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Novavax, Inc. (NASDAQ:NVAX) Ladenburg Thalmann 2018 Healthcare Conference Call October 14, 2018 12:00 PM ET
Executives
John Trizzino – Chief Business Officer and CFO
Analysts
Kevin DeGeeter – Ladenburg Thalmann
Kevin DeGeeter
The company is Novavax, a vaccine company with interesting programs in RSV and flu among others, presenting will be John Trizzino.
John Trizzino
Good morning, good afternoon everyone. Thanks for joining us. We’ve got a sparse crowd so far. But, I think it will be an interesting presentation. So, my name is John Trizzino. I am the Chief Business Officer and Chief Financial Officer for Novavax. We’re going to give you a corporate update today. We’re going to take a look at a little bit about the Company, our updates on our two key priority programs ResVax in the Prepare trial and then NanoFlu in our Phase 2 trial.
Let me just jump right into Novavax. Novavax is a late stage biotech company, focused on discovery and development of innovative vaccines for the prevention of serious infectious diseases. And with that in mind, a quick look at our pipeline, which shows you our focus in RSV respiratory syncytial virus with our lead program of ResVax and for the protection of RSV in infants via maternal immunization; and then, our two other programs within RSV for older adults. We would expect that program to continue; and then, lastly, in pediatrics where we’ve completed the Phase 1 trial which would be the continuation via an active immunization into the pediatric population, about six months of age.
NanoFlu is in a Phase 2 trial. This is our nanoparticle influenza vaccine with the Matrix adjuvant technology, also, which is an important future development as ultimately a combination vaccine for RSV and influenza using our two candidates with our Matrix adjuvant. Lastly, we keep in our pipeline because of the success of the Phase 1 trial an Ebola glycoprotein vaccine which we would expect to continue with the required and necessary funding and support.
I want to just jump right into our ResVax program. So, for those of you who are not familiar with RSV or respiratory syncytial virus, it is a significant and tremendous threat to infants and children with the illness and death with inflammatory disease of the lower respiratory tract. We’ll talk a little bit more about the disease burden, but suffice it to say that this is an important disease globally and one for which there is not a vaccine available today.
So, what has Novavax done this past year? Well, it’s been an exciting and active year. We have reached our enrollment target in the Prepare trial of 4,636 pregnant women with at least 3,000 of whom have received the vaccine ResVax. We have had and talked about quite extensively over this past year our informational analysis, which was a derisking of our Phase 3 trial, which was concluded at the end of ‘17, and talked about throughout this past year. I’ll talk a little bit more about that later in the presentation. Of course, we continue aggressively with all of our pre-commercialization activities. This has continued to be KOLs, patient education, physician education, policy support and payer strategy, and of course, the ongoing cooperation and conversation we have with the FDA and the support that they’ve given us via Fast Track designation and the financial support that we received from the Bill & Melinda Gates Foundation.
So, a quick look at our trial, Phase 3 trial design. I’m not going to go into a tremendous amount of detail here. But simply, to point out that it’s focused on medically significant symptomatic RSV disease and it’s looking at a primary endpoint first at 90 days then to a 120, 150 and 180 days. We talked about the number of participants over 4,600 women in a global study in 11 countries. It’s one IM, intramuscular injection for all pregnant women in a third trimester, of course important, vaccine is a comprehensive safety assessment and the efficacy assessment as the primary endpoints of the trial.
So, let’s talk about that, the primary endpoint. So, it’s important to understand the precision at which this trial was designed and the importance of these endpoints. So, first of all, it must be RSV detected and confirmed via PCR. It then must also be a symptomatic with one of these indications, so nasal flaring, chest wall. All of these symptoms of RSV disease and it then must be also one of the two following items. These are hypoxemia. So, this is blood oxygen level, or tachypnea, which is fast breathing. These are very important criteria that have a strong definition of RSV disease and the resulting benefit of the vaccine. Equally important are secondary endpoints, right, so hospitalization. This represents at least in high income countries the most significant impact as a result of this disease. It’s a long hospital say and a costly hospital say. In the case of more severe hypoxemia, we are talking about the most significant medical burden associated with that. So, these secondary endpoints are important to the totality of data that we would be presenting to the FDA.
So, as this was a multiyear trial, we ended up mentoring our fourth season before we recruited our final pregnant woman. And along the way, it was decided that was really important for us to be able to take a look at what we were seeing during the course of the trial. So, this was a super fertility futility analysis, if you will. This was not a low threshold. This was where we had a conversation with the FDA about coming up with this threshold that was approximately in excess of 40%. It was a threshold analysis. So, we remain blinded to this analysis while the independent statistician was unblended to the data. This resulted in us getting a up or down conclusion as to whether we were above the threshold or below the threshold without compromising the integrity of the trial. And at this point in time with 1,307 subjects, we were able to determine that we met the threshold. We were above the criteria set forth to the independent statistician. And with that in mind and knowing the final number of subjects that were included in this assessment, knowing the number of cases, we are able to determine that meeting the threshold meant that we were in the range of 45% to 100% efficacy at this point in time. Also keeping in mind that these 1,307 subjects and in turn babies were also part of the full Phase 3 trial design. So, this is not a subset to be included in that final data analysis, this was part of that trial. So, this significantly derisked the Phase 3 results for us.
Just a quick highlight here of the press release that was issued in May for the recruitment of 4,600 women and then the last child was born in July, which allowed us to get on the timeline and a pathway to a data readout in Q1.
So, we also made a determination that while it was pre-specified in the protocol that we would be having an interim analysis, based upon the number of subjects, based upon the cases that we’ve been monitoring them that there would be statistical significance to be able to conclude the trial and make this a final efficacy trial result, again with the readout in Q1. Again, in consultation with FDA, they’re supportive of this and that’s what we’re moving to. So, again, final efficacy data readout in Q1.
Lastly, for our pathway to licensure here. What you’re seeing is, again, recruited mothers, 3,000 infants born to mothers receiving ResVax, final efficacy analysis in Q1 ‘19 and pathway to a BLA — simultaneous BLA and MAA submission expected around Q1 of 2020. Let me run through some ResVax market opportunities here, so you can get the full picture of what our expectation is off of good data in Q1.
Well, again, to remind everybody, significance of this disease, number two cause of deaths globally in low income countries, only second only to malaria, the leading cause of hospitalization in the U.S. for less than six months of age. This is really important. Maternal immunization is generally accepted. The maternal immunization is — offers the best method to protect these youngest infants, right. This period of time from birth to three months of age to six months of age, they’re very vulnerable and therefore maternal immunization is the best path for that. Novavax is the only company in a Phase 3 trial for an RSV vaccine, and we’ve estimated that an RSV vaccine can be greater than $1.5 billion of revenue opportunity.
So, this year is just — was intended to be just a representation, we took into a lot of moms and their babies. This is what a sick baby looks like. This is something that no parent ever wants to experience. So, again, emphasizing the burden of disease in this population. It is also — if you’re also familiar with Synagis, monoclonal antibody that was used by MedImmune. This is not a vaccine for — only for high-risk, premature babies. This is a disease of the full term or near full term babies. 85% or more, at least 85% of RSV hospitalizations should be vaccine preventable because they would be born in the period of time after the vaccination of mom. I think, this is really important for people to understand. This is a disease of full-term babies as well.
It’s also a disease that occurs in a fairly long season. This is data just released by the CDC that was reiterating the fact that this is a season that could last as long as eight months. Babies that are six months of age and younger, would touch at least some portion of an RSV season and therefore would benefit from a maternal immunization to protect them. All this data combined, talks to the benefit of the vaccine and the disease burden.
Again, one more piece of data here just on infants less than six months of age, pointing out that 69% of all infants less than one year of age, 69% contract RSV. 77% of all these RSV infections occur within the first six months of life; and this results in over 400,000 medical interventions with something maximum reaching about 4% hospitalization rate. There is no question of the severity and implications of RSV disease.
Sizing the market, it is $1.5 billion as I talked about, but this is based upon vaccine of pregnant women in the third trimester, $3.9 million births, 95% of those are full-term births, and an 80% to 90% vaccination rate gets you to this market sizing. So, this is a tremendous market opportunity.
Running through some of these slides real quickly, because of time constraints here but policy implications are important. We’ve already engaged with ACIP and the ACIP working group to make sure that they’re engaged. The purpose of this is that a timely ACIP recommendation aligned with CBER [ph] recommended licensure, so that we can move quickly into commercialization. But all of these things are things that Novavax has taken into consideration from a policy perspective, from a payer perspective, and we’re actively engaged to ensure a successful launch.
Okay. Let me move quickly to our NanoFlu program. It’s been an active year here as well. We released data from our Phase 1/2 trial that was conducted in the fall and winter of ‘17. We released data in — earlier this year. Also, was submitted to a publication in New England Journal of Medicine, a peer-reviewed letter to the editor. And then we also — again strong cooperation with FDA about seeking an accelerated approval pathway which that is available to us as we understand from the FDA.
So, why is it so important? We all know that the flu vaccine efficacy is not what it needs to be, and there are many reasons for that. But 17% efficacy in older adults for Phase 3 and 2 is just abysmally poor. So, we need to do something about that and bring a differentiated vaccine to market. There is two reasons for this. One is this antigenic drift or evolution and also egg adaptation.
Why are these things important? Well, there is tree [ph] highlights the reason why. So, there is always a number of circulating viruses in any given year. The WHO and CDC do their best to identify the strengths to be in the vaccine, but we also know that there’s a lot of drift in evolution that occurs during the season. What this slide here shows that while Hong Kong was a strain in the vaccine, there was significant circulating virus of Singapore.
While you have to have a vaccine that protects against that, otherwise, you are going to have a poor performing vaccine, and that’s exactly what happened last year. We also have the effect of egg adaptation. And so, what we’re talking about here is that about almost 90% of all vaccines are egg-based. And this results in several problems here. These are viruses that infect humans are difficult to grow in eggs. They are passaged numerous times in order for them to grow in eggs and the passaging results in mutations and therefore creates problems as far as the match to the circulating strain.
So, what do we need to do? We need to have a better vaccine. NanoFlu represents that opportunity and it’s demonstrated a superior immune response relative to egg-based vaccine. So, NanoFlu is recombinant nanoparticle technology, it’s non-egg-based and it’s adjuvanted with our proprietary Matrix-M technology. This results in an exact genetic match the recombinant technology allows us to match directly to the circulating strains, but you are also getting a broader immune response as a result of the adjuvant.
So, the data that came from our Phase 1/2 trial supported that benefit because as we see as much as a 64% higher response of NanoFlu again compared to the Sanofi high dose. So, this is a higher dose, the market leading vaccine in the older adult population against the drifted strain that I talked about with you before. This was not the strain that was recommended in the vaccine but this was identified as a circulating strain, a dominant circulating strain that was not identified in the vaccine. And so, this is critically important for the benefit and differentiation of our vaccine and why bringing this vaccine to market can one, improve public health; and two, position us as a differentiated in a very crowded market and therefore allow us to grab market share away from Sanofi high dose.
In a separate trial, as you know in the bottom, and this is really important, is that Sanofi high dose, their own trial against their standard dose vaccine and demonstrated a superior benefit for their standard dose. We’re not measuring ourselves against the standard dose, we’re measuring ourselves against the high dose. So, we’re measuring ourselves as what is believed to be the best flu vaccine in the market in the older adult population, again positioning ourselves for a differentiated product.
All of this data was published in the, as I said in the peer-reviewed letter to the New England Journal Medicine. So, it’s critically important. It’s a validation of the work that was done in that Phase 1/2 trial and sets the stage for our Phase 2 trial design. So, what are we doing? We are coming back the next year; it’s going to be a confirmation of the data that we saw. We’re looking at dose and formulation in this trial. We’re looking for adjuvant effect with and without adjuvant. The intent here is for us to be able to go back to the FDA with this Phase 2 data, knowing that accelerated approval opportunity is available to us and has an end-of-Phase 2 to meeting, confirm what their Phase 3 trial design would look like and then be able to go into the Phase 3 as an immunogenicity-only trial against an active comparator and that would allow us to move to licensure very quickly. So, that’s what this slide says, jumps ahead a little bit, but the accelerated approval pathway is available to us. We do need to have a conversation with FDA in a Phase 2 — end-of-Phase 2 meeting.
But again, let me read this specifically. For NanoFlu, this means we can conduct the Phase 3 non-inferiority immunogenicity clinical trial against the licensed comparator to obtain initial licensure accompanied by a commitment to conduct a post-licensure efficacy trial. A very fast pathway to market for our flu program, again repeating two important data readouts, Phase 2 trial for flu Phase 3 trial for ResVax in the Prepare trial.
The NanoFlu timeline here, as I said, first subject in last Monday, projected data Q1, and projected Phase 3 in the second half. A quick spin through our Novavax priorities. So, Thank you. Kevin, questions?
Question-and-Answer Session
Q – Kevin DeGeeter
A few questions. I mean, listen, first quarter of 2019 is going to be — a lot going on. At least, as we think about the flu program, define what really is a win in that study? A number of different arms in the study, what are you really trying to learn and how you will be able to evaluate sufficient differentiation, justifying moving into Phase 3?
John Trizzino
Yes. I think it’s going to look a lot like success, looks a lot like the data that we saw in the Phase 1/2 trial. It’s zeroing in on that exact dose and adjuvant combination, but I think probably most importantly is that confirmatory data being presented to the FDA and the FDA coming back and said in indeed in fact we see the value of a differentiated flu vaccine in the older adult population, we will grant you accelerated approval and therefore you can begin your Phase 3 trial on this immunogenicity only against the competitor in September 2019.
Kevin DeGeeter
And then, as you think about the RSV program and you plan for success with the maternal vaccination, sort of then the big question is, then what? I mean, this would be a fantastic day for patients at that point. But this is an extreme program and that we do have prior Phase 3 experience in an elderly population. If you can demonstrate clear efficacy from maternal perspective that says that this is a vaccine that could have a number of potential applications but those applications will require just some more data. So really two parts to that question. Do you want to take on some of that leg work in indications outside of maternal yourself or do you think that’s best on resource of a partner? And then second component of it, as you prioritize what’s more interesting, is it going back into an elderly population with different permits or COPD or the populations from which there is a significant unmet need?
John Trizzino
It’s a chart full of questions. So let me see if I can…
Kevin DeGeeter
You’ve got four minutes…
John Trizzino
Certainly great data from the Phase 3 trial would be a win by itself. I mean, this is the first ever vaccine for RSV in any population. This is a $1.5 billion market opportunity. So, the door swings wide open for success for Novavax and the public health community. But, it also, as you suggest says, hey, we have a construct that works. We now know that even in spite of the fact that we failed our Phase 3 in older adults for a variety of reasons which Greg and I can go on for a long time about why we think we have that problems in the Phase 3, but this reinvigorates us to pursue again an older adult vaccine or high dose population or COPD. We had compelling data that we were able to identify in our Phase 3 trial that COPD population and the benefit to the COPD population that is a significant value in. And so, therefore, we would absolutely pursue that post maternal data. And there’s no question that that is a valuable opportunity for us and would pursue that aggressively and actively.
Also keep in mind, there is also a pediatric vaccine that’s still in the pipeline. This is a Phase 1 trial that we now did several years ago. And we are now laser focusing on maternal but we would also come back to pediatric. This is an active vaccine of kids greater than six months of age, but there is still significant burden of disease in that six-month to two-year or six-month to five-year population.
Kevin DeGeeter
And then, the Holy Grail of course in the context of respiratory disease would be some sort of protection against both RSV and influenza. From a straightforward formulation perspective, would it be functional to do a recombinant RSV vaccine and recombinant flu vaccine and the same formulation? Is that a logical next step in the Company?
John Trizzino
Yes. The beauty of that is we have all of the elements of that combination. We have the recombinant RSV vaccine, we have the recombinant nanoparticle vaccine and we have an adjuvant — a proprietary adjuvant that we know will help that combination. I think every time we’ve talked about the combination of RSV and influenza vaccine, everybody says well of course. RSV, lesser known than influenza and pneumonia, but nonetheless, there’s a growing awareness of the significance of RSV in the older adult population, or specifically in the higher risk populations. And why not? In fact, there would be a significant benefit to be able to take a combination vaccine to the market that would deal with both of these very significant respiratory diseases.
Kevin DeGeeter
And then just lastly, unfortunately it’s probably pretty tight on time, but ACIP, critically important for RSV?
John Trizzino
ACIP, no question, it’s something that I focus on very carefully. And that is any vaccine without the support of ACIP is not going to be a success. And so, therefore, we’ve been working diligently with the KOL community, with the ACIP working group to inform them of everything that we’re doing. We keep them updated on our clinical trial activity. We share all of our disease burden analysis that we’ve done, all of the published literature. So, we’re actively engaged with them. We would then have to do pharmacoeconomic analysis. But the timing with ACIP becomes critically important, from licensure to the ACIP recommendation has to a very tight timeline, since you’re not delayed. also important is obviously EU filing, so the MAA application timing wise is what you want to be able to launch this globally as quickly as you can.
Kevin DeGeeter
And then, just lastly, I think just a minute or so. And that just is, as you think about for RSV opportunities outside of traditional markets in North America and Western Europe, what’s the right mechanism to make sure this product makes its way into a broader, more global opportunity and that kind of gets back to some of the work you’ve done with Gates [ph] previously?
John Trizzino
Well, I’ll isolate Gates [ph] for a second, because that’s how I hope concludes up our pathway of low income countries and the distribution network via GOBI and UNICEF for low income countries. But then, there’s kind of the high income countries and then the middle income countries, I think partnering becomes important for us at that point. While little Novavax has accomplished a lot of things, launching globally might be a little bit out of our reach. And so to accelerate that launch and that revenue generation, a partner would probably be the right thing to do.
Kevin DeGeeter
Perfect. Well, with that we’ll have to wrap it on time. Thanks.
John Trizzino
Okay. Thank you very much.
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