Novavax Inc (NVAX) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Novavax Fourth Quarter 2020 Financial Results Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Ms. Silvia Taylor. You may begin.

Thank you. Good afternoon, everybody, and thank you to all of you who have joined today's call to discuss our fourth quarter and full year 2020 operational highlights and financial results.

A press release containing our results is currently available on our website at novavax.com, and an audio archive of this conference call will be available on our website later today. We are also filing our 10-K this afternoon.

Joining me today are Stan Erck, President and CEO, who will provide an overview of our progress to date; Dr. Gregory Glenn, President of Research and Development, who will provide an update on our global clinical trial activity and regulatory pathway; John Trizzino, Chief Commercial Officer and Chief Business Officer, who will update us on our manufacturing scale up, partnerships and advanced purchase agreements; and Gregory Covino, Chief Financial Officer, who will briefly highlight our financial status. Additionally, Dr. Filip Dubovsky, Chief Medical Officer, will be available for the Q&A section at the end of today's call.

Before we begin with prepared remarks, I need to remind you that we will be making forward-looking statements during this teleconference that could include financial, clinical or commercial projections. Statements relating to future financial or performance, conditions or strategy and other financial and business-related matters, including expectations regarding revenue, operating expenses, cash usage and clinical development and anticipated milestones are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Novavax cautions that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time.

With that, I'd now like to hand the call over to Stan. For those of you following the accompanying slides, please turn to Slide 3.

Thank you, Silvia, and thank you to everyone for joining us this evening. I'd like to make some opening remarks regarding how we've progressed as a company and reflect at where we are headed in this coming year. And following that, we'll take some time for questions.

So the past year has been a whirlwind. We have completely changed the company in ways that would normally take several years to accomplish. While many businesses in the world have slowed down due to the pandemic, we've done the opposite, everything about our company has changed.

Before we get into our presentation, I'd like to thank all of our staff for the nonstop effort that each of them has made for an entire year. I'm afraid to say that I don't see a slowdown anytime soon. But having said that, everyone understands the importance of our mission and can take satisfaction from the accomplishments that have been made so far and know that they are part of a once-in-a-lifetime mission. I'd like to start our presentation by recounting for you a shortlist of what our staff has accomplished since our last annual earnings report.

We've enrolled over 50,000 participants in COVID-19 clinical trials. In the spring of last year, we completed enrollment in a Phase I/II trial in the U.S. and Australia. Between September and February, we initiated 3 efficacy trials in the U.S., the U.K. and South Africa, enrolling almost 50,000 participants.

We've shown that our vaccine is 96% effective against the original COVID-19 when tested in the U.K. trial and achieved 86% effectiveness against the U.K. variant strain in that same trial. In the South African trial, where the so-called triple mutant variant was circulating, we showed that our vaccine was 60% effective at preventing COVID disease in the portion of the study population that was HIV negative.

What sometimes gets lost in the discussion of our COVID-19 program is that we also completed a Phase III pivotal trial for our NanoFlu program and met or exceeded all 8 of our primary endpoints. We started last year with about 150 employees worldwide. We now have approximately 800 employees globally and will likely exceed to 1,000 employees sometime this summer. We started last year without any capacity to manufacture product.

In the last year, we have built a global network of manufacturing sites and partners in 10 countries, which total capacity for COVID-19 vaccines will exceed 2 billion doses on an annual basis by midyear. At the beginning of last year, we had $80 million in cash and a financial operating horizon of only 6 months.

In contrast, we ended the year with over $800 million and continue to build our financial strength. We have now secured over $2 billion of funding from our partners, including the U.S. government and CEPI, and the Bill and Gates -- the Bill & Melinda Gates Foundation, and have purchased commitments for our vaccine, representing the potential for several billion dollars in revenue in the next 12 months.

The combination of all of these accomplishments adds capacity and expertise that will be the foundation for Novavax over the long term and, most importantly, gives us the opportunity to provide the world, including countries of all income levels, with a safe and effective vaccine that can be used to help in the worst pandemic in the last century.

We are excited to share more details today on the progress we made during the historic year. I would now like to hand the call over to Greg Glenn to discuss highlights from our clinical development program for 2020 and the beginning of 2021.

Thank you, Stan, and maybe we can turn to Slide 4. This really has been a remarkable year. Over the past 12 months, we've moved rapidly to respond to the COVID-19 pandemic. We first identified a stabilized recombinant folate protein Novavax CoV2373, which I will call 2373 for short, as our vaccine candidate.

We identified this within 1 month of the SARS-CoV sequence being published. We also demonstrated the key role of our Matrix-M adjuvant for induction of potent immune responses when formulated together showed that these components elicited highly protected immunity in animal challenge models.

As you will see below, we've moved rapidly through clinical development and now have demonstrated the same high level of efficacy in humans. Our scientists are committed to transparency and publication in high-quality peer-reviewed journals, and we know with satisfaction we've met this goal through multiple manuscripts, a few of which you see here published in prestigious scientific journals, including the New England Journal of Medicine, Science and Nature.

So moving to Slide 5. Our recombinant protein saponin-based vaccine, 2373, offers a range of practical benefits, which we expect will optimize and expedite its global distribution. First, our candidate recombinant spike protein was designed to ensure stability, and as a result, can be stored at typical refrigeration temperatures, enabling distribution through standard cold supply chains.

Additionally, its ready-to-use liquid formulation of both the protein and the adjuvant markedly facilitates the administration of the vaccine. The adjuvant Matrix-M is a critical feature of the 2373 vaccine, which has both an immune-enhancing and dose-sparing effect, allowing us to produce more doses of 2373 with less antigen required per dose, while reducing immunity that exceeds that seen from a COVID-19 infection. This greatly augments our global capacity for vaccine manufacture and distribution.

On Slide 6, we provide an overview of our COVID-related clinical trials. The Phase I/II safety and immunogenicity trials demonstrated the key role of the adjuvant dose sparing and the immune responses that were all well in excess of convalescent sera. The data suggests the hallmark of our vaccine is the induction of high levels of functional immunity and has an excellent safety profile.

In addition, this study confirmed the 5-microgram dose for the antigen. I want to note that there are several other immunogenicity trials that have already or will be starting soon in India, the Czech Republic and Japan that will help to extend global access to our vaccine. For today, I'm going to focus on the results of our efficacy studies.

During their conduct, the dramatic evolution of the virus occurred, and we were first to demonstrate efficacy against all 3 major circulated strains. This has led to vital insight for public health and a unique opportunity to demonstrate the utility of our technology in the face of an evolving COVID-19 virus.

Let's begin by talking about our Phase III trial in the U.K. on Slide 7. After initiating our trial in September 2020, with the support of U.K. vaccines task force and the NIHR registry, we were able to rapidly enroll over 15,000 participants, 27% of whom were over the age of 65.

Our top line interim analysis showed an overall efficacy of 89%. However, during the conduct of this trial, the virus evolved, and against the original COVID strain, similar to the viruses seen in the mRNA trials, we demonstrated best-in-class efficacy of 96% with the B117 variant, a strain that appeared during the trial, we observed an 86% vaccine efficacy. This latter strain is growing in prominence in the U.S., and it's worth noting that the U.K. data suggests that 2373 will perform well in the U.S. amid rapid viral evolution that's trending heavily in this direction.

Although the primary endpoint has been met, additional cases have been collected and a final analysis will be available in the coming weeks. Considering the pathway to authorization, we initiated a rolling submission with nonclinical data with MHRA in the U.K. We plan to file for authorization by early second quarter after we have gathered sufficient data from our U.K. trial and completed CMC requirements.

Moving now to our Phase IIb trial in South Africa on Slide 8. We enrolled a diverse study population of about 4,400 participants, including 245 medically stable HIV-positive adults. We achieved our primary efficacy endpoint in the overall population, demonstrating a significant level of efficacy at 49%, including all participants. It's important to note that 2373 also demonstrated 60% efficacy in the population that was HIV negative, representing 94% of the volunteers.

During the conduct of the trials I mentioned earlier, the virus evolved, and during surveillance, the South African B1351 variant was widely circulated during our trial, accounting for 93% of sequence cases. Although 1/3 of the study participants were seropositive at baseline, these antibodies did not seem to prevent infection with 1351, again, suggesting that prior COVID-19 infection may not protect against subsequent infection with the B1531 variant.

However, 2373 did offer significant protection, even though the vaccine was derived from the original COVID-19 strain. This is not unexpected, as a qualitatively better and broader response here reflects the lessons learned from the Matrix-M adjuvant and NanoFlu vaccine that shows, in the face of evolution, we have these appropriate responses.

I would like now to direct your attention to Slide 9. We are pleased with the progress we've observed to date with our PREVENT Phase III efficacy trial in the U.S. and in Mexico, which we conducted in partnership with the NIH and the coronavirus prevention network. Briefly, the study design is a 2:1 randomized trial, enrolling over 30,000 subjects. You can see the primary endpoint is aligned with our previous trials and our interim analysis will be done with 72 cases and 144 final events.

Finally, we are encouraged to discover a highly motivated participant population during the enrollment process and we believe a 2:1 randomized study as well as the expectation of a crossover element played a major role in expediting recruitment.

If you look at Slide 10, we can -- completed enrollment within 2 months of initiating this event-driven trial in December of 2020. And now we are happy to report that we have a diverse study population of 30,000 participants, which is comprised of 20% Latin American, 12% African-American, 6% Native American, 5% Asian American, with approximately 13% of the individuals 65 and older. We expect to announce this interim data from the trial in the second quarter, dependent, of course, on the overall attack rate.

As of today, we are working to implement a blinded crossover for both our U.K. Phase III and PREVENT-19 trials. In these blinded crossovers, participants will receive active or placebo opposite to what placebos the participants initially received while still remaining blinded. This design ensures the integrity of the blinded studies and enables us to continue following participants for the duration of efficacy and safety. For PREVENT-19, our blinded crossover protocol has been submitted to the FDA, and the updated protocol, including the details of the crossover have been posted on our website under Resources.

So moving ahead to Slide 11. Regarding our regulatory pathway in the U.S., we are in ongoing discussions with the FDA to align on the data required for initiation of EUA, and continue to provide information to our open IND application. At this time, we expect to complete our EUA filing in the second quarter. Overall, we are very busy on the regulatory front, and we've also began enrolling submission process with multiple other regulatory authorities, including European Medicines Agency, Health Canada, the Australian Therapeutic Goods Administration and New Zealand's MedSafe.

We will continue to engage in dialogue with respective regulators as we complete our pivotal Phase III clinical trials in the U.K. and U.S., ensuring that we fully address all safety, efficacy and quality elements required for authorization.

As we look to the future for our 2373 clinical program, we'd like to highlight 2 areas of focus in the coming months. Our 6-month boosting protocol taking place in our Phase I/II trial in the U.S. and Australia and the development of the variant strain candidates.

On Slide 12, you see our Phase I/II trial in the U.S. and Australia, initiated in May 2020, provided positive data on 2373's immunogenicity and safety. The trial is continuing to offer valuable clinical insights with some participants now receiving a 6-month boost dose to examine the production of functional immune response. Our technical -- technology is suitable for boosting and agile enough to enable the rapid development of a bivalent vaccine approach that can address an evolving virus.

On Slide 13, as I mentioned then, we have also made significant strides in addressing the mutations of the COVID-19 arising around the globe, including exploring variant strain vaccines as stand-alone and bivalent candidates. We are evaluating these candidates in ongoing human primate studies and plan to initiate clinical evaluation in these candidates in mid-2021. We are leveraging the adaptability of both our vaccine technology and the manufacturing processes to evolve our strategy alongside the evolution of the virus.

So conclusion on Slide 14. We now have 2 independent trials demonstrating 2373's high level of efficacies at levels similar to that seen in the best results against the original virus train and efficacy against 2 variant strains coming out of the viral evolution. We also see an encouraging safety profile. We are proud of the clinical team, as Stan mentioned, that has achieved these milestones with 2373 to date and look forward to additional data in the coming months, including data from the PREVENT-19.

And with that, I'd like to turn it over to John Trizzino.

Thanks, Greg. I would like to bring your attention to Slide 15 now. As you can see from this slide, in the past 12 months, we have built an impressive global supply chain infrastructure that includes both owned and partnered facilities. This network is centered around our owned facilities in the Czech Republic and Sweden, partnerships with contract manufacturing organizations in the U.S., Canada, U.K. and Spain, and license agreements in India, South Korea and Japan.

The combined capacity for our COVID-19 vaccine globally will exceed 2 billion doses on an annual basis when we reach full manufacturing capacity, which is expected by about midyear. This global supply infrastructure securely positions Novavax as an integral part of the global solution to the COVID-19 pandemic.

Let me highlight some of the following important points. Novavax CZ in the Czech Republic is a large-scale, state-of-the-art manufacturing facility that is now producing our vaccine antigen. Matrix-M is now manufactured at multiple sites globally, with sufficiently committed raw materials for our adjuvant component of the vaccine. The strategic partnership with Serum Institute provides significant and immediate manufacturing capacity that will provide access to low and middle income countries. SK Bio and Takeda licensing partnerships offers additional capacity and access into South Korea and Japan, respectively.

In addition to the advanced purchase agreement in Canada, we have just recently signed an MOU for expanded manufacturing capacity in Canada at their biologics manufacturing center in Montreal.

Now on to the next slide, Slide 16. What we all have painfully come to know well this past year is that pandemics have no borders, and therefore, our response must be on a global scale. This mandated that Novavax respond in multiple ways to ensure fair and equitable access globally. First, as a function of our funding partners around the globe that include the U.S. government, CEPI, U.K. and BMGF, Bill & Melinda Gates foundation, then for the various countries around the globe that expressed an interest in our vaccine, and finally, country-specific manufacturing partners that allowed our technology to provide additional supply into India, South Korea and Japan.

So as you can see on this slide, we have various agreements that have been executed to date. Advanced purchase agreements totaling approximately 200 million doses, 110 million doses committed to the U.S. government with the potential for additional procurement, 1.1 billion doses jointly committed by Novavax and Serum Institute to the COVAX facility, and license agreements with Serum Institute, SK Bio and Takeda.

With that, I'll turn it back over to Stan to provide an update regarding our NanoFlu program on Slide 17.

Thanks, John. While we spent the majority of our time and attention this year developing our COVID-19 vaccine candidate, we remain committed to advancing NanoFlu through regulatory licensure. We announced the successful completion of our pivotal Phase III clinical trial in the first quarter of last year, achieving all primary objectives.

Additionally, in November, we published Phase II data in the clinical infectious diseases. We are currently exploring a variety of options related to commercializing NanoFlu. These options include developing 1 or more combination vaccines such as 2373 in NanoFlu, NanoFlu in RSV and potentially all 3. Based on data to be generated early this year, the plan is to bring 1 or more of these candidates into clinical trials later this year. As always, we will publish results of these studies as they become available. We believe that in the post-pandemic era, seasonal vaccination with combination vaccines will be a large commercial opportunity for our platform.

And with that, I will now hand it over to Greg Covino to provide our financial results.

Thanks, Stan. Hi, everybody. If you could please turn to Slide 18. So I think our press release does a pretty good job of running through the highlights of P&L activity quarter-over-quarter, in addition to laying out fourth quarter and full year financing activities. So I'm not going to repeat that here. We also just filed our 2020 10-K prior to or during the course of this call. So the 10-K also includes a summary of important business and financing events, including those which occurred subsequent to year-end. In particular, we've included an update on new supply agreements, and John just touched on that in his comments. And we make note of the substantial completion of a new January 2021 $500 million ATM.

So I would encourage everyone to please take a look at the 10-K. Overall, considering our year-end cash position, over $800 million, as you saw in the release, and the financing activity subsequent to year-end, we believe we are well capitalized and in solid financial position as we approach the commercial launch of our COVID-19 vaccine.

Back to you, Stan.

Okay. Turning to Slide 19. As we reflect on the extraordinary progress Novavax made in 2020, we remain focused on delivering key clinical and regulatory milestones as well as executing our global manufacturing and commercial plans in collaboration with our partners.

In parallel, we will continue to advance dialogue with global regulatory agencies as we seek authorization and licensures for 2373.

Before I open the call for questions, I want to thank our entire Novavax team for their incredible contributions this year. I would also like to thank our various partners, a few of which include the U.S. government, CEPI, the Bill & Melinda Gates foundation and the COVID-19 prevention network, whose immediate response to the pandemic and continued support help make possible our accomplishments during the year. Only through these combined efforts have we been able to achieve these outstanding developments and become a part of the global solution to the COVID-19 pandemic.

With that, I will now turn it over to the operator for Q&A.

(Operator Instructions) And your first question comes from the line of (inaudible) with Jefferies.

Congratulations on all the progress and success over the last year. I guess my first question is just related to your manufacturing. I'm hoping you can provide additional color around your manufacturing and where you are there. Are you able to provide any color on your monthly production capacity or your ability to stockpile vaccine right now? I guess related to that, how quickly would you be able to go from EUA authorization or approval to actually shipping vaccine? If you could provide any color there, that would be great. And I have 1 follow-up question.

Yes, this is Stan. I'll take that. So we have -- as we mentioned, so we tend to focus on manufacturing sites that manufacture the antigen. That's probably the most complex part of the manufacturing. And so we've established those in 10 countries, and they are now all making product at GMP scale. They're either doing it. They finished their engineering runs. They're making product in commercial scale. And the cadence of that production process depends in part on how many runs that they've put into their schedule. Those runs depend upon making sure we have enough raw materials, for instance, to make all those runs.

So there's some scrambling to get enough raw materials to make all the plants work at full speed, but I think we're getting there. So the expectation is that all of the plants will be at full scale by April. So in April, May, June, we should be finishing filling and finishing product in advance of regulatory approvals. We're now filling and packaging material, both in the United States and from Korea and finishing those in Europe and the U.S. And so we will have material that will be on the shelf when we have approval so -- for shipment.

Got it. Got it. That's very helpful. And I guess with respect to your ongoing nonhuman primate work with your variant vaccines, could we see that data in Q2? And I guess related to that, given your experience with 2373 in nonhuman primates, what would data portend or suggest as to the immunogenicity and efficacy of your variant vaccine in humans? Your thoughts there would be greatly appreciated.

Yes. This is -- thank you. It has turned out that the animal models were quite predictive. So we have very good efficacy in the nonhuman primates. So that's why we use them. They are not perfect models because they're not really in these models, but they are physiologic in that they require a vaccine-induced immunity to get to the vehicles and services. So I think it's overall bode quite well.

The other animal model I'd point to nonhuman primate is the baboons where we did some initial just sort of safety and immunogenicity studies, and they were quite predictive. So we like -- also like the mouse models. They all are telling us something. Nothing is completely aligned with human disease, but they've all been informative, and I think they all pointed us to the kind of efficacy we actually saw in the human trial, which is really a remarkable circle.

We always -- as soon as we have results that are -- that we think makes sense to publish, we get out to the peer review. We have a really good receptivity with high journals. So a quarter or 2, probably. We'll see. We're going to be always at the beck and call of peer review reviewers. So -- but we have great data, great science, and that's not unreasonable to expect we should have data in that time frame.

Your next question comes from the line of Eric Joseph with JPMorgan.

Just wanted to get a better sense of where discussions are with FDA on the path to in EUA for 2373. Does the current guidance for potential submission in second quarter anticipate filing after having efficacy data from PREVENT-19? Or do you still see a path to start in the process on the basis of the U.K. and South Africa trials? And then secondly, as a follow-up, as it relates to the planned trials with the new variants and bivalent vaccines. I guess, with FDA's guidance, sounding like immunogenicity would be sufficient for approval. There -- is the expectation of the trials that you're initiating, would they be sufficient for -- or they be intended for registration?

Well, Eric, I'll just make a quick comment, and then I'll turn it over to Filip Dubovsky, our Chief Medical Officer. We're operating on the assumption of the U.K. data could form the basis for EUA. We have, as you rightly pointed out, a good backup in the large pivotal trial. So that's sort of how we're organizing our submission and our submission strategy. So I think with that, I'll let Filip talk a little bit about the variant strategy.

I guess the other point about the Phase III studies is that the endpoints are really aligned between all 3 of them. So the FDA is well aware of what our endpoints are, and they've seen the protocols from the other studies as well. Onto the variant situation, we've gotten guidance from a bunch of different global regulators about the approach to getting these things licensed, and no one is suggesting we do efficacy studies. This is all about showing safety, but more importantly, non-inferior immune responses to the variant versus the original strain. And that's a strategy we plan to follow.

The studies we have in mind do 2 things. They look at the variants by themselves as well as in a bivalent format. We think the latter is really where we want to be. We think that the difference between the prototype strain and the current strains that are circulating in South Africa and Brazil represent a very broad range of antigenic spread, and that's what we're going to capture with our vaccines. We know we can do by bivalent easily. There's plenty of space in our vaccine for antigen doses that high. You know from our Phase I and Phase II studies, we went up to 25 micrograms without having problems with that. So we think we have a solution here to the problem.

Great. Maybe just as a quick follow-up. A, up to this point, can you say anything in terms of regionality, where you'll be conducting the planned trials with the bivalent candidate?

So the different regulators have given us slightly different study designs we need to take into account, and we haven't finalized exaction where the studies will be executed.

Your next question comes from the line of Charles Duncan with Cantor Fitzgerald.

Stan and team, congrats on a really -- executing well on a really difficult year. I had a question regarding the EUA filing. I guess in the U.K., what is -- can you provide any color on the rate-limiting steps? And maybe same question for the U.S., especially given the answer that you just gave on the previous question.

So Charles, good. I think that they both require similar categories of information, right, around the CMC and around the clinical. So just to give you color on the clinical, as you know, we unblinded because we had a positive interim efficacy that was a yes that we met our statistical success criteria. So that represents a final analysis. However, we continue to collect cases in a blinded fashion. And so we'll analyze those, just like you saw with Moderna and Pfizer, it's another sort of second analysis of the endpoint cases.

So we're doing that. And we expect to finalize most of that data probably in early April time frame. And then that would be -- that shortly thereafter, will be submitted to, frankly, to both regulators. So that's 1 piece. And then the other piece is the package around our CMC. So right now, I think those are -- created intensive efforts. And they -- we're looking to try to align both those submissions around the same time to get our MHRA packaging. There have been very good partners, lots of communication, so that's been quite helpful. And similarly, we'll have that kind of dialogue with the FDA, same topics. And as I mentioned, we are hoping that the FDA will view the U.K. package as a potential basis for licensure, but we also are really close on the heels of that information with the U.S. trial.

And so there could be some hybrid of those 2 trials, but a very robust package for the regulators with respect to safety and efficacy of our vaccine. And what I think makes it, as we've mentioned, so really important is we have done this in the context of evolving virus. And that's a tremendously valuable chunk of information, not only for us with the world, but I think regulators will like that as part of our presentation.

Okay. That's helpful, Greg. Second question that I had is regarding the U.S. PREVENT-19 trial. Neat thing is that you enroll it very, very quickly, 2:1 randomization to the experimental arm. But I guess, I'm wondering if you think that, that may, call it, modulate the case rate, if you will. Given that the case rate is falling, could you see a slightly slower case rate accrual in that trial, of course, not compromising the actual data?

We're -- this is Filip. We're all aware of the cases across the U.S., and I think we have a couple of things playing in our favor. One of them, as you saw the slide with the geographic diversity and the size in Mexico, so we really did span the United States, and additionally with the size in Mexico, is we have a good chance of hitting places that are hot.

I guess the other advantage we have is just the sheer size of this study. We were able to demonstrate convincing efficacy in a study of only 4,000 individuals in South Africa. Here, we have 30,000. So the case accrual is going to be a lot, lot faster. We know that variants are emerging in the U.S. On the other had, we know that this particular vaccine works against those variants, so we have high hopes of having a pretty robust response. What's going to likely be the critical path activity is actually the safety database. So we have guidance from the FDA to -- and we know exactly what they want to see. It's seeing how the people having 2 months safety after their second dose. So that's kind of the target we're thinking about as when we can wrap this up in the optimal package for the FDA.

But like Greg said, should we achieve the endpoints earlier, we'll have the interim analysis to bring to the FDA if they're dissatisfied with what we can bring to them from the U.K. and South Africa.

That's great Filip and Greg. I'll ask a question for John and/or Stan. You've built a big company quickly in this line of steer. And I guess, I'm wondering if you could provide a little bit of perspective on how you've been able to maintain quality in terms of standard operating procedures, et cetera, in terms of clinical conduct, manufacturing and other aspects of your business as you really establish this company as a potential leader?

Well, I'll take the call because the fun part of my job is bringing in and recruiting new people into the company, interviewing them. And that has been -- it's been fun because it's really quite an easy place to hire really good people. We have a technology, which is, from the very start, is clear that matches the problem. And we've got -- we've had good data all the way back from the earliest primate data that was probably better data than anybody else had. And so we've got a now momentum. We've got financial momentum that allows us to go as fast as we can. We've got the product that is clearly at the top of the list of vaccines for COVID, and then you've got a pipeline that can build on top of that. So it's actually a good part of my job.

Our next question comes from the line of Mayank Mamtani with B. Riley Securities.

Congrats on the progress. So maybe just piggybacking on the question addressed before. Can you, Greg, maybe comment on the FDA guidance document that was put out, just relative to your expectations, and I'm specifically talking about the lower and upper bound that is said there. Just curious, given you start off with a very high neutralizing titers. How should one think about when you go and forward and think about bivalence or even boosters specifically?

Well, there are some details that need to be defined about the assays. But I think what we have going for us is our vaccine is highly immunogenic, again. So -- and the other piece we have to give us some insights is the animal data seem to be really quite predictive for what we need to know. So I do think that there are some options we're considering around the assays themselves, exactly what and maybe some negotiations. But I'm not worried that non-inferiority is relatively low bar. And given that we can come up with the right measures, I think we should be -- we're not terribly concerned that, that's something we can cross.

That does need to get negotiated. The neutralizing assays have been somewhat of a challenge for people to develop. But we're a year into the epidemic and I'm confident we can come up with a way to take a look at the relative immune responses. And I -- is a relatively low bar, as I mentioned. So these don't have to be big trials. Actually, Peter marks noted that as well. I think it's a very attractive offer to go the way of flu and allow the strain change mentality to be taken up by a company. So that -- how does that boil down to what we might do? Well, we get to do a pivotal trial. It could be the next trial we do is structured to be a pivotal trial. And we won't be doing efficacy, as Filip mentioned. So that to me is quite attractive. And I don't know, Filip, if you want to add anything to what I said there.

No, but the FDA guidance specifically mentioned there's flexibility to have a discussion with them. And these are going to be science-based discussions, and we have our own ideas that we'll bring to the table and see if they can concur with us.

And maybe any update you could provide, what all this kind of means in terms of development in flu, because the vaccine efficacy study would probably be relatively difficult to conduct. So any update you have on that, just as an extension of the previous question? And then I just have 1 follow-up.

Not really. I mean we are -- as you know, in the background, we're thinking about how to do flu. Is there's some work going on in formulations right now. We haven't really announced a trial or what our clinical plans are yet. But we're extremely interested. And as you say, I mean, one of the things that we were kind of gratified to see with the variant is that we have this theme embedded in our flu data, but only really validated by immunogenicity that the adjuvant and the nanoparticle have the ability to give a broad -- qualitatively broad response, so it made the flu vaccine able to cope quite well with the strain genetic evolution, in this case, of H3N2.

So we're kind of -- we're gratified now both to see efficacy with the nanoparticle against RNA virus like we have, that's very high. And also, this idea that the broad immunity might result in protection against a really major -- in this case, this is a major antigenic drift away from neutralizing antibodies, as Filip mentioned, kind of at the extreme of what might be possible. And yet, our vaccine seems to be working pretty well against that. So I do think it does validate the technology, the Matrix-M, the importance of Matrix-M and the science we had around inducing immune responses to epitopes that might not normally be well seen in natural infection but are brought out by making the nanoparticle of vaccine. So good validation, I would say, with our clinical data.

Right. And the final question I had was in terms of supply in the late 2Q time frame when you are getting close to your filings. Any update on what those levels you would be at? And then how would you think about delivering the U.S. versus ex U.S., western economies at that point?

Well, it's okay. Well, it's not a complicated question. It's a complicated answer, I suppose. It is -- we plan on being in full production at all of our plants by the May-June time frame. And so if we get -- and we would have been building inventory to ship, our hope is that we -- I think our stated hope is that we'd be shipping -- be able to ship roughly 110 million doses to the U.S. government by July, and that's still our goal. So -- and then ex U.S. is going to be supplied from several different locations outside the U.S., and the first doses will go into the U.K., assuming that they have the first approval. And so we've got various sources for that.

Our next question comes from the line of Vernon Bernardino with H.C. Wainwright.

Congratulations on the progress. I think it can't be set of note that you guys are being mentioned in the same sentence as a much larger and much better financed vaccine players, and you've accomplished a lot in the past year. So congratulations from me also. I just have 1 question. A lot of my questions have already been asked. Have you considered a strategy of advancing the bivalent COVID vaccine candidate using a BLA pathway for full approval later this year versus going for an emergency use authorization? I ask because of the limitations, especially long term, what comes with EUA.

It's an interesting question, but our ability to license the variant is a strain change, and that depends actually on the prototype having a BLA. So I think in the first instance, we're going to have to follow the leader with the variants and be on the time lines that will be established by the prototype vaccine.

And when you do advance a bivalent COVID vaccine candidate, do you anticipate it -- that the second component will be a variant as part of the strategy and then the original or current as protein sequence? Or what -- how should we look at the bivalent? What comprises the bivalent vaccine candidate?

Our current concept is just that. So we think that the antigenic space, which equals immunologic space between the original strain and where it has evolved to now is quite broad. And we want to be able to bring immunologic solution to all the antigenic diversity. So right now, the strains that we are seeing in Brazil and South Africa seems to define the extreme of where the virus has evolved. So in the first instance, our first bivalent will be that sort of a product.

And then last question I have is, so obviously, these proteins, yours is a protein approach, exposing of a lot of immune activity. And therefore, there could be many different species of monoclonal antibodies, antibodies created against them. What do you anticipate as far as the kind of species and kinds of protection that you may see with your COVID vaccine that perhaps you also saw with the RSV and NanoFlu vaccine.

So maybe I could take a crack at that, and Greg can mop up. I mean, one thing we know is that we form native confirmation trimers, and that really has translated in the Phase I data that we published into high levels of neutralizing antibody, which means we got the confirmation right and the immune response we generated against that correct native confirmation, it works, it's functional. In that publication, we published a correlation between our neutralization response and our IgG response. It was very, very tight, like a Pearson's correlation of 0.94, 0.95. And what that told us is that the over the broad range of antibodies we did induce, it was all proportionally the same amount it was neutralizing.

So that gives us a lot of confidence that as we move these bivalent products forward, we can induce the same sort of neutralizing antibody. The animal work Greg described before will tell us in the next handful of weeks. And we know from our efficacy data that is paid off for us in the clinic. And remember, in the case of South Africa, that's the case where previous exposure to wild type, so previous infection with the prototype Wuhan strain did nothing to prevent illness with the South African variant, yet our vaccine was able to perform quite well. And that's really, we believe, a function of the adjuvant we use.

Perfect. Go ahead, Greg.

There's nothing really to add. That's a good...

Nothing to mop up.

Nothing to mop up

Yes. Well, then, congratulations, and I certainly look forward to that data because of the academic, and congratulations on the year-long progress.

Thank you.

You have no further questions at this time. And I will now turn the call back over to Mr. Stan Erck for any closing remarks.

Great. Well, you've heard our story. We've had just an unbelievable year. We're a significant company of size in many ways and expect to have an even more remarkable 2021. Look forward to telling you about it. Thank you all for joining. That's it.

And this concludes today's conference call. Thank you for participating, and you may now disconnect.