common stock resulting in net proceeds of approximately $179 million, under its most recent At Market Issuance Sales agreement entered in June 2021 (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 June 30, 2022, the remaining balance under the June 2021 Sales Agreement was approximately $318 million.

During the six months ended June 30, 2021, the Company sold 2.6 million shares of its common stock resulting in net proceeds of approximately $565 million, under its various At Market Issuance Sales agreements.

XML

Stock-Based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Equity Plans

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, which includes an increase of 2.4 million shares approved for issuance under the 2015 Plan at the Company's 2022 annual meeting of stockholders. All such shares authorized for issuance under the 2015 Plan have been reserved. The 2015 Plan will expire on March 4, 2025.

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 2015 Plan permits 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 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 stock options are generally subject to vesting over periods ranging from one to four years.

The Company recorded all stock-based compensation expense in the consolidated statements of operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	19,695	$	24,779	$	36,582	$	48,569
General and administrative	18,353		28,344		34,399		57,614
Total stock-based compensation expense	$	38,048	$	53,123	$	70,981	$	106,183

As of June 30, 2022, there was approximately $212 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 June 30, 2022. 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 six months ended June 30, 2022 and 2021 was approximately $8 million and $115 million, respectively.

Stock Options and Stock Appreciation Rights

The following is a summary of stock options and SARs activity under the 2015 Plan and 2005 Plan for the six months ended June 30, 2022:

	2015 Plan			2005 Plan
	Stock Options	Weighted-Average Exercise Price		Stock Options	Weighted-Average Exercise Price
Outstanding at December 31, 2021	3,635,837	$	42.60	68,225	$	109.52
Granted	506,821	73.94		—
Exercised	(59,727)	15.61		(3,000)	31.10
Canceled	(35,195)	78.51		(1,500)	121.00
Outstanding at June 30, 2022	4,047,736	$	46.61	63,725	$	112.94
Shares exercisable at June 30, 2022	1,463,037	$	55.28	63,725	$	112.94
Shares available for grant at June 30, 2022	4,834,171

The fair value of stock options granted under the 2015 Plan was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Weighted average Black-Scholes fair value of stock options granted	$43.21	$166.66	$62.52	$131.66
Risk-free interest rate	2.7%-3.2%	0.6%-1.1%	1.4%-3.2%	0.5%-1.1%
Dividend yield	—%	—%	—%	—%
Volatility	120.5%-136.7%	126.2%-142.0%	120.5%-136.7%	124.7%-142.0%
Expected term (in years)	4.0-6.2	4.1-6.1	4.0-6.2	4.1-6.1

The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs outstanding under the 2015 Plan and 2005 Plan as of June 30, 2022 was approximately $91 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 2015 Plan and 2005 Plan as of June 30, 2022 was approximately $30 million and 6.5 years, respectively.

Restricted Stock Units

The following is a summary of RSU activity for the six months ended June 30, 2022:

	Number of Shares	Per Share Weighted- Average Fair Value
Outstanding and unvested at December 31, 2021	819,828	$	116.70
Granted	882,828	74.34
Vested	(55,425)	157.97
Forfeited	(71,989)	110.57
Outstanding and unvested at June 30, 2022	1,575,242	$	91.79

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). No ESPP option periods commenced during the three months ended June 30, 2022 and 2021. As of June 30, 2022, there were 0.7 million shares available for issuance under the ESPP.

The ESPP is considered compensatory for financial reporting purposes. As such, the fair value of ESPP shares was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Six Months Ended June 30,
	2022	2021
Range of Black-Scholes fair values of ESPP shares granted	$44.67-$79.74	$128.70-$238.85
Risk-free interest rate	0.6%-1.4%	0.1%
Dividend yield	—%	—%
Volatility	116.2%-142.9%	120.4%-159.4%
Expected term (in years)	0.5-2	0.5-2.0

XML

Income Taxes

6 Months Ended

Jun. 30, 2022

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 June 30, 2022 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 June 30, 2022, 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.

The Company recognized federal and state income tax expense of $1.4 million and $1.9 million, in total, for the three and six months ended June 30, 2022, respectively, and did not recognize federal or state income tax expense for the three and six months ended June 30, 2021. The Company recognized income tax expense related to foreign withholding tax on royalties of $2.2 million for the six months ended June 30, 2022 and $3.5 million and $6.6 million for the three and six months ended June 30, 2021, respectively. The Company did not recognize income tax expense related to foreign withholding tax on royalties for the three months ended June 30, 2022.

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

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 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 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 vaccine’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 June 9, 2022, the co-lead plaintiffs filed an opposition to the motion to dismiss and on July 11, 2022, the Company filed a reply brief. The matter is now fully briefed. The Court has not indicated whether it intends to schedule any hearing on the motion before issuing a ruling.

After the Sinnathurai Action was filed, five derivative lawsuits were filed: Robert E. Meyer v. Stanley C. Erck, et al., No. 8:21-cv-02996-TDC (the “Meyer Action”), Shui Shing Yung v. Stanley C. Erck, et al., No. 8:21-cv-03248-TDC (the “Yung Action”), William Kirst, et al. v. Stanley C. Erck, et al., No. 8:22-cv-00024-TDC (the “Kirst Action”), Amy Snyder v. Stanley C. Erck, et al., No. 8:22-cv-01415-TDC (the “Snyder Action”), and Charles R. Blackburn, et al. v. Stanley C. Erck, et al., No. 1:22-cv-01417-TDC (the “Blackburn Action”). The Meyer, Yung, Snyder, and Blackburn Actions were filed in the U.S. District Court for the District of Maryland. The Kirst Action was filed in the Circuit Court for Montgomery County, Maryland, and shortly thereafter removed to the U.S. District Court for the District of Maryland by the defendants. The derivative lawsuits name members of the 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 July 21, 2022, the Court issued a memorandum opinion and order remanding the Kirst Action to state court. On February 4, 2022, the Court entered an order consolidating the Meyer and Yung Actions (the “Consolidated Derivative Action”). The plaintiffs in the Consolidated Derivative Action filed their consolidated derivative complaint on April 25, 2022. On May 10, 2022, the Court entered an order in the Consolidated Derivative Action 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. If a related derivative action is filed and is not stayed, the Meyer and Yung plaintiffs may seek to terminate the stay. On June 10, 2022, the Snyder and Blackburn Actions were filed. The Snyder and Blackburn plaintiffs have expressed their intent to move the court to consolidate all of the derivative actions pending in Maryland federal court and to appoint lead counsel. On July 21, 2022, the Court ordered the parties in the Consolidated Derivative Action, the Snyder Action, and the Blackburn Action to meet and confer concerning consolidation, the appointment of lead counsel, and the ongoing stay of proceedings in the Consolidated Derivative Action. Should the parties fail to reach agreement on those issues, the Snyder and Blackburn plaintiffs were granted leave to file a motion for consolidation and appointment of lead counsel by August 18, 2022.

On March 29, 2022, Par Sterile Products, LLC (“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 (“MSA”) that the Company entered into with Par in September 2020 to provide fill-finish manufacturing services for NVX-CoV2373. The matter is at a preliminary stage and therefore the potential loss is not reasonably estimable. While the Company maintains that no breach of the MSA has occurred and intends to vigorously defend the matter, if the final resolution of the matter is adverse to the Company, it could have a material impact on the Company’s financial position, results of operations, or cash flows.

The Company is also involved in various legal proceedings arising in the normal course of business. Although the outcomes of these legal proceedings are inherently difficult to predict, management does not expect the resolution of these legal proceedings to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

XML

Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

In July 2022, the Company received emergency use authorization for NVX-CoV2373 from the FDA to provide a two-dose primary series in individuals 18 years of age and over.

In July 2022, the Company entered into a modification to the OWS Agreement that amended the terms of such agreement to provide for (i) an initial delivery to the U.S. government of approximately 3 million doses of NVX-CoV2373, contingent on the timing of EUA approval by the FDA, as well as the timing of label language and artwork approvals by the FDA and the recommendation of the Advisory Committee on Immunization Practices within the United States Centers for Disease Control and Prevention, and (ii) any additional manufacture and delivery to the U.S. government up to an aggregate of 100 million doses of NVX-CoV2373 contemplated by the original OWS Agreement (inclusive of the initial batch of approximately 3 million doses) dependent on U.S. government demand, FDA guidance on strain selection, agreement between the parties on the price of such doses, and available funding. The 3 million initial doses were delivered in July 2022. Additionally, in July 2022, the Company modified its existing agreement with the DoD to provide for the initial delivery of 0.2 million doses of NVX-CoV2373 after receipt of EUA approval from the FDA, with delivery of the remaining 9.8 million doses of NVX-CoV2373 contemplated by the original agreement subject to DoD demand and available funding.

In July 2022, the Company entered into the Amended and Restated UK Supply Agreement with the Authority, which amended and restated in its entirety the Original UK Supply Agreement. Under the Amended and Restated UK Supply Agreement, the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses of NVX-CoV2373, with the number of additional doses contingent on the Company’s timely achievement of supportive recommendations from the JCVI. In the event that the Company is unable to achieve the JCVI supportive recommendations, it may have to repay up to $225.0 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement. Under the Amended and Restated UK Supply Agreement, the Authority also has the option to purchase up to an additional 44 million doses, in one or more tranches, through 2024.

In July 2022 and August 2022, the Company was notified by the EC that it was cancelling its prior commitment for 5 million doses originally scheduled for delivery in the first and second quarters of 2022, in accordance with the APA.

In July 2022, the Company signed an agreement with SK bioscience for the technology transfer of the Company’s proprietary COVID-19 variant antigen materials so that SK bioscience can manufacture the drug substance targeting COVID-19 variants, including the Omicron subvariants. In addition, the companies signed an agreement to manufacture and supply the Novavax COVID-19 vaccine in a prefilled syringe.

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

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, respectively, 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 income included a foreign currency translation loss of $10.9 million and $1.4 million as of June 30, 2022 and December 31, 2021, respectively.

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, 2021. 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.

Reclassifications

Reclassifications

Certain amounts reported in prior periods have been reclassified to conform to current period financial statement presentation. These reclassifications have no material effect on previously reported financial position, cash flows, or results of operations.

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 - Product Sales

Revenue Recognition - Product Sales

Product sales are associated with the Company’s NVX-CoV2373 supply agreements, sometimes referred to as advance purchase agreements (“APAs”), with various international governments. The Company recognizes revenue from product sales based on the transaction price per dose calculated in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) when control of the product transfers to the customer and customer acceptance has occurred, unless such acceptance provisions are deemed perfunctory. If an APA includes a term that may have the effect of decreasing the price per dose of previously delivered shipments, the Company constrains the price until it is probable that a significant reversal in revenue recognized will not occur.

Cost of Sales

Cost of Sales

Cost of sales includes cost of raw materials, production, and manufacturing overhead costs associated with the Company’s product sales during the period. Cost of sales also includes adjustments for excess, obsolete, or expired inventory; idle capacity; and losses on firm purchase commitments to the extent the cost cannot be recovered based on estimates about future demand. Cost of sales does not include certain expenses related to raw materials, production, and manufacturing overhead costs which were expensed prior to regulatory authorization as described under the caption “Inventory” below.

Inventory

Inventory

Inventory is recorded at the lower of cost or net realizable value under the First In, First Out (“FIFO”) methodology, taking into consideration the expiration of the inventory item. The Company determines the cost of raw materials using moving average costs and the cost of semi-finished and finished goods using a standard cost method adjusted on a periodic basis to reflect the deviation in the actual cost from the standard cost estimate. Standard costs consist primarily of the cost of manufacturing goods, including direct materials, direct labor, the services and products of third-party suppliers, and the application of manufacturing overhead. The Company utilizes third-party contract manufacturing organizations (“CMOs”), contract development and manufacturing organizations (“CDMOs”), and other suppliers and service organizations to support the procurement and processing of raw materials, management of inventory, packaging, and the delivery process. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolete, or expired inventory through cost of sales.

Prior to initial regulatory authorization for its product candidates, the Company expenses costs relating to raw materials, production, and manufacturing overhead costs as research and development expenses in the consolidated statements of operations, in the period incurred. Subsequent to initial regulatory authorization for a product candidate, the Company capitalizes the costs of production for a particular supply chain as inventory when the Company determines that it has a present right to the economic benefit associated with the product.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) 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” (“CECL”) 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 ASU is effective for the Company beginning on January 1, 2023. Management is currently evaluating the effect of the guidance and does not expect it to have a material impact on the Company’s consolidated financial statements.

Adopted

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplified the accounting for certain financial instruments with characteristics of liabilities and equity, including certain convertible instruments and contracts in an entity’s own equity. Specifically, the new standard removed the separation models required for convertible debt with cash conversion features and convertible instruments with beneficial conversion features. It also removed certain settlement conditions that are currently required for equity contracts to qualify for the derivative scope exception and simplified the diluted earnings per share calculation for convertible instruments. The Company adopted ASU 2020-06 on January 1, 2022 using a modified retrospective approach, which did not have a material impact on the Company’s consolidated financial statements.

XML

Revenue (Tables)

6 Months Ended

Jun. 30, 2022

U.S. Government Agreements, Grants and Licenses

Schedule of Increase (Decrease) In Accounts Receivable, Unbilled Services, and Deferred Revenue

During the six months ended June 30, 2022, changes in the Company's accounts receivables and deferred revenue balances were as follows (in thousands):

	December 31, 2021		Additions	Deductions	June 30, 2022
Contract receivables:
Accounts receivable	$	454,993	808,713	(1,069,173)	$	194,533
Contract liabilities:
Deferred revenue(1)	$	1,595,472	49,107	(128,432)	$	1,516,147

(1)    Amount is comprised of $701.5 million and $1.4 billion of current Deferred revenue and $814.6 million and $172.5 million of non-current Deferred revenue as of June 30, 2022 and December 31, 2021, respectively.

Schedule of Revenue by Major Customers by Reporting Segments

The Company recognized grant revenue as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
U.S. government partnership (“OWS”)	$	107,774	$	239,493	$	207,075	$	603,053
U.S. Department of Defense (“DoD”)	—		1,041		—		20,185
Coalition for Epidemic Preparedness Innovations (“CEPI”)	—		31,955		—		93,516
Bill & Melinda Gates Foundation (“BMGF”)	—		—		—		2,628
Total grant revenue	$	107,774	$	272,489	$	207,075	$	719,382

XML

Cash, Cash Equivalents, and Restricted Cash (Tables)

6 Months Ended

Jun. 30, 2022

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 the same such amounts shown in the statements of cash flows (in thousands):

	June 30, 2022		December 31, 2021
Cash and cash equivalents	$	1,375,587	$	1,515,116
Restricted cash, current	10,274		11,490
Restricted cash, non-current(1)	1,654		1,653
Cash, cash equivalents, and restricted cash	$	1,387,515	$	1,528,259

(1)Classified as Other non-current assets as of June 30, 2022 and December 31, 2021, on the consolidated balance sheets.

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

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 June 30, 2022						Fair Value at December 31, 2021
Assets	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Money market funds(1)	$	500,885	$	—	$	—	$	361,822	$	—	$	—
Government-backed securities(1)	—		179,500		—		—		266,250		—
Corporate debt securities(1)	—		594,750		—		—		790,672		—
Total cash equivalents	$	500,885	$	774,250	$	—	$	361,822	$	1,056,922	$	—
Liabilities
Convertible notes payable	$	—	$	323,112	$	—	$	—	$	447,509	$	—

(1)All investments are classified as cash and cash equivalents as of June 30, 2022 and December 31, 2021, on the consolidated balance sheets.

XML

Inventory (Tables)

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventory, Current

Inventory consisted of the following (in thousands):

	June 30, 2022		December 31, 2021
Raw materials	$	55,154	$	8,872
Semi-finished goods	71,676		—
Finished goods	129,471		—
Total inventory	$	256,301	$	8,872

XML

Intangible Assets and Goodwill (Tables)

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of identifiable intangible assets

Purchased intangible assets consisted of the following (in thousands):

	June 30, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated  Amortization		Intangible Assets, Net		Gross Carrying Amount		Accumulated  Amortization		Intangible Assets, Net
Finite-lived intangible assets:
Proprietary adjuvant technology	$	7,278	$	(3,245)	$	4,033	$	8,239	$	(3,469)	$	4,770
Collaboration agreements	3,286		(3,286)		—		3,722		(3,722)		—
Total identifiable intangible assets	$	10,564	$	(6,531)	$	4,033	$	11,961	$	(7,191)	$	4,770

Schedule of estimated amortization expense

Estimated amortization expense for existing intangible assets for the remainder of 2022 and for each of the five succeeding years ending December 31 will be as follows (in thousands):

Year	Amount
2022 (remainder)	$	182
2023	364
2024	364
2025	364
2026	364
2027	364

Schedule of goodwill

The change in the carrying amounts of goodwill for the six months ended June 30, 2022 was as follows (in thousands):

	Amount
Balance at December 31, 2021	$	131,479
Currency translation adjustments	(8,012)
Balance at June 30, 2022	$	123,467

XML

Debt (Tables)

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Schedule of convertible notes payable

Total convertible notes payable consisted of the following at (in thousands):

	June 30, 2022		December 31, 2021
Principal amount of Notes	$	325,000	$	325,000
Unamortized debt issuance costs	(831)		(1,542)
Total convertible notes payable(1)	$	324,169	$	323,458

(1)    Convertible notes are classified as current liabilities and as non-current liabilities in the consolidated balance sheets as of June 30, 2022 and December 31, 2021, respectively.

Schedule of interest expense

The interest expense incurred in connection with the Notes consisted of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Coupon interest at 3.75%	$	3,047	$	3,047	$	6,094	$	6,094
Amortization of debt issuance costs	356		356		712		712
Total interest expense on Notes	$	3,403	$	3,403	$	6,806	$	6,806

XML

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-Based Compensation Expense

The Company recorded all stock-based compensation expense in the consolidated statements of operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	19,695	$	24,779	$	36,582	$	48,569
General and administrative	18,353		28,344		34,399		57,614
Total stock-based compensation expense	$	38,048	$	53,123	$	70,981	$	106,183

Schedule of Option and Appreciation Rights Activity

The following is a summary of stock options and SARs activity under the 2015 Plan and 2005 Plan for the six months ended June 30, 2022:

	2015 Plan			2005 Plan
	Stock Options	Weighted-Average Exercise Price		Stock Options	Weighted-Average Exercise Price
Outstanding at December 31, 2021	3,635,837	$	42.60	68,225	$	109.52
Granted	506,821	73.94		—
Exercised	(59,727)	15.61		(3,000)	31.10
Canceled	(35,195)	78.51		(1,500)	121.00
Outstanding at June 30, 2022	4,047,736	$	46.61	63,725	$	112.94
Shares exercisable at June 30, 2022	1,463,037	$	55.28	63,725	$	112.94
Shares available for grant at June 30, 2022	4,834,171

Schedule of Assumptions Used in Estimation of Fair Value of Stock

The fair value of stock options granted under the 2015 Plan was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Weighted average Black-Scholes fair value of stock options granted	$43.21	$166.66	$62.52	$131.66
Risk-free interest rate	2.7%-3.2%	0.6%-1.1%	1.4%-3.2%	0.5%-1.1%
Dividend yield	—%	—%	—%	—%
Volatility	120.5%-136.7%	126.2%-142.0%	120.5%-136.7%	124.7%-142.0%
Expected term (in years)	4.0-6.2	4.1-6.1	4.0-6.2	4.1-6.1

The ESPP is considered compensatory for financial reporting purposes. As such, the fair value of ESPP shares was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Six Months Ended June 30,
	2022	2021
Range of Black-Scholes fair values of ESPP shares granted	$44.67-$79.74	$128.70-$238.85
Risk-free interest rate	0.6%-1.4%	0.1%
Dividend yield	—%	—%
Volatility	116.2%-142.9%	120.4%-159.4%
Expected term (in years)	0.5-2	0.5-2.0

Schedule Of Share Based Compensation Restricted Stock Awards Activity

The following is a summary of RSU activity for the six months ended June 30, 2022:

	Number of Shares	Per Share Weighted- Average Fair Value
Outstanding and unvested at December 31, 2021	819,828	$	116.70
Granted	882,828	74.34
Vested	(55,425)	157.97
Forfeited	(71,989)	110.57
Outstanding and unvested at June 30, 2022	1,575,242	$	91.79

XML

Summary of Significant Accounting Policies - Basis of Presentation (Details) $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($) segment	Dec. 31, 2021 USD ($)
Accounting Policies [Abstract]
Foreign currency translation adjustment | $	$ 10.9	$ 1.4
Number of business segments | segment	1

XML

Revenue - Additional Information (Details) $ in Thousands, segment in Millions	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2022 USD ($) dose	Mar. 31, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) dose	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) dose	Jul. 31, 2022 dose segment
Revenue Recognition
Billed contracts receivable | $	$ 165,600			$ 165,600		$ 419,700
Unbilled contracts receivable | $	29,000			29,000		$ 35,300
Revenues | $	185,925		$ 298,017	889,896	$ 745,246
Milestone payment recognized | $	$ 20,000			$ 20,000
Amended and Restated UK Supply Agreement | Subsequent Events
Revenue Recognition
Purchase agreement, number of vaccine doses							60,000,000
Amended and Restated UK Supply Agreement | Subsequent Events | Minimum
Revenue Recognition
Number of doses of vaccine to be distributed							1,000,000
Amended and Restated UK Supply Agreement | Subsequent Events | Maximum
Revenue Recognition
Number of doses of vaccine to be distributed							15,000,000
U.S. government partnership (“OWS”)
Revenue Recognition
Purchase agreement, number of vaccine doses	3,000,000			3,000,000
U.S. government partnership (“OWS”) | Subsequent Events
Revenue Recognition
Purchase agreement, number of vaccine doses							3,000,000
Number of doses of vaccine to be distributed							200,000
Additional purchase option, number of doses | segment							9.8
U.S. government partnership (“OWS”) | Subsequent Events | Maximum
Revenue Recognition
Number of doses of vaccine to be distributed							100,000,000
Gavi Advance Purchase Agreement SIIPL
Revenue Recognition
Number of doses of vaccine to be distributed						1,100,000,000
Milestone payment recognized | $		$ 350,000				$ 350,000
Gavi Advance Purchase Agreement- COVAX Facility
Revenue Recognition
Number of doses of vaccine to be distributed						350,000,000
European Commissions ("EC")
Revenue Recognition
Purchase agreement, number of vaccine doses	70,000,000			70,000,000
Number of doses of vaccine to be distributed	100,000,000			100,000,000
Additional purchase option, number of doses	100,000,000			100,000,000
Number of doses, remaining	42,000,000			42,000,000
European Commissions ("EC") | Minimum
Revenue Recognition
Number of doses of vaccine to be distributed	20,000,000			20,000,000
European Commissions ("EC") | Maximum
Revenue Recognition
Number of doses of vaccine to be distributed	200,000,000			200,000,000
European Commissions ("EC") | Subsequent Events
Revenue Recognition
Purchase agreement, number of vaccine doses							65,000,000
Number of doses, cancelled							5,000,000
Sales-Based Royalties
Revenue Recognition
Revenues | $	$ 1,700		$ 23,500	$ 9,200	$ 23,500
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01
Revenue Recognition
Amount of transaction price not yet satisfied | $	$ 5,000,000			$ 5,000,000
Remaining performance obligation, expected timing of satisfaction, period	12 months			12 months

XML

Revenue - Accounts Receivable, Unbilled Services, and Deferred Revenue (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Accounts Receivable, Unbilled Services and Deferred Revenue [Roll Forward]
Accounts receivable, beginning balance	$ 454,993
Additions	808,713
Deductions	(1,069,173)
Accounts receivable, ending balance	194,533
Deferred Revenue Increase (Decrease) [Abstract]
Deferred revenue, beginning balance	1,595,472
Additions	49,107
Deductions	(128,432)
Deferred revenue, ending balance	1,516,147
Deferred revenue	701,518	$ 1,422,944
Noncurrent deferred revenue	$ 814,629	$ 172,528

XML

Revenue - Schedule of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenue Recognition
Revenues	$ 185,925	$ 298,017	$ 889,896	$ 745,246
Grants
Revenue Recognition
Revenues	107,774	272,489	207,075	719,382
Grants | U.S. government partnership (“OWS”)
Revenue Recognition
Revenues	107,774	239,493	207,075	603,053
Grants | U.S. Department of Defense (“DoD”)
Revenue Recognition
Revenues	0	1,041	0	20,185
Grants | Coalition for Epidemic Preparedness Innovations (“CEPI”)
Revenue Recognition
Revenues	0	31,955	0	93,516
Grants | Bill & Melinda Gates Foundation (“BMGF”)
Revenue Recognition
Revenues	$ 0	$ 0	$ 0	$ 2,628

XML

Collaboration, License, and Supply Agreements (Details) $ in Millions	Jun. 30, 2022 USD ($)
Takeda Arrangement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Potential future milestone payments	$ 20.0

XML

Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	$ 1,375,587	$ 1,515,116
Restricted cash	10,274	11,490
Restricted cash, non-current	1,654	1,653
Cash, cash equivalents, and restricted cash	$ 1,387,515	$ 1,528,259	$ 2,122,739	$ 648,738

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Level 1
Assets
Total cash equivalents	$ 500,885	$ 361,822
Liabilities
Convertible notes payable	0	0
Level 1 | Money market funds
Assets
Total cash equivalents	500,885	361,822
Level 1 | Government-backed securities
Assets
Total cash equivalents	0	0
Level 1 | Corporate debt securities
Assets
Total cash equivalents	0	0
Level 2
Assets
Total cash equivalents	774,250	1,056,922
Liabilities
Convertible notes payable	323,112	447,509
Level 2 | Money market funds
Assets
Total cash equivalents	0	0
Level 2 | Government-backed securities
Assets
Total cash equivalents	179,500	266,250
Level 2 | Corporate debt securities
Assets
Total cash equivalents	594,750	790,672
Level 3
Assets
Total cash equivalents	0	0
Liabilities
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

XML

Inventory (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 55,154		$ 55,154		$ 8,872
Semi-finished goods	71,676		71,676		0
Finished goods	129,471		129,471		0
Total inventory	256,301		256,301		$ 8,872
Provision for excess and obsolete inventory	155,700	$ 0	$ 155,662	$ 0
Firm purchase commitment loss	$ 99,600	$ 0		$ 0

XML

Intangible Assets and Goodwill - Identifiable Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Intangible assets:
Amortization expense	$ 200	$ 200
Finite-lived intangible assets:
Gross Carrying Amount	10,564		$ 11,961
Accumulated  Amortization	(6,531)		(7,191)
Intangible Assets, Net	4,033		4,770
Proprietary adjuvant technology
Finite-lived intangible assets:
Gross Carrying Amount	7,278		8,239
Accumulated  Amortization	(3,245)		(3,469)
Intangible Assets, Net	4,033		4,770
Collaboration agreements
Finite-lived intangible assets:
Gross Carrying Amount	3,286		3,722
Accumulated  Amortization	(3,286)		(3,722)
Intangible Assets, Net	$ 0		$ 0

XML

Intangible Assets and Goodwill - Identifiable Intangible Assets, estimated amortization (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Amortization expense, fiscal year maturity
2022 (remainder)	$ 182
2023	364
2024	364
2025	364
2026	364
2027	$ 364

XML

Intangible Assets and Goodwill - Goodwill (Details)	6 Months Ended
	Jun. 30, 2022 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 131,479,000
Currency translation adjustments	(8,012,000)
Ending balance	$ 123,467,000

XML

Leases (Details) $ in Thousands	3 Months Ended		6 Months Ended			12 Months Ended
	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2020 ft²	Dec. 31, 2021 USD ($)
Lessee, Lease, Description [Line Items]
Right of use assets and lease liabilities obtained, operating lease			$ 19,800
Long-term supply agreement, incremental borrowing rate	3.00%		3.00%
Short-term lease expense	$ 5,800	$ 86,600	$ 83,900	$ 214,200
Lease expense	9,400	11,400		12,400
Interest expense	2,300	$ 1,800	3,400	$ 4,000
Right of use asset, net	85,770		85,770				$ 40,123
700Q0 Agreement
Lessee, Lease, Description [Line Items]
Lease expense					$ 5,800
Facility, number of square feet | ft²						170,000
Operating lease term						15 years
Right of use asset, net	$ 47,800		$ 47,800

XML

Debt - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Jun. 30, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
Debt issuance costs	$ 10,000
Face amount	325,000	$ 325,000	$ 325,000
Deferred issuance costs	$ 10,000
Term	7 years

XML

Debt - Notes Payable (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Mar. 31, 2016
Debt Disclosure [Abstract]
Principal amount of Notes	$ 325,000	$ 325,000	$ 325,000
Unamortized debt issuance costs	(831)	(1,542)
Total convertible notes payable	$ 324,169	$ 323,458

XML

Debt - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Debt Disclosure [Abstract]
Coupon interest at 3.75%	$ 3,047	$ 3,047	$ 6,094	$ 6,094
Amortization of debt issuance costs	356	356	712	712
Total interest expense on Notes	$ 3,403	$ 3,403	$ 6,806	$ 6,806
Coupon interest rate	3.75%		3.75%

XML

Stockholders' Equity (Deficit) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2021	Mar. 31, 2022	Jun. 30, 2022	Jun. 30, 2021
Stockholders' Equity
Proceeds from shares sold, net			$ 179,385	$ 564,859
Remaining unissued capital			$ 318,000
Common Stock
Stockholders' Equity
Issued (in shares)		2,200,000	2,197,398	2,578,967
Proceeds from shares sold, net	$ 500,000		$ 22	$ 26
Additional Paid-in Capital
Stockholders' Equity
Proceeds from shares sold, net		$ 179,000	$ 179,363	$ 564,833

XML

Stock-Based Compensation - Stock Options (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2022	Jun. 30, 2021
Stock-Based Compensation
Unrecognized compensation expense		$ 212
Unrecognized compensation expense, recognition period		1 year
Aggregate intrinsic value, stock options and vesting RSA's		$ 8	$ 115
Aggregate intrinsic value, outstanding		$ 91
Remaining term, outstanding (in years)		7 years 6 months
Aggregate intrinsic value, exercisable		$ 30
Remaining term, exercisable (in years)		6 years 6 months
ESPP
Stock-Based Compensation
Authorized (in shares)		1,650,000
Additional shares authorized (in shares)		1,100,000
Percentage increase of shares each anniversary		5.00%
Subscription rate cap		15.00%
Maximum discount rate		85.00%
Shares available for grant (in shares)		700,000
2015 Plan
Stock-Based Compensation
Authorized (in shares)		14,800,000
Additional shares authorized (in shares)		2,400,000
Term (in years)	10 years
Minimum grant price, percent of common stock fair value	100.00%
Shares available for grant (in shares)		4,834,171
2015 Plan | Minimum
Stock-Based Compensation
Vesting period	1 year
2015 Plan | Maximum
Stock-Based Compensation
Vesting period	4 years

XML

Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Compensation expense:
Total stock-based compensation expense	$ 38,048	$ 53,123	$ 70,981	$ 106,183
Research and development
Compensation expense:
Total stock-based compensation expense	19,695	24,779	36,582	48,569
General and administrative
Compensation expense:
Total stock-based compensation expense	$ 18,353	$ 28,344	$ 34,399	$ 57,614

XML

Stock-Based Compensation - Stock Options and Appreciation Rights (Details)	6 Months Ended
	Jun. 30, 2022 $ / shares shares
2015 Plan
Stock Options
Outstanding, beginning balance (in shares)	3,635,837
Granted (in shares)	506,821
Exercised (in shares)	(59,727)
Canceled (in shares)	(35,195)
Outstanding, ending balance (in shares)	4,047,736
Shares exercisable (in shares)	1,463,037
Shares available for grant (in shares)	4,834,171
Weighted-Average Exercise Price
Outstanding, beginning balance (in usd per share) | $ / shares	$ 42.60
Granted (in usd per share) | $ / shares	73.94
Exercised (in usd per share) | $ / shares	15.61
Canceled (in usd per share) | $ / shares	78.51
Outstanding, ending balance (in usd per share) | $ / shares	46.61
Shares exercisable (in usd per share) | $ / shares	$ 55.28
2005 Plan
Stock Options
Outstanding, beginning balance (in shares)	68,225
Granted (in shares)	0
Exercised (in shares)	(3,000)
Canceled (in shares)	(1,500)
Outstanding, ending balance (in shares)	63,725
Shares exercisable (in shares)	63,725
Weighted-Average Exercise Price
Outstanding, beginning balance (in usd per share) | $ / shares	$ 109.52
Granted (in usd per share) | $ / shares
Exercised (in usd per share) | $ / shares	31.10
Canceled (in usd per share) | $ / shares	121.00
Outstanding, ending balance (in usd per share) | $ / shares	112.94
Shares exercisable (in usd per share) | $ / shares	$ 112.94

XML

Stock-Based Compensation - Stock Options and Appreciation Rights, Assumptions (Details) - Stock options - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Fair Value
Weighted average Black-Scholes fair value of stop options and SARs granted (in usd per share)	$ 43.21	$ 166.66	$ 62.52	$ 131.66
Risk-free interest rate, minimum	2.70%	0.60%	1.40%	0.50%
Risk-free interest rate, maximum	3.20%	1.10%	3.20%	1.10%
Dividend yield	0.00%	0.00%	0.00%	0.00%
Volatility, minimum	120.50%	126.20%	120.50%	124.70%
Volatility, maximum	136.70%	142.00%	136.70%	142.00%
Minimum
Fair Value
Expected term (in years)	4 years	4 years 1 month 6 days	4 years	4 years 1 month 6 days
Maximum
Fair Value
Expected term (in years)	6 years 2 months 12 days	6 years 1 month 6 days	6 years 2 months 12 days	6 years 1 month 6 days

XML

Stock-Based Compensation - Restricted Stock Units (Details) - Restricted stock units	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Number of Shares
Outstanding and Unvested, beginning balance (in shares) | shares	819,828
Restricted stock units granted (in shares) | shares	882,828
Restricted stock units vested (in shares) | shares	(55,425)
Restricted stock units forfeited (in shares) | shares	(71,989)
Outstanding and Unvested, ending balance (in shares) | shares	1,575,242
Per Share Weighted- Average Fair Value
Outstanding and Unvested, beginning balance (in usd per share) | $ / shares	$ 116.70
Restricted stock units granted (in usd per share) | $ / shares	74.34
Restricted stock units vested (in usd per share) | $ / shares	157.97
Restricted stock units forfeited (in usd per share) | $ / shares	110.57
Outstanding and Unvested, ending balance (in usd per share) | $ / shares	$ 91.79

XML

Stock-Based Compensation - Employee Stock Purchase Plan (Details) - ESPP - $ / shares	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Fair Value
Risk-free interest rate, minimum	0.60%
Risk-free interest rate, maximum	1.40%	0.10%
Dividend yield	0.00%	0.00%
Volatility, minimum	116.20%	120.40%
Volatility, maximum	142.90%	159.40%
Minimum
Fair Value
Range of Black-Scholes fair values of ESPP shares granted (in usd per share)	$ 44.67	$ 128.70
Expected term (in years)	6 months	6 months
Maximum
Fair Value
Range of Black-Scholes fair values of ESPP shares granted (in usd per share)	$ 79.74	$ 238.85
Expected term (in years)	2 years	2 years

XML

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Federal, state and local, tax expense (benefit)	$ 1,400,000	$ 0	$ 1,900,000	$ 0
Foreign income tax expense (benefit)		$ 3,500,000	$ 2,200,000	$ 6,600,000

XML

Subsequent Events (Details) segment in Millions, $ in Millions	Jul. 31, 2022 USD ($) dose segment	Jun. 30, 2022 dose
U.S. government partnership (“OWS”)
Subsequent events
Purchase agreement, number of vaccine doses		3,000,000
European Commissions ("EC")
Subsequent events
Purchase agreement, number of vaccine doses		70,000,000
Number of doses to be distributed		100,000,000
Additional purchase option, number of doses		100,000,000
Minimum | European Commissions ("EC")
Subsequent events
Number of doses to be distributed		20,000,000
Maximum | European Commissions ("EC")
Subsequent events
Number of doses to be distributed		200,000,000
Subsequent Events | Amended and Restated UK Supply Agreement
Subsequent events
Purchase agreement, number of vaccine doses	60,000,000
Subsequent Events | U.S. government partnership (“OWS”)
Subsequent events
Purchase agreement, number of vaccine doses	3,000,000
Number of doses to be distributed	200,000
Additional purchase option, number of doses | segment	9.8
Subsequent Events | Joint Committee on Vaccination and Immunization (JCVI)
Subsequent events
Number of doses to be distributed	44,000,000
Collaboration agreement upfront payment amount | $	$ 225.0
Subsequent Events | European Commissions ("EC")
Subsequent events
Purchase agreement, number of vaccine doses	65,000,000
Number of doses, cancelled	5,000,000
Subsequent Events | Minimum | Amended and Restated UK Supply Agreement
Subsequent events
Number of doses to be distributed	1,000,000
Subsequent Events | Maximum | Amended and Restated UK Supply Agreement
Subsequent events
Number of doses to be distributed	15,000,000
Subsequent Events | Maximum | U.S. government partnership (“OWS”)
Subsequent events
Number of doses to be distributed	100,000,000