Novavax Inc.
11/05/2026 | Press release | Distributed by Public on 11/05/2026 07:28
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (this "Quarterly Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any statements in the discussion below and elsewhere in this Quarterly Report about expectations, beliefs, plans, objectives, assumptions, or future events or performance of Novavax, Inc. ("Novavax," 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 corporate growth strategy and key value drivers; our technology platform; our COVID-19 Vaccine (which includes "Nuvaxovid™"); our operating plans and prospects, including our ability to continue as a going concern through the next 12 months from the issuance of the financial statements included in this Quarterly Report on Form 10-Q; our global restructuring and cost reduction plan as defined in Note 16 to our consolidated financial statements ("Restructuring Plan"), our cash flow forecast and projected revenue, including potential royalties and milestones pursuant to the Sanofi CLA (as defined below) and Pfizer License Agreement (as defined below); potential market sizes and demand for our products and product candidates; the efficacy, safety, and intended utilization of our products and 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 research and development investment strategy; the potential expansion of our pipeline beyond infectious diseases into other therapeutic areas; 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 COVID-19 Vaccine by us and our partners; our expectations with respect to the anticipated ongoing development and commercialization or licensure of the COVID-19 Vaccine; our expectations with respect to the anticipated ongoing development of COVID-19 variant strain-containing formulations, including our COVID-19-Influenza Combination ("CIC") vaccine candidate and our stand-alone influenza vaccine candidate; our partnership efforts for our CIC vaccine candidate and stand-alone influenza vaccine candidate to advance towards a Biologics License Application ("BLA") filing and commercialization; the expected timing, content, and outcomes of regulatory actions; funding under our advance purchase agreements ("APAs") and supply agreements and amendments to, termination of, discussion regarding, or legal disputes relating to 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, our partners' ability to successfully and timely obtain and maintain full U.S. FDA licensure or foreign regulatory approvals necessary to manufacture, market, distribute, or deliver, as applicable, our COVID-19 Vaccine; the impact of delays in obtaining regulatory approval, including regulatory decisions impacting labeling, approval or authorization, including the scope of the indicated population, product dosage, manufacturing processes, shelf life, safety, for our product candidates; our ability to obtain adequate additional funding to maintain our current level of operations and fund the further development of our vaccine candidates; challenges related to our partnership with Sanofi;challenges pursuing additional partnership opportunities; challenges satisfying, alone or together with partners, various safety, efficacy, and product characterization requirements, including those related to process qualification, assay validation, and stability testing, necessary to satisfy applicable regulatory authorities; challenges or delays in conducting clinical trials or studies for our product candidates; manufacturing, distribution or export delays or challenges; our substantial dependence on Serum Institute of India Pvt. Ltd. ("SII") and Serum Life Sciences Limited ("SLS" and together with SII, "Serum") for co-formulation and filling our COVID-19 Vaccine and the impact of any delays or disruptions in their operations; the impact of potential legislative, regulatory, or policy changes under the current presidential administration, including any adverse impact funding for vaccine research and development, reimbursement for vaccines and their administration, vaccine mandates and recommendations, and public perception of vaccine importance; uncertainty with respect to pricing, third-party reimbursement and healthcare reform; uncertainty in the regulatory pathway for our COVID-19 Vaccine; the impact of any new or changes in interpretations of existing trade measures, including tariffs, embargoes, sanctions, import restrictions, and export licensing requirements;
difficulty obtaining scarce raw materials and supplies, including for our proprietary adjuvant; resource constraints, including human capital and manufacturing capacity, constraints on our ability to pursue planned regulatory pathways, alone or with partners, in multiple jurisdictions simultaneously, leading to staggering of regulatory filings, and potential regulatory actions; our ability to timely deliver doses; challenges in obtaining commercial adoption and market acceptance of our COVID-19 Vaccine or any COVID-19 variant strain containing formulation, or our CIC vaccine candidates, stand-alone influenza vaccine candidates or other candidates; challenges meeting contractual requirements under agreements with multiple commercial, governmental, and other entities including requirements to deliver doses that may require us to refund portions of upfront and other payments previously received or result in reduced future payments pursuant to such agreements; challenges related to the seasonality of vaccinations against COVID-19; challenges related to the demand for vaccinations against COVID-19 or influenza; challenges in identifying and successfully pursuing innovation expansion opportunities; our expectation as to expenses and cash needs may prove not to be correct for reasons such as changes in plans or actual events being different than our assumptions; and other risks and uncertainties identified in Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2025, and this Quarterly Report on Form 10-Q, which may be detailed and modified or updated in other documents filed with the 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.
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.
Overview
Novavax tackles some of the world's most significant health challenges with its scientific expertise in vaccines and its proven technology platform, including its Matrix-M® adjuvant and protein-based nanoparticles. Our growth strategy focuses on maximizing the impact of our technology by forging strategic partnerships for our Matrix-M® adjuvant and research and development ("R&D") assets.
Our technology platform combined with our deep vaccine expertise, is the fuel for innovation and partnerships and we believe it has the potential to create significant near- and long-term value. Our proprietary Matrix-M® adjuvant, when added to vaccines, has been shown to help induce a strong and long-lasting immune response. Our recombinant protein-based nanoparticle technology has been shown to be highly immunogenic. When combined, we believe that our technology platform can induce potent, durable, and broad immune responses, with the potential to be antigen-sparing. Our Matrix-M® adjuvant can increase both antibody and cell-mediated immune responses to a vaccine and it has demonstrated a favorable tolerability profile in clinical trials. Our technology platform is used in our COVID-19 Vaccine and the R21/Matrix-M™ malaria vaccine, a malaria vaccine developed by our partners, SII and the Jenner Institute, University of Oxford ("R21/Matrix-M™ malaria vaccine").
Additionally, we are advancing our early-stage pipeline with a focus on potential high-value assets in areas with unmet medical need, compelling scientific rationale, and strong commercial opportunity to expand the utility of our Matrix technology platform.
Additionally, we provide our Matrix-M® adjuvant for use in various programs in preclinical and clinical stage, as well as preclinical investigations. Our Matrix-M® adjuvant is being explored under our Collaboration and License Agreement with Sanofi Pasteur Inc. ("Sanofi") ("Sanofi CLA") and our License and Option Agreement with Pfizer Inc. ("Pfizer") ("Pfizer License Agreement"), as well as under multiple material transfer agreements with both global pharmaceutical companies and biotechs for exploration of Matrix-M® adjuvant used as a potential advancement in their pipelines, including preclinical collaborations in oncology.
We were incorporated in 1987 under the laws of the State of Delaware. Our principal executive offices are located at 21 Firstfield Road, Gaithersburg, Maryland, 20878, and our telephone number is (240) 268-2000. Our common stock is listed on the Nasdaq Global Select Market under the symbol "NVAX."
Technology Overview
We believe our recombinant nanoparticle vaccine technology and our proprietary Matrix-M® adjuvant are well suited for the development and commercialization of vaccine candidates targeting areas both within and beyond the infectious disease space, including in hard-to-treat infectious diseases and oncology.
Recombinant Protein-based Nanoparticle Vaccine Technology
Once a target of interest has been identified, the genetic sequence encoding an antigen is selected for developing the vaccine construct. The genetic sequence may be optimized to enhance protein stability or confer resistance to degradation. This genetic construct is generally inserted into the baculovirus Spodoptera frugiperda ("Sf-/BV") insect cell-expression system, which enables efficient, large-scale expression of the optimized protein. The Sf-/BV system produces protein-based antigens that are properly folded and modified, which can be critical for functional, protective immunity. Our testing shows 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 is another key differentiator within our platform. This adjuvant has enabled 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 with an acceptable safety and tolerability profile. This in turn activates APCs, T-cell and B-cell populations, and plasma cells, which promote the production of high affinity antibodies, an immune boosting response. This potent mechanism of action enables a lower dose of antigen to achieve the desired immune response, thereby contributing to increased vaccine supply and manufacturing capacity. These immune-boosting and dose-sparing capabilities contribute to the adjuvant's highly unique profile.
We continue to pursue partnership opportunities for use of our Matrix-M® adjuvant in other manufacturers' pipelines. We currently have multiple partnerships and material transfer agreements in place for our Matrix-M® adjuvant with multiple pharmaceutical and innovative biotechnology companies. In May 2024, pursuant to the Sanofi CLA, Sanofi received a non-exclusive license to develop and commercialize other vaccine products that include our Matrix-M® adjuvant. In January 2026, we entered into the Pfizer License Agreement for use of Matrix-M® adjuvant in up to two infectious disease areas. Our material transfer agreements allow collaborators to evaluate Matrix-M® in preclinical studies across a range of potential applications in infectious disease and oncology. Over time, material transfer agreement ("MTA") collaborations may lead to expanded access for additional fields or to license agreements.
In August 2026, our partners received approvals for the Nuvaxovid™ formulation targeting the SARS-CoV-2 XFG variant for the 2026-2027 vaccination season in major markets, including the United States, the European Union and Japan. These approvals position us to continue earning royalties on our partners' net sales of Nuvaxovid™ in these markets this season.
Commercial Products
In May 2025, the U.S. Food and Drug Administration ("U.S. FDA") approved the BLA for Nuvaxovid™ for active immunization to prevent COVID-19 caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) in adults 65 years and older and individuals 12 through 64 years who have at least one underlying condition that puts them at high risk for severe outcomes from COVID-19 (e.g. asthma, cancer, diabetes, obesity, smoking). The BLA approval was based on pivotal Phase 3 clinical trial data that showed Nuvaxovid™ was safe and effective for the prevention of COVID-19. The BLA approval triggered a $175 million milestone payment under the Sanofi CLA.
In October and November 2025, respectively, we announced that we completed the transfer of the Nuvaxovid™ BLA and the European Medicines Agency approval to Sanofi, who remains responsible for further development and commercialization of this product.
Commercial Products and Product Pipeline
The graphic represents all disclosed partnerships.
Commercial Products
Pursuant to the Sanofi CLA, Sanofi leads Nuvaxovid™ commercial activities across most major markets, including the United States, the European Union, and other select international markets. Takeda Pharmaceutical Company Limited ("Takeda") leads commercial activities of Nuvaxovid™ in Japan under our collaboration and exclusive license agreement, as amended with Takeda ("Amended Takeda CLA"). In addition, our Matrix-M® adjuvant is a component of the R21/Matrix-M™ malaria vaccine, which was developed by the University of Oxford and is manufactured and commercialized by SII, and we supply Matrix-M® adjuvant to Serum Institute for use in the vaccine. We are also subject to certain remaining obligations under APAs with several countries.
Novavax Pipeline Programs
We are advancing our pipeline programs with a focus on potential high-value assets in areas with unmet medical need, compelling scientific rationale, and strong commercial opportunity. Development and advancement of our in-house pipeline leverages our core expertise and experience in respiratory and infectious disease vaccines. We are exploring new opportunities for our technology platform, including whether it may have utility beyond infectious disease, including in oncology.
Additionally, we intend to continue developing our early-stage pipeline programs using a disciplined and capital-efficient approach. Our R&D investment strategy seeks to place targeted investments on the programs with the highest potential value, both within infectious disease and beyond, with the intent of partnering these programs earlier in the development process, while maintaining the flexibility to advance internal assets when strategically advantageous. In 2026, our Clostridioides difficile colitis vaccine candidate was prioritized as the potential next asset to enter the clinic as early as 2027 from our early-stage pipeline. In addition, the preliminary preclinical data generated on our varicella-zoster virus (shingles) and respiratory syncytial virus early-stage assets were positive and will inform our future antigen design and adjuvant work.
Partner Pipeline Programs
In addition to our own pipeline programs, we have several ongoing partnerships.
Under our Sanofi CLA, we have provided a sole license to Sanofi for the independent development of a COVID-19 and influenza combination product using our COVID-19 Vaccine in combination with two of Sanofi's separately marketed influenza vaccines, Fluzone High-Dose and Flublok. These two combination vaccine candidates were granted Fast Track designation by the U.S. FDA in December 2024 to prevent influenza and COVID-19 infections in individuals aged 50 and older. In October 2025, Sanofi reported positive Phase 1/2 results with their combination vaccine candidates and has been engaging with regulatory authorities on next steps. Sanofi also has a non-exclusive license to develop and commercialize combination products containing both our COVID-19 Vaccine and one or more non-influenza vaccines, and a non-exclusive license to develop and commercialize other vaccine products selected by Sanofi that include our Matrix-M® adjuvant.
In September 2025, we amended the Sanofi CLA to expand Sanofi's license to include use of Novavax's Matrix-M® adjuvant in Sanofi's pandemic influenza vaccine candidate program. Sanofi received funding from the Biomedical Advanced Research and Development Authority within the Administration for Strategic Preparedness and Response, part of the U.S. Department of Health and Human Services, for early-stage work on this vaccine candidate including the Matrix-M® adjuvant. In July 2026, Sanofi's H5 pandemic influenza vaccine candidate advanced into clinical development and was granted Fast Track designation by the U.S. FDA.
In January 2026, we entered the Pfizer License Agreement for use of our Matrix-M® adjuvant. Under the terms of the agreement, Pfizer will obtain a non-exclusive license for Matrix-M® adjuvant for use with Pfizer's products in two infectious disease areas. The agreement provides for an upfront payment of $30 million, with the potential for up to $500 million in development and sales milestone payments. In addition to milestone payments, we are eligible to receive tiered high mid-single digit percentage royalty payments on sales of any product by Pfizer that includes Matrix-M® adjuvant.
Novavax now has license agreements and/or MTA collaborations with top global pharmaceutical companies and innovative biotech companies to evaluate our technology platform across infectious diseases and oncology.
Coronavirus Vaccine Clinical Development
We continue to evaluate vaccine safety, immunogenicity, and effectiveness through collaborative studies.
Phase 4 Postmarketing Commitments
In May 2025, we announced that the U.S. FDA, as a part of its BLA approval of Nuvaxovid™, requested that we conduct as one of our postmarketing commitments ("PMCs") a Phase 4 prospective, randomized, double-blinded, placebo-controlled efficacy and safety trial in individuals aged 50 through 64 without high-risk conditions for severe COVID-19. Although the BLA has since been transferred to Sanofi, we were conducting the PMC trial on behalf of Sanofi which agreed to reimburse us for 70% of the PMC costs, capped at agreed upon cost estimates. We updated our total expected costs and the amounts of variable consideration for research and development transition services that support further regulatory approval and development of the COVID-19 Vaccine ("Sanofi Transition Services") to reflect the release of the PMC. Revenue related to the PMC was recognized in Licensing, royalties, and other revenue over time using an input method, consistent with Sanofi Transition Services.
In addition, in October 2025, we initiated an additional PMC study evaluating the safety and immunogenicity of Nuvaxovid™ in the population of individuals for which Nuvaxovid™ is approved in the U.S., i.e., individuals 12 through 64 years of age with at least one underlying condition that puts them at high risk for severe outcomes from COVID-19 and in adults ≥ 65 years of age. Following the transfer of the U.S. marketing authorization, Sanofi is now responsible for the conduct of this study.
COVID-Influenza Combination and Stand-alone Influenza Program
Phase 3 Clinical Trial of CIC and Stand-alone Influenza Vaccine Candidates
In December 2024, we initiated a Phase 3 immunogenicity and safety trial for our CIC and stand-alone influenza vaccine candidates to evaluate the immunogenicity and safety compared to our COVID-19 Vaccine and a licensed seasonal influenza vaccine comparator in adults aged 65 and older. Our Phase 3 immunogenicity and safety trial completed enrollment with an initial cohort of approximately 2,000 participants. In June 2025, we reported data from this initial cohort, which showed both vaccine candidates induced robust immune responses across all antigens tested. Both vaccine candidates were well tolerated with reactogenicity profiles that were comparable to authorized comparators. While the Phase 3 immunogenicity and safety trial is not a pivotal study, the data will inform a future registrational Phase 3 program. We do not intend to make additional investments in these programs and are seeking a partner to advance both vaccine candidates.
Malaria
Malaria is a life-threatening disease caused by a parasite that infects mosquitoes and is subsequently transmitted to humans. According to the 2025 WHO World Malaria Report, in 2024, there were an estimated 282 million malaria cases and 610,000 malaria-related deaths worldwide. We believe malaria has the potential to be preventable through our partner-led R21/Matrix-M™ malaria vaccine, with the first doses distributed and administered across the African region in 2024 after having received authorization in 2023 in several countries and prequalification by the WHO.
R21/Matrix-M™ Malaria Vaccine
R21/Matrix-M™ malaria vaccine, formulated with our Matrix-M® adjuvant is developed by our partners, SII and the Jenner Institute, University of Oxford. We have an agreement with SII related to its manufacture of R21/Matrix-M™ malaria vaccine under which SII purchases our Matrix-M® adjuvant for use in development activities at cost and for commercial purposes at a tiered commercial supply price and pays a royalty in the single- to low-double digit range based on vaccine sales for a period of 15 years after the first commercial sale of the vaccine in each country.
In December 2023, the WHO announced it prequalified the R21/Matrix-M™ malaria vaccine to prevent malaria disease in children caused by the P. falciparum parasite in endemic areas. Prequalification status enables United Nations agencies to procure the vaccine for eligible countries and enabled rollout of the vaccine in mid-2024. The WHO recommended that the R21/Matrix-M™ malaria vaccine be administered in a four-dose schedule beginning at five months of age.
In July 2024, first commercial doses of R21/Matrix-M™ malaria vaccine were administered to children in Cote d'Ivoire and South Sudan. As of September 2026, over 40 million doses of R21/Matrix-M™ malaria vaccine have been distributed and are available in 25 countries.
Business Highlights
Third Quarter 2026 and Recent Highlights
•In October 2026, we earned a $125 million milestone payment with the initiation of Sanofi's Phase 3 influenza-COVID-19 combination vaccine trial in Europe
◦Sanofi confirmed to us their intent to initiate a U.S. Phase 3 CIC trial in 2027 to support U.S. approval. We are eligible to receive an additional milestone of $225 million upon a U.S. commercial launch of a CIC vaccine following successful completion by Sanofi of clinical and U.S. FDA regulatory requirements.
•Manufacturing technology transfer to Sanofi for Nuvaxovid™ is expected to be completed in mid-2027, which would trigger a $75 million milestone payment to us.
•In August 2026, our commercial partners received approvals for the XFG-adapted Nuvaxovid formulation in major markets, including the U.S., the EU and Japan.
•Sanofi initiated commercial activities for the 2026-2027 COVID-19 vaccination season in the U.S. and select international markets.
•Takeda initiated commercial activities for the 2026-2027 COVID-19 vaccination season in Japan.
•Our differentiated C. difficile (C. diff) vaccine program is on track to advance into the clinic as early as 2027.
Sales of Common Stock
In August 2023, we entered into an At Market Issuance Sales Agreement (the "August 2023 Sales Agreement"), which allowed us to issue and sell up to $500 million in gross proceeds of shares of our common stock pursuant to a registration statement on Form S-3 (the "Shelf Registration Statement"), and terminated our then-existing At Market Issuance Sales Agreement entered in June 2021. The Shelf Registration Statement expired in February 2026, terminating the August 2023 At-the-Market Sales Agreement. No sales were recorded under the August 2023 Sales Agreement since the second quarter of 2024.
Critical Accounting Policies and Use of Estimates
The discussion and analysis of our financial condition and results of operations are based upon our accompanying unaudited financial statements and the unaudited accompanying notes, which have been prepared in accordance with generally accepted accounting principles in the United States.
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, 2025, as filed with the SEC.
Recent Accounting Pronouncements Not Yet Adopted
See "Note 2―Summary of Significant Accounting Policies" included in our unaudited 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 our unaudited consolidated financial statements and notes set forth in this Quarterly Report. Our historical results are not necessarily indicative of the results for any periods in the future.
Three Months Ended September 30, 2026 and 2025
Revenue
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Three Months Ended September 30,
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| 2026 | 2025 | Change | |||||||||||||||
| Revenue (in thousands): | |||||||||||||||||
| Product sales | $ | 25,693 | $ | 13,442 | $ | 12,251 | |||||||||||
| Licensing, royalties, and other | 42,605 | 57,003 | (14,398) | ||||||||||||||
| Total revenue | $ | 68,298 | $ | 70,445 | $ | (2,147) | |||||||||||
Revenue for the three months ended September 30, 2026 was $68.3 million as compared to $70.4 million for the same period in 2025, a decrease of $2.1 million. Revenue for the three months ended September 30, 2026 was primarily comprised of revenue from commercial supply sales of COVID-19 Vaccine, royalty revenue, transition services and technology transfer under the Sanofi CLA, and revenue from the supply of adjuvant and other materials. Revenue for the three months ended September 30, 2025 was primarily comprised of licensing revenue from transition services and technology transfer and commercial supply sales of COVID-19 Vaccine and royalty revenue under the Sanofi CLA and milestone and royalty revenue with Takeda.
Product sales
Product sales for the three months ended September 30, 2026 were $25.7 million as compared to $13.4 million for the same period in 2025, an increase of $12.3 million. Our Product sales related to commercial supply sales of our COVID-19 Vaccine, and revenue from the supply of adjuvant and other materials.
The categories of Product sales were as follows:
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Three Months Ended September 30,
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| 2026 | 2025 | Change | |||||||||||||||
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Product sales (in thousands)
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NuvaxovidTM sales(1)
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$ | - | $ | (332) | $ | 332 | |||||||||||
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Supply sales(2)
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25,693 | 13,774 | 11,919 | ||||||||||||||
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Total Product sales
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$ | 25,693 | $ | 13,442 | $ | 12,251 | |||||||||||
(1)NuvaxovidTM sales are sales of our COVID-19 Vaccine associated with APAs with governments and commercial markets, where we are the commercial lead for sales and distribution, made through pharmaceutical wholesale distributors. During the three months ended September 30, 2025, Nuvaxovid sales include excess gross-to-net deductions primarily due to updates to estimated product returns.
(2)Supply sales include commercial sales of COVID-19 Vaccine, adjuvant sales, and other material sales to our partners.
Licensing, royalties, and other
Licensing, royalties, and other revenue during the three months ended September 30, 2026 was $42.6 million as compared to $57.0 million during the same period in 2025, a decrease of $14.4 million. The decrease was primarily due to a decrease in licensing revenue under the Sanofi CLA.
Licensing, royalties, and other revenue were comprised of the following:
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Three Months Ended September 30,
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| 2026 | 2025 | Change | |||||||||||||||
| Licensing, royalties, and other (in thousands) | |||||||||||||||||
| Sanofi | $ | 18,779 | $ | 48,294 | $ | (29,515) | |||||||||||
| Takeda | 7,359 | 6,445 | 914 | ||||||||||||||
| Serum | 5,341 | 2,264 | 3,077 | ||||||||||||||
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Other partners(1)
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11,126 | $ | - | 11,126 | |||||||||||||
| Total licensing, royalties, and other revenue | $ | 42,605 | $ | 57,003 | $ | (14,398) | |||||||||||
(1)Other partners revenue includes royalties, license fees, and other revenue associated with agreements with other partners such as SK bioscience, Co., Ltd.
Sanofi licensing, royalties, and other revenue were comprised of the following:
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Three Months Ended September 30,
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| 2026 | 2025 | Change | |||||||||||||||
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Sanofi licensing, royalties, and other revenue (in thousands)
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| Licensing: | |||||||||||||||||
| Milestones | $ | - | $ | - | $ | - | |||||||||||
| Royalties | 6,145 | 4,196 | 1,949 | ||||||||||||||
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Transition services and technology transfer:
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Upfront fee amortization(1)
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6,175 | (1,083) | 7,258 | ||||||||||||||
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Milestones amortization(1)
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2,677 | (645) | 3,322 | ||||||||||||||
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Cost reimbursements
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3,782 | 45,826 | (42,044) | ||||||||||||||
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Total Sanofi licensing, royalties, and other revenue
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$ | 18,779 | $ | 48,294 | $ | (29,515) | |||||||||||
(1)Upfront fee amortization and Milestones amortization represent revenue recognized during the period related to a portion of the $500 million upfront payment and the $50 million milestone for database lock of an existing Phase 2/3 clinical trial in 2024 that were deferred upon achievement and are recognized in revenue over time. During the three months ended September 30, 2026, we recognized a decrease of $0.9 million in the estimate of cumulative revenue recognized for the Sanofi Transition Services performance obligation to reflect changes in total expected costs and estimated variable consideration from expected cost reimbursements, primarily as a result of the release of the PMC.
Takeda licensing, royalties, and other revenue were comprised of the following (in thousands):
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Three Months Ended September 30,
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| 2026 | 2025 | Change | |||||||||||||||
| Takeda licensing, royalties, and other revenue | |||||||||||||||||
| Licensing: | |||||||||||||||||
| Milestones | $ | 4,717 | $ | 4,717 | $ | - | |||||||||||
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Royalties
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2,489 | 1,456 | 1,033 | ||||||||||||||
| Support services | 153 | 272 | (119) | ||||||||||||||
| Total Takeda licensing, royalties, and other revenue | $ | 7,359 | $ | 6,445 | $ | 914 | |||||||||||
Expenses
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Three Months Ended September 30,
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| 2026 | 2025 | Change | |||||||||||||||
| Expenses (in thousands): | |||||||||||||||||
| Cost of sales | $ | 23,488 | $ | 21,496 | $ | 1,992 | |||||||||||
| Research and development | 52,446 | 98,274 | (45,828) | ||||||||||||||
| Selling, general, and administrative | 23,645 | 31,655 | (8,010) | ||||||||||||||
| Impairment of assets held for sale | - | 97,038 | (97,038) | ||||||||||||||
| Total expenses | $ | 99,579 | $ | 248,463 | $ | (148,884) | |||||||||||
Cost of Sales
Cost of sales was $23.5 million for the three months ended September 30, 2026 including $2.1 million related to losses on firm purchase commitments, $1.1 million related to unutilized manufacturing capacity, and $1.6 million related to excess, obsolete, or expired inventory. Cost of sales was $21.5 million for the three months ended September 30, 2025, including expenses of $0.5 million related to excess, obsolete, or expired inventory and losses on firm purchase commitments, $1.8 million right of use ("ROU") asset impairment charges for contract manufacturing organization ("CMO") manufacturing capacity of excess quantities, and $3.5 million related to unutilized manufacturing capacity. The increase in cost of sales of $2.0 million was mainly driven by an increase in commercial supply sales of COVID-19 Vaccine, adjuvant sales, and other material sales to our partners. The cost of sales as a percentage of Product sales may fluctuate in the future as a result of changes to our customer pricing mix or standard costs.
Research and Development Expenses
Research and development expenses were $52.4 million for the three months ended September 30, 2026 as compared to $98.3 million for the three months ended September 30, 2025, a decrease of $45.8 million. The decrease was primarily due to cost containment measures to reduce our operating spend, as summarized in the table below:
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Three Months Ended September 30,
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| 2026 | 2025 | ||||||||||
| Research and Development Expenses (in thousands): | |||||||||||
| COVID-19 Vaccine | $ | 8,270 | $ | 26,534 | |||||||
| CIC and influenza vaccines | (1,169) | 12,987 | |||||||||
|
Other vaccine development programs
|
4,955 | 1,214 | |||||||||
| Total direct external research and development expense | 12,056 | 40,735 | |||||||||
| Employee expenses | 27,836 | 31,779 | |||||||||
| Stock-based compensation expense | 2,329 | 3,491 | |||||||||
| Facility expenses | 5,872 | 14,568 | |||||||||
| Other expenses | 4,353 | 7,701 | |||||||||
| Total research and development expenses | $ | 52,446 | $ | 98,274 | |||||||
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses were $23.6 million for the three months ended September 30, 2026 as compared to $31.7 million for the same period in 2025, a decrease of $8.0 million. The decrease in selling, general, and administrative expenses is primarily due to certain cost containment measures to reduce our operating spend, including a reduction in our global commercial footprint and administrative infrastructure.
Impairment of assets held for sale
During the three months ended September 30, 2025, we classified our corporate headquarters facility at 700 Quince Orchard, Gaithersburg, Maryland ("700QO") , together with certain related property and equipment and land parcel adjacent to the facility (collectively referred to as the "Disposal Group"), as held for sale. The carrying value of the Disposal Group was determined to be greater than its fair value less costs to sell and, consequently, an impairment loss of $97 million was recognized during the three months ended September 30, 2025, and recorded in Impairment of assets held for sale in the Consolidated Statements of Operations. In October 2025, we entered into a definitive agreement to sell the Disposal Group (see Note 16 to our unaudited consolidated financial statements).
Other Income, Net
|
Three Months Ended September 30,
|
|||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Other income (expense), net (in thousands): | |||||||||||||||||
| Interest expense | $ | (5,401) | $ | (5,482) | $ | 81 | |||||||||||
|
Loss on debt extinguishment
|
- | (28,714) | 28,714 | ||||||||||||||
| Other income, net | 7,028 | 9,178 | (2,150) | ||||||||||||||
| Total other income (expense), net | $ | 1,627 | $ | (25,018) | $ | 26,645 | |||||||||||
Total other income, net was $1.6 million of income for the three months ended September 30, 2026 as compared to $25.0 million of expense for the same period in 2025. The increase in other income, net is primarily due to a $28.7 million loss on debt extinguishment recorded in the three months ended September 30, 2025.
Income Tax Expense update
During the three months ended September 30, 2026, we recognized income tax expense of $1.7 million related to foreign income taxes and foreign withholding tax expense. During the three months ended September 30, 2025, we recognized income tax benefit of $0.7 million related to federal, state, and foreign income taxes, and foreign withholding taxes.
Net Income (Loss)
|
Three Months Ended September 30,
|
|||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Net Loss (in thousands, except per share information): | |||||||||||||||||
| Net loss | $ | (31,376) | $ | (202,379) | $ | 171,003 | |||||||||||
| Net loss per share, basic | $ | (0.19) | $ | (1.25) | $ | 1.06 | |||||||||||
| Net loss) per share, diluted | $ | (0.19) | $ | (1.25) | $ | 1.06 | |||||||||||
| Weighted average shares outstanding, basic | 164,924 | 162,353 | 2,571 | ||||||||||||||
| Weighted average shares outstanding, diluted | 164,924 | 162,353 | 2,571 | ||||||||||||||
Net loss for the three months ended September 30, 2026 was $31.4 million, or $0.19 per share, basic and diluted, as compared to a net loss of $202.4 million, or $1.25 per share, basic and diluted, for the same period in 2025. The decrease in net income (loss) during the three months ended September 30, 2026, was primarily due to a reduction in cost.
The increase in weighted average shares outstanding for the three months ended September 30, 2026, was primarily a result of common stock issued under our incentive programs.
Nine Months Ended September 30, 2026 and 2025
Revenue
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Revenue (in thousands): | |||||||||||||||||
| Product sales | $ | 86,747 | $ | 645,844 | $ | (559,097) | |||||||||||
| Licensing, royalties, and other | 177,763 | 330,496 | (152,733) | ||||||||||||||
| Total revenue | $ | 264,510 | $ | 976,340 | $ | (711,830) | |||||||||||
Revenue for the nine months ended September 30, 2026 was $264.5 million as compared to $976.3 million for the same period in 2025, a decrease of $711.8 million. Revenue for the nine months ended September 30, 2026 was primarily comprised of revenue from transition services and technology transfer under the Sanofi CLA, royalty revenue with Sanofi and Serum, licensing revenue under the Pfizer License Agreement, commercial supply sales of COVID-19 Vaccine and the supply of adjuvant and other materials. Revenue for the nine months ended September 30, 2025 was primarily comprised of revenue from the termination of our APAs with Canada ("Canada APA") and New Zealand ("New Zealand APA") of $575.7 million and $27.3 million, respectively, licensing revenue from the achievement of milestones under the Sanofi CLA and revenue from transition services and technology transfer under the Sanofi CLA, and licensing and royalty revenue with Takeda. The decrease in revenue is primarily due to nonrecurring Product sales from the termination of our Canada and New Zealand APAs and a decrease in Licensing, royalties, and other revenue from the Sanofi CLA and the Amended Takeda CLA, partially offset by revenue under the Pfizer License Agreement.
Product sales
Product sales for the nine months ended September 30, 2026 were $86.7 million as compared to $645.8 million for the same period in 2025, a decrease of $559.1 million. Our Product sales related to revenue from Nuvaxovid™ sales, which commenced in 2022, commercial supply sales of COVID-19 Vaccine, revenue from supply of adjuvant and other products, and
the termination of our Canada and New Zealand APAs. We transitioned the commercial lead for sales and distribution of our COVID-19 Vaccine to Sanofi resulting in a decrease in NuvaxovidTM sales and an increase in supply sales.
The categories of Product sales were as follows:
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
|
Product sales (in thousands)
|
|||||||||||||||||
|
Nuvaxovid™ sales(1)
|
$ | 9,558 | $ | 605,599 | $ | (596,041) | |||||||||||
|
Supply sales(2)
|
77,189 | 40,245 | 36,944 | ||||||||||||||
|
Total Product sales
|
$ | 86,747 | $ | 645,844 | $ | (559,097) | |||||||||||
(1) Nuvaxovid™ sales are sales of our COVID-19 Vaccine associated with APAs with various governments globally and commercial markets, where we are the commercial lead for sales and distribution, made through pharmaceutical wholesale distributors. During the nine months ended September 30, 2025, Nuvaxovid sales include excess gross-to-net deductions primarily due to updates to estimated product returns.
(2) Supply sales include commercial sales of COVID-19 Vaccine, adjuvant sales, and sale of other materials to our partners.
Licensing, royalties, and other
Licensing, royalties, and other revenue during the nine months ended September 30, 2026 was $177.8 million as compared to $330.5 million during the same period in 2025, a decrease of $152.7 million. The decrease was primarily due to a decrease in revenue under the Sanofi CLA and with Takeda, partially offset by an increase in revenue from other partners, including licensing revenue under the Pfizer License Agreement and royalty revenue from Serum.
Licensing, royalties, and other revenue were comprised of the following:
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Licensing, royalties, and other (in thousands) | |||||||||||||||||
| Sanofi | $ | 103,445 | $ | 288,027 | $ | (184,582) | |||||||||||
| Pfizer | 30,000 | - | 30,000 | ||||||||||||||
| Takeda | 8,309 | 33,657 | (25,348) | ||||||||||||||
| Serum | 14,530 | 8,812 | 5,718 | ||||||||||||||
|
Other partners(1)
|
21,479 | - | 21,479 | ||||||||||||||
| Total licensing, royalties, and other revenue | $ | 177,763 | $ | 330,496 | $ | (152,733) | |||||||||||
(1)Other partners revenue includes royalties and license fees associated with agreements with other partners such as SK bioscience, Co., Ltd.
Sanofi licensing, royalties, and other revenue were comprised of the following:
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
|
Sanofi licensing, royalties, and other revenue (in thousands)
|
|||||||||||||||||
| Licensing: | |||||||||||||||||
| Milestones | $ | - | $ | 175,000 | $ | (175,000) | |||||||||||
|
Royalties
|
10,340 | 4,196 | 6,144 | ||||||||||||||
|
Transition services and technology transfer:
|
|||||||||||||||||
|
Upfront fee amortization(1)
|
27,009 | 31,097 | (4,088) | ||||||||||||||
|
Milestones amortization(1)
|
11,990 | 14,163 | (2,173) | ||||||||||||||
|
Cost reimbursements
|
54,106 | 63,571 | (9,465) | ||||||||||||||
|
Total Sanofi licensing, royalties, and other revenue
|
$ | 103,445 | $ | 288,027 | $ | (184,582) | |||||||||||
(1)Upfront fee amortization and Milestones amortization represent revenue recognized during the period related to a portion of the $500 million upfront payment and the $50 million milestone for database lock of an existing Phase 2/3 clinical trial in 2024 that were deferred upon achievement and are recognized in revenue over time. During the nine months ended September 30, 2026, we recognized an increase in the estimate of cumulative revenue recognized for the Sanofi Transition Services performance obligation of $14.5 million as a result of changes in total expected costs and changes to estimates of variable consideration from expected cost reimbursements.
Takeda licensing, royalties, and other revenue were comprised of the following (in thousands):
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Takeda licensing, royalties, and other revenue | |||||||||||||||||
| Licensing: | |||||||||||||||||
|
Upfront fee(1)
|
$ | - | $ | 18,500 | $ | (18,500) | |||||||||||
| Milestones | 4,717 | 8,151 | (3,434) | ||||||||||||||
|
Royalties
|
3,100 | 6,456 | (3,356) | ||||||||||||||
| Support services | 492 | 550 | (58) | ||||||||||||||
| Tota Total Takeda licensing, royalties, and other revenue | $ | 8,309 | $ | 33,657 | $ | (25,348) | |||||||||||
(1)Upfront fee includes $14.5 million of nonrefundable upfront payments associated with the Amended Takeda CLA and $4.0 million of previously unrecognized consideration from the Original Takeda CLA.
Expenses
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Expenses (in thousands): | |||||||||||||||||
| Cost of sales | $ | 68,429 | $ | 50,936 | $ | 17,493 | |||||||||||
| Research and development | 218,611 | 266,444 | (47,833) | ||||||||||||||
| Selling, general, and administrative | 79,087 | 123,357 | (44,270) | ||||||||||||||
| Impairment of assets held for sale | - | 97,038 | (97,038) | ||||||||||||||
| Total expenses | $ | 366,127 | $ | 537,775 | $ | (171,648) | |||||||||||
Cost of Sales
Cost of sales was $68.4 million for the nine months ended September 30, 2026, including expenses of $6.3 million related to losses on firm purchase commitments; $4.3 million related to unutilized manufacturing capacity, $2.3 million right of use asset impairment charges for CMO manufacturing capacity of excess quantities, and $3.2 million related to excess, obsolete, or expired inventory. Cost of sales was $50.9 million for the nine months ended September 30, 2025, including expenses of $1.9 million related to excess, obsolete, or expired inventory and $1.8 million ROU asset impairment charges for CMO manufacturing capacity of excess quantities, and $7.0 million related to unutilized manufacturing capacity. The increase in cost of sales of $17.5 million was mainly driven by an increase in commercial supply sales of COVID-19 Vaccine, adjuvant sales, and other material sales to our partners. The cost of sales as a percentage of Product sales may fluctuate in the future as a result of changes to our customer pricing mix or standard costs.
Research and Development Expenses
Research and development expenses decreased to $218.6 million for the nine months ended September 30, 2026 from $266.4 million for the same period in 2025, a decrease of $47.8 million. The decrease was primarily due to cost containment measures to reduce our operating spend, as summarized in the table below (in thousands):
|
Nine Months Ended September 30,
|
|||||||||||
| 2026 | 2025 | ||||||||||
| Coronavirus vaccines | $ | 62,598 | $ | 55,358 | |||||||
| CIC and influenza vaccines | 2,387 | 32,607 | |||||||||
| Other vaccine development programs | 10,348 | 2,213 | |||||||||
| Total direct external research and development expense | 75,333 | 90,178 | |||||||||
| Employee expenses | 91,149 | 100,049 | |||||||||
| Stock-based compensation expense | 7,891 | 11,281 | |||||||||
| Facility expenses | 25,562 | 40,380 | |||||||||
| Other expenses | 18,676 | 24,556 | |||||||||
| Total research and development expenses | $ | 218,611 | $ | 266,444 | |||||||
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses decreased to $79.1 million for the nine months ended September 30, 2026 from $123.4 million for the same period in 2025, a decrease of $44.3 million. The decrease in selling, general, and administrative expenses is primarily due to certain cost containment measures to reduce our operating spend, including a reduction in our global commercial footprint and administrative infrastructure.
Impairment of assets held for sale
During the nine months ended September 30, 2025, we classified the Disposal Group as held for sale. The carrying value of the Disposal Group was determined to be greater than its fair value less costs to sell and, consequently, an impairment loss of $97 million was recognized during the nine months ended September 30, 2025, and recorded in Impairment of assets held for sale in the Consolidated Statements of Operations. In October 2025, the Company entered into a definitive agreement to sell the Disposal Group (see Note 16 to our unaudited consolidated financial statements).
Other Income (Expense)
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Other income (expense), net (in thousands): | |||||||||||||||||
| Interest expense | $ | (15,991) | $ | (16,723) | $ | 732 | |||||||||||
| Loss on debt extinguishment | - | (28,714) | 28,714 | ||||||||||||||
| Other income | 27,772 | 31,136 | (3,364) | ||||||||||||||
| Total other income (expense), net | $ | 11,781 | $ | (14,301) | $ | 26,082 | |||||||||||
Total other income (expense), net for the nine months ended September 30, 2026 was $11.8 million of income as compared to $14.3 million of expense for the same period in 2025, an increase of $26.1 million. The increase in other income (expense), net is primarily due to a $28.7 million loss on debt extinguishment in 2025.
Income Tax Expense update
During the nine months ended September 30, 2026, we recognized an income tax expense of $4.4 million related to foreign income taxes and foreign withholding taxes. During the nine months ended September 30, 2025, we recognized an income tax expense of $1.5 million related to federal, state, and foreign income taxes and foreign withholding taxes.
Net Income (Loss)
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Net Income (Loss) (in thousands, except per share information): | |||||||||||||||||
| Net income (loss) | $ | (94,254) | $ | 422,775 | $ | (517,029) | |||||||||||
| Net income (loss) per share, basic | $ | (0.57) | $ | 2.61 | $ | (3.18) | |||||||||||
| Net income (loss) per share, diluted | $ | (0.57) | $ | 2.53 | $ | (3.10) | |||||||||||
| Weighted average shares outstanding, basic | 164,264 | 161,811 | 2,453 | ||||||||||||||
| Weighted average shares outstanding, diluted | 164,264 | 168,195 | (3,931) | ||||||||||||||
Net income (loss) for the nine months ended September 30, 2026 was net loss of $94.3 million, or $0.57 per share, basic and diluted, as compared to net income of $422.8 million, or $2.61 per share, basic and $2.53 per share, diluted, for the same period in 2025. The decrease in net income (loss) during the nine months ended September 30, 2026, was primarily due to a decrease in total revenue and total expense.
The increase in weighted average shares outstanding for the nine months ended September 30, 2026 is primarily a result of common stock issued under our incentive programs.
Liquidity Matters and Capital Resources
Our future capital requirements depend on numerous factors including, but not limited to, revenue from our Product sales, milestone payments, royalties, and reimbursements under licensing arrangements with our strategic partners; our projected activities related to the development and commercial support of our COVID-19 Vaccine and our CIC and stand-alone influenza vaccine candidates, including significant commitments under various contract research organization, CMO and contract development and manufacturing organization agreements; the progress of preclinical studies and clinical trials; the time and costs involved in obtaining and maintaining 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 potential combination vaccine candidates, which are in various stages of development. Our ability to generate revenue from Product sales is subject to uncertainty specifically as it relates to our ability to successfully develop, manufacture, distribute, and market our updated vaccine and to successfully execute on our licensing arrangements with our strategic partners and our APAs, as discussed below. Additionally, our plans include our ongoing restructuring and cost reduction measures as a part of our Restructuring Plan and may also include raising additional capital through a combination of additional equity and debt financing, collaborations, strategic alliances, asset sales, and marketing, distribution, or licensing arrangements. New financings may not be available to us on commercially acceptable terms, or at all. If we are unable to obtain additional capital, we will assess our capital resources and may be required to delay, reduce the scope of, or eliminate some or all of our operations, or further downsize our organization, any of which may have a material adverse effect on our business, financial condition, and results of operations.
Sanofi Collaboration and License Agreement
In May 2024, we entered into the Sanofi CLA pursuant to which we received a non-refundable upfront payment of $500 million. As of September 30, 2026, we are eligible to receive additional development, technology transfer, launch, and sales milestone payments totaling up to $425 million related to our stand-alone COVID-19 Vaccine products and combination products containing our COVID-19 Vaccine and Sanofi's seasonal influenza vaccine ("CIC Products") and royalty payments on Sanofi's sales of such licensed products. In addition, for other vaccine products selected by Sanofi that include our Matrix-M™
adjuvant ("Adjuvant Products"), we are eligible to receive development, launch, and sales milestone payments of up to $200 million for each of the first four Adjuvant Products and $210 million for each Adjuvant Product thereafter, and royalty payments on Sanofi's sales of all such licensed products.
As of September 30, 2026, remaining Sanofi milestone payments of $425 million include $75 million related to COVID-19 Vaccine products receivable upon the completion of the technology transfer of our manufacturing process for the COVID-19 Vaccine products to Sanofi. We are eligible to receive milestone payments totaling up to $350 million in the aggregate with respect to the CIC Products and this total amount is outstanding. We are eligible to receive a $125 million milestone payment upon achievement of initiation of a Sanofi CIC Product Phase 3 trial in the US or Europe and a $225 million CIC Product-related launch milestone. In October 2026, Sanofi dosed the fifth patient in its Phase 3 influenza-COVID-19 combination vaccine trial in the European Union triggering the $125.0 million milestone payment (see Note 18 to our unaudited consolidated financial statements). We are eligible to receive royalty payments in the high teens to low twenties percent on Sanofi's net sales of such licensed products, which after royalty reductions, results in an effective royalty rate in the high single digits to sub-teens percentages on net sales of Sanofi's CIC Products and an effective royalty rate in the mid single digits to sub-teens percentages on net sales of Sanofi's Other Combination Products.
Beginning in 2025 and continuing during the term of the Sanofi CLA, we and Sanofi began to commercialize the COVID-19 Vaccine products worldwide in accordance with a commercialization plan agreed by us and Sanofi, under which we will continue to supply our existing APA customers and strategic partners, including Takeda and SII. Upon completion of the existing APAs, we and Sanofi will jointly agree on commercialization activities of each party in each jurisdiction.
Takeda Amended and Restated Collaboration and License Agreement
In April 2025, we entered into the Amended Takeda CLA which amends and supersedes the Original Takeda CLA.
Under the Amended Takeda CLA, on an annual basis, we will receive $2.0 million to compensate us for services provided by us under the Amended Takeda CLA. If Takeda receives marketing approval of the COVID-19 Vaccine in that year or such approval is not necessary for such year, we will receive an additional $8.0 million annual milestone payment, of which $5.0 million is creditable against royalties owed by Takeda in its fiscal year 2025 or thereafter. We are eligible to receive a tiered royalty as a percentage of Takeda's, its affiliates', and sublicensees' total net sales in the mid to high-teen percentages (subject to certain capped royalty reductions), commencing on April 1, 2024 and will continue until the later of (a) 20 years after April 29, 2025, (b) all our know-how licensed under the Amended Takeda CLA has become publicly available through no fault of Takeda, and (c) the expiration of the last valid claim in the intellectual property rights licensed by us to Takeda under the Amended Takeda CLA covering COVID-19 Vaccine in Japan.
Pfizer License Agreement
In January 2026, we entered into the Pfizer License Agreement for use of our Matrix-M® adjuvant. Under the terms of the agreement, Pfizer will obtain a non-exclusive license for Matrix-M® adjuvant for use with Pfizer's products in up to two disease areas. The agreement provides for an upfront payment of $30 million and we have the potential to receive up to $500 million in development and sales milestone payments. In addition to milestone payments, we are eligible to receive tiered high mid-single digit percentage royalty payments on sales of any product by Pfizer that includes Matrix-M® adjuvant.
Supply Agreements
As of September 30, 2026, we have $207.2 million of remaining obligations under APAs with certain countries globally, excluding the Vaccine Alliance ("Gavi"). These obligations include $133.9 million related to an APA with the Commonwealth of Australia ("Australia") for the purchase of doses of COVID-19 Vaccine (the "Australia APA") and $73.3 million related to various other countries. With respect to the Australia APA, as of September 30, 2026, $64.1 million was classified as current Deferred revenue and $69.8 million was classified as non-current Deferred revenue in our consolidated balance sheet. In December 2024, we entered into an amendment to the Australia APA pursuant to which, among other things, we acknowledged the cancellation by Australia of the delivery of certain doses of our COVID-19 Vaccine scheduled for delivery between the fourth quarter of 2023 and the fourth quarter of 2025 and we agreed to credit approximately $31 million of the advanced payment paid by Australia to us against outstanding invoices and invoices for the future delivery of approximately three million doses of COVID-19 Vaccine without requiring additional cash payments. In addition, the amendment provides for certain remedies for Australia, including return of unused credit, cancellation of doses, or termination of the Australia APA, in the event we are unable to gain regulatory approval of a variant COVID-19 vaccine or supply doses per the terms of the agreement. If we are unable to provide doses per the supply schedule as amended, after six months, Australia may seek to terminate the APA. The amendment also provides Australia with the right to cancel doses if we fail to timely notify Australia of
changes to our commercialization plans. In the event that we do not, on or before the relevant contractual deadlines, receive regulatory approval for, and deliver, the seasonally updated COVID-19 Vaccine, up to $92.5 million of deferred revenue may become refundable. Under the terms of the Australia APA, regulatory approval, which we can be achieved through multiple regulatory pathways, is required on or before certain deadlines. We believe such requirements can be satisfied by either (i) TGA approval of Nuvaxovid, or (ii) by TGA approval of a special access importation into the Australian market. We have been pursuing a special access importation from the TGA to help ensure our supply is available for Australia. We are awaiting a final decision on the outcome of its application for special importation. In light of these developments, if we are unable to receive regulatory approval by either means, we may seek alternatives to continued performance under the agreement. With respect to other obligations under APAs of $73.3 million, as of September 30, 2026, $38.1 million was classified as current Deferred revenue and $35.2 million was classified as non-current Deferred revenue in our consolidated balance sheet. Recognition of these amounts are dependent on delivery of doses or expiry of optional dose order quantities.
In November 2024, we entered into a settlement agreement with the Secretary of State for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the "Authority"), pursuant to which we and the Authority agreed to terminate the Amended and Restated Supply Agreement with the Authority and to fully settle the outstanding amount under dispute related to upfront payments of $112.5 million. We agreed to pay a refund of $123.8 million, including interest of $11.3 million to the Authority, in equal quarterly installments of $10.3 million over a three year period, ending in June 2027. As of September 30, 2026, pursuant to our settlement agreement with the UK, the remaining upfront payment previously received from the authority is classified as $30.0 million of Other current liabilities on our consolidated balance sheet.
In February 2024, we and Gavi entered into a Termination and Settlement Agreement (the "Gavi Settlement Agreement") terminating our APA with Gavi (the "Gavi APA"). In total, the Gavi settlement agreement is comprised of $700 million of potential consideration, consisting of $75 million initial settlement payment, deferred payments of up to $400 million that may be reduced through annual vaccine credits, and an additional credit of up to $225 million that may be applied against certain qualifying sales. As of September 30, 2026, the remaining amounts included on our consolidated balance sheet are classified as $225.0 million in non-current Deferred revenue for the additional credit that may be applied against future qualifying sales, $80.0 million in Other current liabilities, and $130.0 million in Other non-current liabilities. In addition, we and Gavi entered into a security agreement pursuant to which we granted Gavi a security interest in accounts receivable from SII under the SII R21 Agreement (see Note 6 to our accompanying unaudited consolidated financial statements), which will continue for the deferred payment term of the Gavi Settlement Agreement. On February 22, 2024, the claims and counterclaims were dismissed with prejudice.
2031 Convertible Notes
In August 2025, we issued $225.0 million aggregate principal amount of our 4.625% Convertible Senior Notes due 2031 (the "2031 Notes") consisting of (a) $175.3 million principal amount of 2031 Notes issued in exchange for $148.8 million principal amount of our 5.00% Convertible Senior Notes due 2027, and (b) approximately $49.7 million principal amount of 2031 Notes issued for cash, in each case, pursuant to exemptions from registration under the Securities Act and the rules and regulations thereunder. The 2031 Notes were issued pursuant to, and are governed by, an indenture, dated as of August 27, 2025, between the Company and The Bank of New York Mellon Trust Company, N.A. as trustee. For additional information on the 2031 Notes, see Note 11 to our accompanying unaudited consolidated financial statements.
Credit Agreement
In February 2026, we entered into the Credit Agreement with MidCap Financial Trust, as administrative agent. The Credit Agreement provides for a senior secured term loan facility of up to $330 million, available in four tranches. The first tranche of $130 million, of which $50 million was funded at closing, is available to be drawn, subject to customary conditions, through February 2028. Borrowings under the Credit Agreement bear interest, payable monthly in arrears, at a rate per annum equal to the one-month Secured Overnight Financing Rate ("Term SOFR") plus 5.00%, subject to a Term SOFR floor of 2.00%. The term loans mature in March 2031, at which time all outstanding principal and accrued interest are due and payable in full.
Cash Flows
As of September 30, 2026, we had $627.0 million in cash and cash equivalents, restricted cash and marketable securities as compared to $750.5 million as of December 31, 2025.
We funded our operations for the nine months ended September 30, 2026, primarily with cash and cash equivalents, proceeds from the 2031 Notes and the Credit Agreement, milestone payments under the Sanofi CLA, and revenue from Product sales. In accordance with our ongoing Restructuring Plan, we continue to restructure our global footprint including further reductions in our global workforce. We anticipate our future operations to be funded primarily by milestone payments, royalties, transition services and technology transfer and cost reimbursements under our Sanofi CLA, revenue from Product sales, our cash and cash equivalents and investments in marketable securities, and other potential funding sources including equity financings, which may include at the market offerings, debt financings, collaborations, strategic alliances, asset sales, and marketing, distribution or licensing arrangements.
The following table summarizes cash flows for the nine months ended September 30, 2026 and 2025 (in thousands):
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Net cash provided by (used in): | |||||||||||||||||
| Operating activities | $ | (199,472) | $ | (205,160) | $ | 5,688 | |||||||||||
| Investing activities | 134,316 | (98,750) | 233,066 | ||||||||||||||
| Financing activities | 36,877 | 34,341 | 2,536 | ||||||||||||||
| Effect on exchange rate on cash, cash equivalents, and restricted cash | (716) | 7,634 | (8,350) | ||||||||||||||
|
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(28,995) | (261,935) | 232,940 | ||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 256,052 | 545,292 | (289,240) | ||||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 227,057 | $ | 283,357 | $ | (56,300) | |||||||||||
Net cash used in operating activities was $199.5 million for the nine months ended September 30, 2026, as compared to $205.2 million of cash used in operating activities for the same period in 2025. The decrease in cash used in operating activities is primarily due to certain cost containment measures to reduce our operating spend, including a reduction in our global commercial footprint and administrative infrastructure.
Net cash provided by investing activities was $134.3 million for the nine months ended September 30, 2026, as compared to $98.8 million of cash used in the same period in 2025. The increase in cash provided by investing activities is primarily due to net cash proceeds from our investments in marketable securities and the completion of the sale of held for sale assets in 2026.
Net cash provided by financing activities was $36.9 million for the nine months ended September 30, 2026, as compared to net cash provided by financing activities of $34.3 million for the same period in 2025. The increase in cash provided by financing activities is primarily due to net proceeds from our Credit Agreement, offset by the net proceeds from the issuance of our Convertible Senior Notes due 2031.
Going Concern
We believe that our cash, cash equivalents, and marketable securities as of September 30, 2026, together with cash expected to be generated from Product sales and Licensing, royalties and other revenue, will be sufficient to enable us to fund our projected operations and capital expenditures through at least the next 12 months from the issuance of the financial statements included in this Quarterly Report on Form 10-Q.
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