Novavax, Inc. (NVAX) Earnings Call Transcript & Summary

All right. Welcome, everyone. For your next session with Novavax, we have Filip Dubovsky, Chief Medical Officer; and John Trizzino, Chief Commercial Officer and Chief Business Officer. Gentlemen, welcome, and thank you for your efforts in a COVID pandemic to develop one of the more advanced vaccines. So why don't we dig in and give us a quick snapshot of where we are with the Novavax COVID vaccine?

Yes. So let me kick off, Josh. I think we're at a point in time where we're feeling more confident than ever about where we are from getting to approval. We, over the last several weeks, have made regulatory submissions to the EU, UK, Canada, Australia and a variety of others that on a harmonized regulatory submission, that allow us to be able to move very quickly. We're in the process now of coordinating with the various regulatory authorities, responding to some of the questions that they have relative to the filing. But feeling good about the feedback. There was a nice communication from EMA about a week or so ago regarding our submission to them. And moving along very nicely, coordination with our partner, Serum Institute on the CMC section of all of those filings and a readiness on their part to be able to produce hundreds of millions of doses. So, we're feeling good and confident about where we are.

But you've had the data in hand for a while. So just maybe kind of take us through what the gating steps have been towards regulatory approvals and some of the assay development work that you've needed to do.

Yes. So maybe I'll just kick off with the clinical data. So you're right. We've announced our results from our two Phase III studies. And these were Phase III studies that were done in different places, one in the UK and one in the US and Mexico. And the results we've presented and now published are really quite good, and they were remarkably consistent. So, our efficacy overall was right around 90% in both studies. There is less than a single percentage point between difference. And although variants were emerging in both the UK and the US at the time, our efficacy against variants was also good, including -- specifically against severe disease in the US study, which was the larger of the studies, we actually saw 100% protection against moderate and severe disease in that study. And that included against all the variants that were circulating at the time. So that's been filed, and the regulators have had that for a while, and we've been interacting with them around the details of those responses. What has held us up until now was getting our CMC package together and filed. And that was really just all about the analytics about our vaccine -- in our vaccine, our vaccine is a new technology, and it includes a particular recombinant protein and a particular anti-adjuvant. So to develop the assays to distinguish those two to a level that the regulars were happy with was a tricky part. That's been done. And that's part of the consolidated file we have in all the regulators. John?

Great. Sorry, John, were you going to add anything to that or?

No, no. I think that covered it. Yes, that was great.

So then, where are you in scaling up on manufacturing capacity? Where do you expect it to be in terms of doses produced into this year and into next?

Yes. So what we -- I think the best way to do it is given where the regulatory filings are, we're in the process of GMP manufacturing. The rate of capacity coming out is in line from our total network of manufacturing, right? We won't get into a detailed description site by site. But from a total manufacturing capability standpoint, including Serum Institute, we're still in line with what we've been saying about at least 2 billion doses during the course of '22. We're going to be fulfilling the APAs that have been previously communicated, both on the bilateral APAs that we have in place, also the coordination with Gavi for the COVAX Facility to get doses to low and middle-income countries. We're in frequent contact with all of the various countries we're dealing with on the contracting side. There's the regulatory conversations that are going on and then there's the logistics and contracting conversations that are going on. And at least weekly, coordinating with them, when we would be able to ship, the number of doses we're shipping, what their need is, how it relates to the vaccine hesitant that have yet to be vaccinated, how it relates to the booster doses that are critical to ongoing protection and how this relates in particular to pediatric dosing, which is the next wave of demand that we'll be seeing through '22 and into '23.

And now that you've solved the characterization analytics, has it also solved for any potential modifications to the vaccine to optimize for variants, which will probably segue us into the Omicron topic?

Yes. Let me comment on a capability standpoint, and then I think Filip could comment on regulatory pathway activity and requirements. So, what we're seeing with Omicron right now, right, is very -- what has been expected and what we're prepared for. So, we've issued a statement this morning that outlines what we're doing in response to Omicron. And it's a two-pronged approach in which we're going to be looking at our ability to protect protective level antibody levels with the existing vaccine. And if that falls short of where we would reasonably expect it to be, in parallel, we're running a pathway that will allow us to do a strain change. And that strain change is something that we've been planning and expecting to do, and it's possible to do on our technology platform, our recombinant protein nanoparticle. We're already looking at the genetic sequence. Our discovery folks are putting that new vaccine candidates together. And we would expect to be in GMP manufacturing and a readiness for the comparability on the regulatory side that Filip will talk about by the end of January.

Yes. I mean, this is kind of what we've been doing for a while now. So every time a new variant crops up, we make it. So even a library of all these variants that are kind of hanging out in the background, we just haven't had a need deploying forward. So, we're doing the same thing. We started manufacturing last Saturday for our DNA sequence to prepare us for our GMP campaigns in January. The regulators have kind of already told us what they expect to see to do a strain change. It's a little bit different now than what they stated earlier on because there are really no more 0 negative people, but the studies are pretty fast and they're small. And all you really have to do is hit people with a dose of the variant and compare it back to immune responses that they originally had after two doses. So that's our planned approach. At this point, we still haven't had specific discussions with the regulators about this because it does differ a bit based on the lack of 0 negative people globally. But we think that that's going to be the way forward.

Okay. That's great to hear. At least the clinical development shouldn't be too lengthy or cumbersome. Maybe talk a little bit about the logistics of switching to an optimized Omicron addressable vaccine, how fast can I switch over the manufacturing to start producing a new vaccine.

So in discussion with our manufacturing group, they think the process is identical, right? So even though there are a number of changes in the spike protein, the process itself doesn't rely on those. So, there should be no changes at all. It should be plug and play. And that's actually the basis of a strain change. That's the whole idea that we do in flu. And it would be relevant here that you use the same process to develop the product. In fact, you have to [ bring different ] products. So the processes will, by definition, be the same.

So what, ultimately, do you see as the gating step? Is it data generation? Or is it the manufacturing kind of switchover and recharacterization?

I see two things. One of them is there's a lot of attention being paid to Omicron, but really how [ threat ] it is in areas where there's a lot of Delta isn't clear yet and how virulent it is isn't clear yet. I guess the other thing from a vaccine technology perspective is that even though all these variants have cropped up over the last year, the T cell responses have been quite good against all of them. So that hasn't really changed. And the real question is, have these changed enough to impact the amount of neutralizing antibody and induce? And that's what we have to look. So one, is it worth to develop a vaccine? My guess is probably the answer should be yes. And then the other point is the stuff we have in hand, is it adequate? And that's going to be a yes or no answer. And if the answer is we need more, we already got to the GMP, we have the GP campaign planned, and we'll push this for a strain change.

Okay. Got it. Yes. And it is a very good point that this is all what ifs for the moment. But then kind of getting back to that point, if we do need the switch, what's the lengthiest process that we need to consider? Can the manufacturing and analytics move faster than the clinical development at this time?

Yes. There is also a third -- sorry, Filip, there is a third leg to that stool too, right, which is what has to happen from a public health policy perspective here, right? So while we have the capability to implement the new strain and get it into manufacturing, the reality is you've got different profiles of what's circulating on a country-by-country basis. And so there is going to have to be made a decision about what gets rolled out, where it gets rolled out, what quantities. This is maybe stating the obvious, but this is a fairly complicated problem to solve for when you do a strain change, witness what it's been, what that requirement has been over the last 40 years for influenza vaccines, surveillance and strain changes in Northern Hemisphere and Southern Hemisphere. So while we're capable to do with the actual rollout, from a policy standpoint, it's a bit challenging.

That is such a good point, right? Like it does get very complex. And you have to, like, at some point, I guess, try to make some best guesses about the future. So do you have a sense as to like data points that you're looking for and ultimately, a determination like you may have to almost be doing both in parallel at some point?

Hopefully not, but possibly so. So just back to what you were talking about before briefly. So clearly, before we can do clinical development, we need to get it manufactured. So, those are supply approaches, right? So in this regard, we -- since we know what we're doing in the manufacturing release side, probably the clinical will be the final step before we can do a strain change and get ultimate approval for the vaccine. I guess one question, which is yet unanswered is what the bat neutralization looks like. So if you make Omicron, and you see what it does to the current strains that are circulating, if that's favorable, then you may say, okay, no, go with Omicron. If it isn't, then I think you're in a more [ obvious ] choice of what you push forward with, especially if it turns out that Omicron and there's indications that it may be more infectious. If it's more infectious, but less severe, then I think from a public policy and public health perspective, it's going to be really tricky to decide what to push out.

Yes, it is. I'm sure it would be confusing. Maybe we can -- as we think about next year, I feel like across all the vaccine manufacturers scaling up, we are going to have more doses than people who need them at least in theory. But on the other hand, the vaccines are all going to be a little bit different. How are you thinking about positioning in this dynamic? In which countries do you kind of have your sights set on either, because you've got existing contracts or you're confident you can get new ones?

Yes. As you can imagine, we've been thinking about that quite a bit, right? And so there's a lot to consider as we think about all of the countries around the globe and all of the kind of the different high-income countries, upper middle-income countries, low-income countries, where we have commitments today on APAs, where we have obligations to Gavi and the COVAX Facility. But there are a couple of really important elements here that become critical drivers to the way that we're thinking about '22. And while there are a number of countries that have relatively high vaccination rates, there is still some percentage of those populations that are vaccine hesitant, right? They're not quite sure about what's the right vaccine to get. Should I get an mRNA? Should I get a viral vector? Or should I wait for the protein-based vaccine? And so I think that there's an opportunity to capture more doses to be vaccinated and to increase the vaccination rates even higher to the vaccine hesitant, and we're going to be communicating the benefit of that to the high-income countries that we're already engaged with. Then, as I mentioned before -- then you're talking about booster, right? Boosters are here to stay. There's certainly at least at the moment in -- at six months, when does that change? We're not quite sure, right? The data will tell us whether it's going to be another round of six months or a year later. But I think it's pretty -- maybe not unanimous opinion, but certainly fairly consistent opinion that this virus isn't going away anytime soon, and there's going to be a need for some kind of booster or revaccination program, and we'll be actively participating in that. There's also the step down at the pediatric, right? And so there's a lot of school-age children that need to be vaccinated. Again, in some of the higher-income countries, that's been done and those vaccination rates are beginning to increase, but there's more room there to vaccinate. And then there's the other high-income countries, right? So, this is not the top 10 or 15 high-income countries, but another group of countries that have vaccination rates that are probably 20 percentage points lower than some of the others. And then let's not forget upper middle-income countries and low-income countries. There's a significant under-vaccinating in those populations. And I think while there might be oversupply in some countries like the US, they are locally under vaccinated in many other countries around the globe.

What have you been seeing in terms of the profile? I'm not sure if you've generated the data yet of the Novavax booster for individuals who had their initial series of mRNA vaccines. One of the selling points of the Novavax's vaccine is the tolerability profile relative to others. Is that holding up in kind of a mix-match scenario, too?

Yes. I mean -- so you're right. So, we're quite pleased what we're seeing with our safety profile right now. It's not as large as some of those that have been deployed globally because we don't have millions of doses of experience yet. What we see is good and the reactogenicity profile is in our thing quite favorable compared to many other vaccines that are being used out there now. As far as the mix-and-match data, I mean, that data is being generated in UK and we think it's going to be ready for publication in the next handful of days. It's not our data. It belongs to the academicians and it was funded by the VTF. That's going to have some data on the use of our vaccine on top of other people's vaccines. We want to generate this kind of data for ourselves as well, primarily because we want to design those studies in a way to be able to obtain licensure. So the studies which are being conducted now are quite small, and they're not done to the standards regulators were expected to take a decision on labels, but we want to take a -- obviously, we want our label to be as favorable as possible and include those kinds of messages.

And what's the gating steps on Novavax running that kind of a trial? Because that -- I hear a lot of individuals who are nervous about getting that third dose because they had a tough time with the first or second dose. And I'm guessing if they had something more gentle, that had the evidence of being more gentle, they prefer that. So maybe you can talk a little bit about what the gating steps to generating that data are and whether you agree that it is potentially like really pivotal to have that differentiated signal?

So differentiated signal, maybe I'll toss to John. But I think I like your characterization of us being a gentle vaccine.

Well, I think it's a good segue into what I wanted to comment on about for the profile of making booster dosing a success, right? The goal here is to get back to protective antibody levels. So, that's one element of significance in the boost. We're seeing -- we have lots of data that we've already published, and/or disclosed that talk about the cross-reactivity, the cross-protection properties of our vaccine. So that's an important element and potentially differentiated related to our construct and related to Matrix adjuvant. And then third is this safety profile, whether it's less adverse events, fewer adverse events or a gentler reactogenicity, if you will, which doesn't really get reported. We've got data from some of our trials that talk to that. But think about the people that get vaccinated are out of work for one or two days, and that doesn't really get to adverse event reporting. And I think you're going to see people -- it becomes something that people talk about, but it really is an element related to the desire to take our vaccine versus another.

Excellent. Looking -- very much looking forward to those updates. Maybe just to finish off. I know you're also working on a COVID flu combination. Maybe give us a sense of the timelines then and when we can expect?

Yes. So, we ran that study in Australia and dosing is complete. We did a multi-dose schedule, just so we could cover all of the bases. And that study was designed really to help us select the final antigen doses we include. So it's a quadrivalent flu vaccine. It's the one that we had a successful Phase III study with about 18 months ago now, combined with our COVID vaccine. And the question we're trying to answer is, what's the right [indiscernible], what's the right amount of the 4 HA antigens, plus COVID in there to give the optimal immune response and what's the best schedule to be used to deliver that. So that study is going to read out next year, early next year. And that's going to be used to select a dose level to push into further development.

Well, I think we are out of time. Great overview. Great to see Novavax moving ahead. And I feel like the COVID vaccine game is still in the middle innings. So that's still a lot of room for personal differentiated programs. So thank you, Filip and John, for joining. And thanks, everyone, for tuning in.

You are welcome, Josh. Thank you. Take care. Bye.

Bye.