ROCKVILLE, Md., Aug. 10 /PRNewswire-FirstCall/ -- Novavax, Inc. (Nasdaq: NVAX - News) today reported financial results for the second quarter ended June 30, 2007. Novavax reported a net loss of $8.2 million, or the equivalent of $0.13 loss per share, compared with a $6.4 million net loss, or the equivalent of $0.10 loss per share in the second quarter of 2006.
For the six months ended June 30, 2007, the Company reported a net loss of $16.6 million or $0.27 loss per share, as compared to a net loss of $11.9 million or $0.21 loss per share for the six months ended June 30, 2006. The increase in net loss was principally due to increases in research and development in advancing the Company's two lead virus-like particle ("VLP") based vaccine candidates against pandemic and seasonal influenza.
"Results for the second quarter and year to date were in line with our expectations including our use of cash. We are pleased with the progress of our two flu vaccine programs using our novel VLP approach. We are now a clinical stage vaccine company with the initiation of human clinical trials for our pandemic flu VLP vaccine," said Novavax President and Chief Executive Officer Dr. Rahul Singhvi.
Key recent accomplishments were as follows: -- Completed all pre-clinical studies for H5N1 pandemic flu vaccine; submitted and received clearance by the Food & Drug Administration ("FDA") of an Investigational New Drug ("IND") for our H5N1 pandemic flu VLP vaccine; and enrolled our first patient in our Phase I/IIa human trial which will evaluate safety and immunogenicity of different doses of our H5N1 pandemic flu VLP vaccine. -- Signed a license agreement with Wyeth Holdings Corporation covering non-exclusive use of a certain family of patents to complement our proprietary VLP technology. -- Advanced our seasonal flu vaccine program through preclinical studies with positive results to date. -- Initiated the detailed design for a GMP pilot plant facility at our Rockville, Maryland headquarters to allow manufacturing of Phase III clinical supplies for our VLP vaccine candidates. -- Re-structured and amended our convertible debt of $22 million by eliminating call features in these instruments. -- Appointed our interim CFO, Len Stigliano, as permanent CFO of Novavax. Some of the key milestones anticipated for the second half of 2007 are: -- Announcement of two new vaccine candidates in late stage discovery. -- Pre-clinical results for our seasonal flu VLP vaccine candidates. -- Completion of construction of our GMP pilot manufacturing facility for production of our VLP vaccine candidates. -- Interim results from our Phase I/IIa pandemic flu vaccine trial.
Second Quarter Financial Results
Revenues for the second quarter ended June 30, 2007 totaled $0.2 million, a decrease of $0.6 million from $0.8 million reported in the comparable 2006 period. Revenues consist primarily of ESTRASORB? sales and royalties paid by Esprit Pharma, Inc. for the period. Contract research and development revenues for the second quarter were $0.1 million, down from $0.4 million reported in the 2006 period due to delays in certain contract renewals.
Cost of products sold for the three-month period ended June 30, 2007 was $0.9 million as compared to $1.2 million for the same period in 2006. Included in the cost of products sold was $0.6 million in idle capacity costs at our manufacturing facility compared to $0.7 million of such costs in the comparable 2006 quarter. The company also incurred $0.5 million in excess inventory costs over market for the second quarter, which reflects its current production costs over the sales transfer price of ESTRASORB?.
Research and development costs for the second quarter increased to $4.2 million compared to $3.4 million for the comparable 2006 three-month period. The increase in R&D was primarily due to higher spending to support the continuing development of the Company's influenza vaccines.
General and administrative expenses were $3.4 million for the second quarter of 2007, as compared to $2.6 million for the same period last year. The increase in expenses was principally due to increased facility expenses of $0.4 million resulting from the new leased facility in Rockville, Maryland and $0.2 million of accounting related fees related to the implementation of FIN 48.
For the quarter, Novavax reported a net loss of $8.2 million, or the equivalent of 13 cents loss per share, an increase over the $6.4 million net loss, or the equivalent of 10 cents loss per share, for the comparable 2006 quarter.
As of June 30, 2007, Novavax had $61.2 million in cash, cash-equivalents, and short-term investments as compared to $73.6 million at December 31, 2006, a decrease of $12.4 million. The decrease of $12.4 million was principally due to operating losses incurred in the first half of 2007, partially offset by non-cash expenses of $2.5 million and changes in balance sheet items (principally accounts payable and accrued expenses) of $1.4 million. Based on our assessment of the availability of capital and our business operations as currently contemplated, in the absence of new financings, licensing arrangements or partnership agreements, we believe we will have adequate capital resources to sustain operations into late 2008.
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