Good day, ladies and gentlemen, and welcome to the Novavax Fourth Quarter 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] And as a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Ms. Erika Trahan. Ma'am, you may begin.

Thank you, operator. Good afternoon. I would like to thank everyone for joining today's call to discuss fourth quarter and full-year 2018 operational highlights and financial results. A press release of our earnings 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. Joining me on today's call are Stan Erck, President and CEO of Novavax; and John Trizzino, Chief Business Officer and Chief Financial Officer; Dr. Gregory Glenn, our President of Research and Development will also be available for the Q&A portion of the call. Before we begin our 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 business performance, conditions or strategies and other financial and business related matters, including expectations regarding revenue, operating expenses, cash usage in clinical developments 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 overtime. I will now turn it over to Stan to begin.

Thanks, Erika. Welcome to our fourth quarter and full-year 2018 earnings call. So, today's call will be relatively brief because we have provided you an update via a teleconference a few weeks ago concerning the Phase 3 results of ResVax. In 2018 and through the beginning of the first quarter of 2019, the Novavax's team has focused on advancing our two lead programs ResVax and NanoFlu. I'm happy to say that we have achieved significant and important results for both programs. As we highlighted on our call at the end of February, ResVax is the first RSV vaccine to demonstrate efficacy preventing RSV disease in a Phase 3 clinical trial. The successful Phase 2 results for NanoFlu that we delivered earlier this year provide us the opportunity to discuss with the FDA the use of accelerated approval for licensure of our vaccine. We are now prepared to make meaningful advances in both programs during 2019. I'll start today's call by providing an overview of our ResVax program followed by an update on NanoFlu. John Trizzino will then provide a summary of our financial results. After that, we will open up the lines for questions. So let’s get started with the ResVax overview. As we've discussed with you at length before, it will be difficult to overstate the rationale for developing an RSV vaccine for infants. Statistics show that RSV is the leading cause of hospitalization in infants in the U.S. especially in the first six months of life. It is the second-leading cause of infant mortality globally in children under one year of age. Although, we were disappointed to announce the Prepare trial did not meet the pre-specified criteria from primary endpoint, ResVax did however demonstrates statistically significant efficacy against hospitalization associated with RSV in lower respiratory tract infection at…

Thank you, Stan. Today, we announced financial results for the fourth quarter and full-year of 2018. For today's call I will focus on the key results for this quarter. The 12-month financial results can be found in today's press release. For the quarter, we recorded a net loss of $49.3 million or $0.13 per share compared to a net loss of $50.8 million or $0.16 per share in the fourth quarter of 2017. Revenue in the quarter decreased 41% to $6.1 million compared to $10.4 million for the same period in 2017. The Bill & Melinda Gates Foundation grant revenue is directly related to operating activities in the Prepare trial and so therefore this decrease in revenue is the result of completing enrollment of the Prepare trial in the second quarter of 2018. Related to our net loss for the quarter, R&D expenses decreased 13% to $43.4 million primarily due as the increased development activities at ResVax and lower employee related cost partially offset by increased development activities of NanoFlu. G&A expenses increased 8% to $9.2 million in the quarter, primarily due to higher professional fees. As of December 31, 2018, Novavax had $103.9 million in cash, cash equivalents, marketable securities and restricted cash. Net cash used in operating activities for the fourth quarter of 2018 was $45.3 million compared to $43.4 million in the fourth quarter of 2017. One additional note is that we decided to utilize the ATM this quarter. Even though our stock price is considerably below what we believe to be as a fair value, we concluded that it was more important to add to our balance sheet, as we negotiate with potential partners and regulators. As disclosed in the 10-K, we added $41 million to our cash position this quarter from our ATM and expect that this will give us more room to evaluate our options. This concludes my financial review and I'll now turn the call back to Stan for closing remarks.

Thanks John. To reiterate 2018 and since the beginning of 2019, Novavax team has remained focused on advancing our lead program for ResVax and NanoFlu. And prior to the results, we've achieved for both programs. I'd like to thank our current shareholders for their continued support. We look forward to updating you on our progress throughout the year. Operator?

Our first question comes from Kevin DeGeeter with Oppenheimer. Your line is now open.

Just a few for me. First, with regard to the potential Phase 3 study for NanoFlu, how are you guys thinking about the most likely comparator there. I guess, sort of interested commercially in Fluzone and Fluzone High-Dose, but there may not necessarily be a quadrivalent comparator. Do you think this compares against another quadrivalent? Or do you have discretion to choose the more commercially relevant comparator in Fluzone?

Yes, I think that's a great question. We haven't decided which one we're going to compare against what we achieved. Well, remember, what we set out to do, we showed that our vaccine is better than the best-selling vaccine in the premium price market, which we did. We've now done it in Phase 1 and Phase 2. Those results are in our pocket. So, the Phase 3 could be any number of options. And so, we'll talk with the FDA about it. You're right, Fluzone and High-Dose might be a trivalent and we might be encouraged to do it against quadrivalent and there are choices to do with out there. And so, we will decide that in discussions with the FDA.

Two more housekeeping questions for me than I'll get back in the queue. In terms of additional inflows under the agreement with the Gates Foundation, should we think of those continuing into the first half of 2019 or from a cash standpoint is that you largely squared up now the Prepare study is done and then John you mentioned there were $41 million raised on the ATM in first quarter of '19 so far. Can you just give us the share count to correspond with that?

I'll do the Gates Foundation first and we remain tied in with the Gates Foundation. Their view of our data on this trial is that we delivered what we have promised to them, and they like -- they are excited about the data, and I believe that they will work with us and not just through the rest of this year, but long beyond that to help us get licensure and product available for their countries. So, I think we're going to have a long-term relationship with probably and hopefully expand the investments they are making in this program. I think -- with Gates and everybody else, Kevin, I think the -- before the question comes out, with all this everybody is interested in this program. They like a lot of parts of the data that came out with the Phase 3 trial. And now the question is, is what's the pathway to licensure and we're going to be pretty aggressive about trying to convince regulatory agencies that we have the data that supports licensure?

Kevin, for the second part of your question on the $41 million raise off of the ATM in the first quarter of 2019, it was about 50 -- approximately 56 million of shares associated with that $41 million.

Our next question comes from Michael Higgins with William Blair. Your line is now open.

Congrats guys. If I could on NanoFlu, regarding the Phase 2, I believe you've mentioned that there may be an update coming on a later conference; so far you've provided Day 28th. So –[indiscernible] can you give us some update on the continued efficacy and safety profile of NanoFlu, and if so, what timepoint?

Hi, Mike, it's Greg here. We are going to provide an update, it's not in the near future, but we do have Day 56 and Day 180 [indiscernible], and so we'll measure their HAI and report on that. So, I don’t think we have a date yet for presentation of that data, we will publish it as well.

So, that's not something we should look for in press release, but something to be presented at the conference and [indiscernible] may have something coming in the fall then?

I think it would be sooner than that, so maybe…

I'm sorry, you broke up there. May be when?

Probably in Q2.

And then also, if the FDA agrees as we are looking that data [indiscernible] endpoint for Phase 3. Would this be against a particular strain, a couple of strains? And then, how does the success against strains given the play as you're looking at endpoints for the Phase 3?

Yes, so this is again, Greg. So, the comparison would be obviously against a licensed comparator vaccine, and we would look for non-inferiority against each of the homologous strains. So, assuming it will be quadrivalent vaccine, we would look to show non-inferiority against all four strains. We of course are very interested in the drifted strains as we [indiscernible] before, where antigenic drift and [indiscernible] adaptation are big issues. And so, we will [indiscernible] exploratory endpoints demonstrate how our vaccine works against those other strains especially with regard to H3N2 where this is a major problem.

Then just one on ResVax, it sounds like you've talked with KOLs partners. Obviously, you're working towards a regulatory discussion and at least to two regions. How would you say your outlook towards the partnership global versus the regional is, since the results have come from Prepare, more or less likely do you think [indiscernible] global partner versus regional?

Yes, it's too early to say, actually, that we talk to everybody. Everybody likes the data and it just depends on what the regulatory agencies say and it may depend on what the regulatory agencies say in Europe versus the U.S. or some other countries. We've got two major customers for this program. One is in lower middle income countries and the other one is in the high income countries. And within the high income countries, there are maybe two different pathways. So, we don’t know, but we're going to -- it's just the time issue and we’ll know probably within the next -- I don’t know to 90 to 120 days is when we expect to have most of these meetings. And so, [indiscernible] a lot more. So, we think there is a large -- this is -- sorry, there is -- we're putting together all the information that we have accumulated over the last four years and put it into a way that's -- can we put into a briefing book, so it's understandable. So, that takes a little bit of time and then they have to have anywhere from 30 to 45 days or more to review it before you can have a meeting. So, it's a little complicated, but we're getting there.

Yes, I'm sure it is. Just one quick follow-up would we have some feedback from you as you have those meetings go, once you have the minutes back or after you have those meeting?

Well, we have to see. I can't predict.

Our next question comes from the line of George Zavoico with B. Riley FBR. Your line is now open.

Let start with the FDA, EMA regulatory agency deliberations and potential outcomes. The EMA had been a little bit more lenient in terms of what the lower bound of their confidence interval would be for approval. So potentially, there may not be agreement between the FDA and EMA. So if the FDA says, you needed to post marketing or you need to another trial, and EMA says, go ahead and submit. Are you going to look for consensus or you're going to take two different paths? Or is it too early to tell about that as well?

The answer is it's just too early to tell, but I think taking two different paths on we are planning them -- we’ve always planned them filing with both and around the same time. And so, if we get two give answers, we'll file with the one that is looking for of a BLA.

And Greg, I thought I saw that you were scheduled to speak at the World Vaccine Congress in Washington or...

Yes, we are, yes.

Is there going to be ResVax, NanoFlu or do you have -- what are you going to…

We've haven't announced it yet, but I think it's going to be…

We have two presentation scheduled for ResVax there and the ESPID.

The other presentation is plenary, so yes. World Vaccine Congress I think that's 24th April, and then the ESPID is 7th May. ESPID is a plenary session for the European Society for Pediatric Infectious Diseases. That won't be me. I don't think we've announced. It will be one of the KOLs who will present that.

Okay. And finally, I have a question about the all-cause -- a decline in hospitalizations of all-cause respiratory infections. I mean, that means that, that's not necessarily RSV associated. Is it that RSV may contribute since it may be present or prevalent? It may impact the severity of flu or other respiratory infections. I'm trying to understand how that is different from RSV-associated lower respiratory tract infections?

Yes, so you know, it's a commonly assessed outcome for vaccines and I think we provided some information on the pneumococcal vaccine, which is a very, very good vaccine where the -- so, first of all, the final cause that would be the case definition without a pathogen diagnosis. So, the case of our vaccine, we saw a 25.3% reduction in all-cause for lower respiratory tract hospitalizations. That's a -- so that is for case definition of lower respiratory tract hospitalization, but no need for a diagnosis using PCR of RSV. So, it doesn't not require RSV detection, so the analog to that which I think we've cited in our investor presentation was a pneumococcal vaccine, which as you know is a very, very good vaccine, and it's all-cause effect is around 47%. So to get to your questions, how do you explain this from the pathophysiology standpoint? So, the all-cause effect with the RSV vaccine has three -- we would say three manifestations. One is to prevent the RSV, we can -- we detect in the trial. The second is to prevent RSV that we are unable to detect or we did not detect which is expected. And finally, there are instances where RSV is antecedent for a secondary bacterial pneumonia or bronchiolitis, et cetera. And so, those I would say people aren't feel with RSV vaccines are not surprised by the broader effect because RSV obviously is a leading cause of infant hospitalization and ubiquitous. So that effects of course is very, very important from the public health standpoint because it's affecting all-cause and we had the same effect for hypoxemia, 40% all-cause reduction is for hypoxemia over six months. And so, these are effects that are related to prevention of RSV, and how those I would say those three explanations for that mechanism of action.

And is that -- has this ever been a primary endpoint of any infectious agent that's probably...

No, where it comes up, no. It's a -- where it comes up, it's after vaccines are license. People look at these things in terms of the overall reduction of disease burden. That's -- and so, it's a major important factor for health economic, et cetera. So, you would hope your vaccine could have some broader effect, and we in fact see I think a very, very good -- these are very promising effect so. So, they tell you the vaccines are working and in a trial you just can't conduct -- you can't detect all the disease, but this is a broader net for assessment of the vaccine efficacy.

Our next question comes from Joel Beatty with Citi. Your line is now open.

This is Shawn Egan, calling in for Joel. Two for me on ResVax, when you think about partnership and talk you've had with them following top line or what has been the general feedback from prospective partners? And have either, or any expressed any interest to be involved in this upcoming regulatory interaction?

Well, you can't into too much detail on this, but we have a virtually all of the Company's goes well all of those company's not a program well. All of the Company's appreciate that are two secondary endpoints, hospitalizations and severe hypoxemia are large healthcare concerns and our shipping could be available for licensure based on those endpoints. And so, the question is how you get there. I think they're relying upon us to start up to be to make the arguments, and they were very much I'd like to participate with this once we get answers back. And so -- so that's as much as I can say from their shoes.

And then my second question. One of the themes that came out of the Data call was moving the potential administration timing earlier. What do you think about moving that earlier? If a subsequent study is needed, are there any real hypothetical safety risk to that early administration and give any data that supports it's being safe?

Well, yes, I think so the current practice for both influenza and pertussis is to immunize earlier. Influenza had any time in the pregnancy, pertussis is recommended for second trimester immunization, and globally used that way. So, I think what we did here is established a very strong. And I would say expected safety data based around our vaccine, and we've had to have discussions with regulatory authorities and how to extend that. We don’t see as a major hurdle, if we're to move the administration to an earlier time point in pregnancy.

Our next question comes from Eric Joseph with JP Morgan. Your line is now open.

Just a couple from us. I'm wondering if you can -- how you are thinking about the strategic optionality around NanoFlu at this stage in development? And whether you're thinking differently about the potential to monetize it, perhaps in any way ahead of the start of the Phase III? And then on the regulatory front with ResVax, sounds like most of your focus is with the FDA and EMA here. I'm just wondering if you could talk a little bit about any potential plans to consult with individual national health authorities outside of those primary regulatory bodies and which country you might be -- you might prioritize in that process or when they might take place?

Yes, this is Stan. So, regulatory questions, regulatory authorities, oh, I know, you want to monetize flu. So, start with flu, our -- once we have an answer from the FDA which I think we're going to get relatively soon on accelerated approval, we know what the pivotal trial is and the commitment to do it, if you can post licensure efficacy trial. Once, we know that we can -- we have choices and we can either do the pivotal, which by Phase 3 standards will be a modest investment. And then you come out with licensable data, and so the question is that when you monetize if you want to do it before that, and or do you want to wait and hesitate enhanced, and so we haven't made that decision yet wait until we hear back from the FDA what type of trial and next trial is going to be and the will make that decision. With respect to RSV, and yes, we're going to focus on look will do FDA and we will do EMA. We are planning to not going to I think the last fall. We went to talk with five different national regulatory agencies and had great feedback of go back to those folks in the next 3 to 6 months. And actually -- so, we will do all that, and we’re actually exploring other countries in which we conducting the clinical trial like Australia and South Africa. So, we've got lots of work to do and talk to all these places, let's see where is the best place to get our first sales of RSV vaccine.

And maybe just coming back to the Bill & Melinda Gates relationship, you talked about having an ongoing relationship with them in the foreseeable future. Is there -- just wondering if you can talk about sort of any financial commitments or contributions, I guess, in addition to the agreement that's been in place up-to-date, whether they might be coming in with -- I guess, with additional resources as these regulatory discussions are ongoing?

The discussions are ongoing. I think we have another $10 million or $15 million left in our original grant. So, we have another $16 million left that will cover expenses over the coming couple of quarter to finish up the commitments in the first grant. But with date in hand, we’re talking with them, and obviously, those discussions have to remain confidential until we reach agreement on it. But as I say, they want to see the products, get made product least, product distributed and their countries. And so, we have figure out how to jointly do that and best way, they're sitting on something that can go quickly into their countries I think.

Good. So, I think that’s it on the questions and we appreciate everybody listening and actually question. We will talk to you, if not before, we will talk to you in first quarter call. So, thanks.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you all may disconnect. Everyone have a great day.