Novavax - Earnings Call - Q3 2020 (Q&A)
November 10, 2020
Transcript
Operator (participant)
Ladies and gentlemen, thank you for standing by, and welcome to the Novavax Third Quarter 2020 Financial Results Live Q&A Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker, Ms. Silvia Taylor, Senior Vice President of Investor Relations and Corporate Affairs. Please go ahead.
Silvia Taylor (SVP of Investor Relations and Corporate Affairs)
Good afternoon, and thank you to everyone who has joined today's call and webcast. Yesterday, we hosted our Third Quarter 2020 Operational Highlights and Financial Results Conference Call. Unfortunately, due to technical issues, we were unable to conduct a Q&A session. The purpose of today's call is for the investment community to pose questions related to our third quarter 2020 financial and operating results. As a reminder, a press release announcing third quarter results and an audio archive of yesterday's call are currently available on our website at novavax.com.
In addition, an audio archive of this conference call will be available on our website later today. Before we begin, 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 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. Joining me today are Stan Erck, President and CEO, Dr. Greg Glenn, President of R&D, and John Trizzino, currently Executive Vice President, Chief Financial Officer, and Chief Business Officer, and newly appointed to become Chief Commercial Officer and Chief Business Officer. I would now like to hand the call over to Stan.
Stan Erck (President and CEO)
Thanks, Silvia. Thanks to everyone joining us this afternoon. We truly appreciate everyone dialing in again today, following yesterday's technical difficulties. As we detailed yesterday, we made significant progress in the quarter, continuing through today. Novavax has accelerated its expansion in every functional area. With the ongoing and strong enrollment of our phase III clinical trial in the U.K., we are now just months away from phase III efficacy data for 2373.
We're planning to initiate our phase III clinical trial in the U.S. by the end of November. We are also enrolling well in South Africa in our 4,400-subject phase II-B efficacy trial. Both the U.K. and South Africa trials should be fully enrolled by the end of this month. And as you heard on the call, we are making great progress on activating eight commercial-scale manufacturing sites in seven countries. We expect to have global manufacturing scale in excess of two billion doses by the end of 2021, and with that, I will turn it over to the operator.
Operator (participant)
Thank you. As a reminder, ladies and gentlemen, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question will come from Eric Joseph with JPMorgan. Please go ahead.
Eric Joseph (Executive Director)
Hi. Good evening. Thanks for taking the question. My question yesterday would have been to follow up on your opening remarks and, Stan, kind of get your thoughts on the high efficacy rate that we saw yesterday with Pfizer's top-line data with their COVID vaccine, just to also get your sense on what, having seen such a high efficacy rate, where that places expectations with 2373. And to the extent that efficacy rate is durable with subsequent analysis, I guess from a health safety standpoint, from an epidemiological standpoint, is there much room for improvement above 90% efficacy rates? And, well, where do you see the potential points for clinical differentiation with 2373? Thanks.
Stan Erck (President and CEO)
Yeah, all good questions. As I think I opened up yesterday's earnings call, I congratulated our colleagues at Pfizer. They had a great trial. They had a great result. Good for them. It's good for them. It's good for the world health, and it's good for the industry. A couple of points to make. They, like we, are all targeting or using the S protein, the spike protein, to prime the immune system. And if that hadn't worked at all, there would be certainly a cloud over that strategy. And I think that that removes any doubt that the S protein is a good target. We, of course, make the S protein. We make it at high levels.
And so we take a look at what does their success imply about 2373. Let me just walk through the three or four differentiating factors between our vaccines. We're both using S. We have generated immune responses, both antibody responses, neutralizing antibody responses, and T cell responses. And they have generated antibody responses in their human trials. It turns out our levels of neutralizing antibodies are higher than theirs. So when they have been able to demonstrate efficacy with their antibody levels, we have high expectations for our results because of higher, and we also have T cells.
Nobody quite knows what the impact of having T cells are, but it can't hurt. And so that's good. The second thing we have is a very stable product. We know our vaccine based upon our current vaccine, but even probably more telling is from our previous vaccines, such as Ebola in the past, that we have a very stable product at refrigerated temperatures and even at room temperatures. And so it makes our vaccine a bit easier to distribute globally. We also have. It's a very scalable product, as I just mentioned. We have a manufacturing process that scales, and we are scaling globally. I think it bodes well for our vaccine, and we look forward to the results we're going to get from it.
Eric Joseph (Executive Director)
Got it. And I guess just in thinking through timeline for the North American phase III study, how should we be thinking about accrual or time to full accrual there? Should we be expecting something along the lines of the pace of enrollment for the mRNA vaccine programs? Or maybe you can kind of relate it to your U.K. experience. And do you see any tailwinds, actually, quite frankly, from sort of the positive vaccine data with Pfizer's vaccine making its way through the headlines?
Stan Erck (President and CEO)
I'm sorry. I didn't catch the last part of the second half of your question.
Eric Joseph (Executive Director)
Do you see any tailwinds for accrual in your phase III coming from the positivity of the Pfizer vaccine?
Stan Erck (President and CEO)
No, I think people will be terribly excited to enroll in trials where you have a spike protein vaccine. I do. I think we have had no trouble, let's start with the U.K. The U.K., we started about five weeks ago and maybe six now. And we have now vaccinated over 9,000 people. And we expect to have that fully enrolled at a level of 15,000 people this month. So in November, we'll be done enrolling with our phase III trial. And to be clear, we expect that the outcome of that trial, the results from that trial, can be used for global licensure.
So we think it's a very important trial. And in the U.S., as I mentioned in the beginning of this presentation, that we continue to expect the U.S. trial, phase III trial, to start in November. And we don't expect accrual problems given, I think, as you point out, given the good news on vaccine efficacy. And so I think there'll be a lot of people lining up to get a vaccine and a clinical trial.
Operator (participant)
Thank you. Our next question comes from Mayank Mamtani with B. Riley. Please go ahead.
Mayank Mamtani (Senior Managing Director and Group Head of Healthcare)
Good afternoon, team. Thanks for taking our questions. And congrats on all the progress. And too bad about the glitch yesterday. And again, a great week for biotech innovation. So maybe just building on the correlation of immunogenicity with vaccine efficacy, would you be able to say what minor or major changes you're able to put in place for the phase III U.S. study? And I'm thinking about the event rate, which is changing here in the U.S., and also your statistical design in the U.S. study, maybe what you started with a month ago and maybe where we are today, given all the information that we know today.
Greg Glenn (President of Research and Development)
Hi, Mayank. It's Greg here. I think I sort of understood where you're going, and I mean, I think that right now, the company is feeling very good about where we are with the U.K. study. Recruitment's going well. It's a very intense disease transmission study, and we've got interim analysis built, and you can view the protocol. So the chance of success on the interim analysis, based on what we can see, should be high because, as you know, our immune responses, especially our neutralizing antibodies, are really quite good.
So you would expect our vaccine to perform at least as well, and one other feature about the data we've generated in the non-human primate study, which is relevant here, we seem to be able to block infection in the nose. And so that's actually, and so remember, we immunize the animals IM, two doses, challenge them in the lungs and nose of the virus, and then see if we can recover virus in the nose. And there we were seeing the induction of sterile immunity, which is really very good. And it's possible that could manifest itself as blocking transmission in the trial.
So I think that that may be something now that we might look for based on the very high efficacy we're seeing with the spike protein-based vaccine.
Mayank Mamtani (Senior Managing Director and Group Head of Healthcare)
Great. And maybe a couple of follow-ups to that. So just clarification, have you said how many subjects in the U.K. study have received a second dose? And then the other question is, as you think about transmission and think about sterilizing immunity, are you thinking about exploring concepts like ring study where you can look at family members of subjects taking the vaccine and try to better understand transmission? Is that something you can build in your phase III protocol?
Greg Glenn (President of Research and Development)
Actually, that's interesting you brought that up. That was discussed pretty early on. But these clinical trials are really complicated. So I think and very intense in their surveillance. So what you are going to see is we will be able to take a serum sample before immunization and then about six months into the trial. And as you know, if someone has even an asymptomatic infection, they typically will make an immune response. So we're not going to catch everyone through our swabbing and surveillance.
We will definitely have some people who we don't catch with the swabbing procedures. But what we should see is that everyone is captured by the serology. So that'll give us a chance to make an assessment as to whether or not we're blocking infections. And I think that'll be important. And there are many countries, for example, I can think of a few, like New Zealand, for example, where they haven't had a lot of disease. They'd be really eager to have a vaccine that might have a chance of blocking infection. So that'll be an interesting feature of our vaccine, I hope.
Mayank Mamtani (Senior Managing Director and Group Head of Healthcare)
Great. And update on the U.K. study, second dose subjects? What proportion?
Greg Glenn (President of Research and Development)
Yeah. Yeah, I don't know that we have a lot. I mean, we started in October. I'm not sure we're really giving too much guidance on that, and I think we're on track to finish fully recruiting everybody by the end of November. So then 28 days after that, everyone will have had a second dose. But you can imagine that there are, as you say, a lot of people now who have entered in the period in which they've received two doses. They're a week past that date, and so surveillance has begun for the collection of endpoints.
So we're deep into that, and one way to know kind of when that's complete is I expect us to finish the recruitment by, that would be the first dose, obviously, the end of November. And then 28 days later, we should have everybody dosed and in surveillance.
Mayank Mamtani (Senior Managing Director and Group Head of Healthcare)
Great. Just two more for me. So on the cohort of patients, subjects you have for 2373 and the marketed flu vaccine, just kind of what is the objective of studying that? Understand it's a smaller cohort. So what are we trying to learn from that that informs your path forward for 2373?
Greg Glenn (President of Research and Development)
Yeah. Yeah. Thank you. That's a good question. So that is designed to make sure that there's going to be a scenario where people are still getting their flu vaccine. And we want to make sure our vaccine does not interfere with the immune response to the flu vaccine and vice versa. It's possible that there could be some interplay interaction. We don't think it'll be insignificant. And so in those subjects, we will also measure their HAI responses as well as the anti-spike responses. So 400 for our immunogenicity study should give us a really good sense of whether or not there's some interference there.
So that's going to be really helpful because we're immunizing people who should also be getting their flu vaccine. It'll be a question we can answer with data.
Mayank Mamtani (Senior Managing Director and Group Head of Healthcare)
Very helpful, Greg. On the financial modeling side, maybe for John, there was this one-time non-cash item of $122 million. John, how should we think about these items as we go forward, and if you can also layer on how relative to expectations is your recording of non-dilutive funding from a reimbursement standpoint, tracking, and what should we think of fourth quarter and first quarter? Because as you can imagine, the numbers are a little all over the place with consensus.
John Trizzino (EVP, Chief Commercial Officer, and Chief Business Officer)
Yeah. Mayank, I'm actually really glad you asked that question because it's something that I was trying to highlight in yesterday's script relative to our cash burn and expenses as we're incurring. So as you can imagine, there's the financial reporting requirements or accrual-based accounting. And included in that is $122 million related to embedded lease accounting, which is non-cash during this period of time. And as I mentioned in the script yesterday, if you really take a look at total operating expenses, not including that charge for the period, you really see a nice alignment between operating expenses and grant or funded revenue, right?
Keep in mind that a significant amount of the funding that we've received has almost exclusively covered our operating expenses during this period. So we're being funded to support all of the development work that we have. So we are recording our revenue as it's incurred and recognizing that revenue. And the same with the expenses. So those expenses and revenue earned are lining up really nicely. We should expect to see that continue through the next quarter of those matching of funded revenues against the expenses. As you get into next year, you're going to see a little bit of a shift in that.
But we don't give too much guidance on revenue or operating expenses at this point, fully recognizing as we become a commercial organization, that's likely going to have to change. But as it stands right now, I think what you're seeing is funding and significant support of all of the development work that we're doing.
Mayank Mamtani (Senior Managing Director and Group Head of Healthcare)
Great. And my final question, again, staying with you, John, there was some confusion around a number of filings that were put out, including some shelf filings. So can you just, for the audience, explain what those filings were, the purpose of that, and if that has anything to do with raising capital?
John Trizzino (EVP, Chief Commercial Officer, and Chief Business Officer)
Yeah. So as we've explained in earnings calls before, we do a lot of the housekeeping at the end of the quarter. So the 10-Q's getting filed, we felt it appropriate to add to our ATM filing to have that out there at the ready when we need to raise cash. We typically don't give guidance on when we're raising. But I think that that ATM filing is consistent with what we've done in previous quarters and is prudent for us to do that as a publicly traded company.
Mayank Mamtani (Senior Managing Director and Group Head of Healthcare)
Excellent. Thanks for taking my question and look forward to future updates.
John Trizzino (EVP, Chief Commercial Officer, and Chief Business Officer)
Thanks, Mayank.
Operator (participant)
Thank you. Our next question will come from Charles Duncan with Cantor Fitzgerald. Please go ahead.
Charles Duncan (Managing Director and Senior Research Analyst)
Hi, Stan and team. Thanks for taking my questions after that new standard. I'll try to be relatively brief. I did want to have a follow-up question on the efficacy bar. I guess I'm wondering, given that you have seen relatively good potent stimulation of antibodies, at least in early studies relative to convalescent sera, I'm wondering if there are any patient cohorts in which you're particularly intrigued with relative, I guess, efficacy and/or tolerability. Could you see perhaps efficacy that is relatively better in terms of immunocompromised patients, say, with HIV or maybe having immunosenescence and other, I guess, patient cohorts at risk?
Greg Glenn (President of Research and Development)
Yeah. Thanks, Charles. Good question. We haven't seen much. We've just seen very, very little top-line information from the spike protein from Pfizer. However, those are really important populations. And we do have recent experience with those populations with our flu vaccine. So that is the principal problem that you're giving a vaccine to the immunosenescent or older population. And they're really developing very relatively poor immunity. So by adjuvanting a nanoparticle, we induce really good functional immunity as well as very good functional CD4 effector memory cells. And those are things that are likely to drive improved protection.
So I think that's been a theme of our vaccine, our flu program, driven by kind of a theme of our platform program, which is an adjuvanted nanoparticle vaccine. So I would hope, I would expect, and we shall see, I would expect our vaccine to perform quite well in that population. And as you know, in South Africa, we have a cohort of HIV-positive stable patients. And in all the trials, we're targeting about 25% of the population to be older adults or comorbidity. So we'll be collecting that data. But based on our very positive experience with our flu vaccine, I would think that that could be a key feature of an adjuvanted nanoparticle vaccine.
Charles Duncan (Managing Director and Senior Research Analyst)
And Greg, if I may just follow up, is there a trade-off between say, reactogenicity and efficacy? I guess when you consider benign reactogenicity or good tolerability, is that at the cost of actual, call it potency, especially in an immune senescent patient? Would you imagine that older patients may show less reactogenicity because there's less efficacy or perhaps because they are not all that concerned about, call it the challenges of being vaccinated?
Greg Glenn (President of Research and Development)
Yeah. So let me start at the beginning with the first part of that question. One of the great features about our vaccine that we found in our phase I and II trials is we do not have a dose-limiting toxicity. But at the same time, we don't seem to need more vaccine to get a higher response. You can see that in our New England Journal paper where the difference between the 5-microgram dose and the 25-microgram dose is in terms of immune response, you can't differentiate. And then I just point to the fact that when you look at the convalescent sera, which should be sort of defining the peak response, at 5 micrograms, we're at the peak response.
And so we do not have a dose-limiting toxicity to our vaccine regimen in terms of antigen dose. The mRNAs did face that. This is super dated today. But in the development, you could see that they had to back off on the dose. And so they did not hit the peak of the dose response curve with the immunization. And so I think that's a positive feature of our vaccine is the safety profile is being seen even with the maximum antigen dose. So it seems to me that we are giving that population, in the case of what's in the New England Journal, healthy adults, kind of the maximum possible immune response they can get to spike protein.
And that's really a positive feature of our vaccine. So there's always some drop-off when you go to older adults in the immunity. And I would expect the same to be true here. But again, based on our experience with the NanoFlu and adjuvanted NanoFlu, we should have a really good response to our vaccine. So the question you asked about reactogenicity, it's sort of debated among clinicians as to whether that's a feature of immune senescence or just older people are more tolerant. I think it's somewhere both. Older people tend to complain less. But it's very well known with vaccination in the older adult population. They tend to complain a lot less of local and systemic adverse events.
Charles Duncan (Managing Director and Senior Research Analyst)
That's helpful. And last couple of questions, one on formulation. I know there's a consideration about distribution. And Stan actually referred to it in terms of comparison to other vaccine technologies. I guess I'm wondering, as you think through the distribution of your COVID candidate, are there challenges given that you have really the antigen component, you have the adjuvant component? Does that present a challenge in terms of distribution and even preparing for administering the vaccine? And then I just have one quick follow-up for John.
Stan Erck (President and CEO)
I'm going to let John answer that because he's had a lot of experience distributing vaccines.
John Trizzino (EVP, Chief Commercial Officer, and Chief Business Officer)
One first significant difference is the formulation, right, is that we're not sure what the other protein-based adjuvanted vaccine is doing. But we're not going to have a bedside mix upon administration, which it may be what you're alluding to, Charles. So I think that's important. One is I don't think we can underestimate the significance of the logistics of a frozen product.
I think there was some conversation that took place today with Pfizer about, while we're happy for them and they've got an approved vaccine that's 90% plus effective, the logistics challenges of shipping a frozen product, storing on-site, when they can use it is going to provide some significant challenge to them and certainly benefit to our product in the way that it's shipped and how it's used at the physician office or at the pharmacy or at a vaccination clinic. So two big issues there that are full in our favor.
Charles Duncan (Managing Director and Senior Research Analyst)
That's very helpful, John. Last quick question is regulatory. You recently announced Fast Track designation. And I get that in therapeutics land that that's a positive. But it would seem to me to be of limited utility here because I can't imagine that the agency is not tracking what you're doing. So I'm wondering what is the practical implication of having Fast Track designation and what kind of information was provided to the agency or how was that decision made to make that designation?
Stan Erck (President and CEO)
I think you're kind of right there. I mean, there isn't a tremendous advantage, but there's things like rolling submission, etc. I think it's a recognition that our program is important to them, and they don't give the Fast Track out lightly. But they're paying a lot of attention to us. I think it's been very positive. That recognition for me is a good validation that they think our program's important, and so I will say they are being exceptionally helpful in terms of responsiveness. And the Fast Track just sort of guarantees that. There's things like rolling submission, etc. So we take it as a nice validation, and so we're gratified that they like our program enough to give us that kind of attention.
Charles Duncan (Managing Director and Senior Research Analyst)
Yeah. And to our knowledge, not everyone has it. Last question regarding the conduct of the U.K. trial. When you look at that on a blinded basis, how do you feel about the case rate? Is it consistent with what you had anticipated, just general case rate? But then also severe disease case rate, are you picking up that? And is it consistent with your assumptions going in? Thank you.
Stan Erck (President and CEO)
Yeah. So I can't really talk about our specific case rate in the trial. I can tell you that we know a lot in the U.K. The information around surveillance is very, very robust. We are in a good place. We are seeing lots of disease. If you get a swab in the U.K., you're very likely to meet what we would consider our primary endpoint criteria. So it's a fairly high bar once they get a swab. And then they're seeing a lot of hospitalizations that are packed. We are right in the middle of the areas that are extremely busy with a high case rate. So I'm feeling very good about our ability to collect cases. And I think you can see Pfizer, they profited from this recent upsurge.
And they were telling the story of they went from 60-90, more or less, before they could get unblinding. So if you're in the right spot at the right time, you can very quickly accumulate cases. I think we are in the right spot at the right time in the U.K.
Charles Duncan (Managing Director and Senior Research Analyst)
Okay. Very good. Thanks for hosting the call.
Stan Erck (President and CEO)
Thank you.
Charles Duncan (Managing Director and Senior Research Analyst)
And take my question.
Stan Erck (President and CEO)
Thanks.
Operator (participant)
Thank you. Our next question will come from Vernon Bernardino with H.C. Wainwright. Please go ahead.
Vernon Bernardino (Managing Director)
Hi guys. Thanks for taking my question and congrats on the progress. Charles asked a lot of the questions that I had as far as the distribution and the challenges there. But one thing I wanted to confirm is as far as the expected way that a clinic, for example, would get the vaccine once it's at the stage where it would be in distribution. So you're not expecting a bedside mixing. But are there going to be two vials where one has the antigen and one has adjuvant? Or will they be mixed together? And will it already be in solution? I just wanted to know what is the form the vial, for example, is going to be seen once it is at the point of being used as a vaccine?
John Trizzino (EVP, Chief Commercial Officer, and Chief Business Officer)
Hey, Vernon, it's John. It's again pre-formulated and a 10-dose vial, so there'll be fairly easy administration at the site. And yeah, no two vial, no pre-mixing at the clinic, pre-formulated, ready to go.
Vernon Bernardino (Managing Director)
Okay. Perfect. That is going to be a tremendous advantage. And then one question. We didn't get too much update as far as the NanoFlu program. I know you put a team together and you're ready for its commercial stage. But what is the status of the NanoFlu program?
Stan Erck (President and CEO)
Yeah. So this is Stan. So we just put the—
Vernon Bernardino (Managing Director)
Hey, Stan.
Stan Erck (President and CEO)
How are you? Just put the team together. And we're trying to figure out the best way forward given the fact that we're in the middle of a pandemic. And so there's issues that you have to have manufacturing capacity. But now there's potentially new strategies for what running efficacy trials or running combination products. And we're going to take a little bit of time and figure that out over the coming months.
But the goal is to get it back into manufacturing, scale up, do the CMC things that we needed to do yet to get a BLA. And we'll report on that in the coming months. But there's going to be a lot of activity in 2021 on flu. It kills me that we had the best clinical data I've had in my 40-year career in a phase III pivotal trial for flu, and it's been languishing because of COVID. It's one of the casualties, but we're not going to let it be a casualty for long. We're going to get back into flu.
Vernon Bernardino (Managing Director)
Yeah. I know. And Greg, I've been waiting almost that long too. And can you remind us again how much antigen is actually in the NanoFlu vaccine?
Greg Glenn (President of Research and Development)
Yeah. It's 60 µg per dose per strain. That's it. So it's a high dose.
Vernon Bernardino (Managing Director)
It's only one dose, right?
Greg Glenn (President of Research and Development)
One dose and it's adjuvanted with Matrix. It's a great vaccine.
Vernon Bernardino (Managing Director)
Yeah. If you were to combine it with a coronavirus vaccine, how would you actually do that?
Greg Glenn (President of Research and Development)
No. It's an interesting question because remember, now we have a vaccine. We have two vaccines that are respiratory vaccines. And they both have Matrix-M in it. So the formulation doesn't change. And it may be as simple as just adding antigen. We may have to play around with what the actual flu, there's a lot of things to think about. One of which is we want to keep 60 micrograms of the flu and 5 microgram COVID. We've also got the possibility of matching it with RSV. And you could have a three-way combination. And that would be a great annual respiratory vaccine. So there's lots of possibilities here.
Vernon Bernardino (Managing Director)
Yeah. ACIP would go nuts. And then in your preclinical studies, have you seen any synergies when you've combined NanoFlu and 2373, for example, as far as the immune response such that you could get away perhaps with either a 25 microgram single dose or, yeah. I mean, that would be probably best.
Stan Erck (President and CEO)
I believe, Greg, that's the experiment to be done. We haven't done that yet.
Greg Glenn (President of Research and Development)
Yeah. I think you're hitting on a good topic though.
We need to do a little bit of dose exploration here to see where we might go with this, and maybe the dose schedule too, so those are two things we're going to consider in the combo.
Now we're going to have fun with that this year.
Vernon Bernardino (Managing Director)
Okay. Perfect. Congrats. I'm looking forward to the end of the month and beyond.
Stan Erck (President and CEO)
Thank you, Vernon. Thank you.
Operator (participant)
Thank you. And we do have a follow-up question from Mayank Mamtani with B. Riley. Please go ahead.
Mayank Mamtani (Senior Managing Director and Group Head of Healthcare)
Thanks for taking my follow-up. I had a formulation question, but that's been addressed. But maybe on the question around commercialization, maybe John, related to your new role coming on board, how are you thinking about in context of everything that we are seeing, military-style distribution, logistics? And given your timelines might not be that far behind where Pfizer and even Moderna are assuming the U.K. study is a gating point. How are you thinking about commercialization just internally beyond the government contracting and all the other kind of stuff?
John Trizzino (EVP, Chief Commercial Officer, and Chief Business Officer)
Thanks, Mayank. As you can imagine, there's really two parts to this commercialization story. One is the pandemic period, which is pretty straightforward. OWS has outlined their distribution strategy and how they're going to be controlling the process, taking it through McKesson Logistics in order to move it out to predetermined sites and the prioritization. ACIP, the Advisory Committee on Immunization Practices, is already in the mix and probably will be weighing in on prioritization, whether that be to older adults, first responders, healthcare providers, etc. The good news for the innovator and the manufacturer, Novavax, is that as soon as ready, we're going to turn that product over to them, and they're going to make sure it gets to where it needs to be.
We, during this pandemic period, don't need to worry about the logistics and the prioritization, which takes a significant burden off of our shoulders and allows us to focus on clinical trial activity and pathway to licensure. Post-pandemic is a completely different story, and it's difficult to determine exactly when that switch flips to normal commercial distribution channels. It could be this time next year. It could be later in 2022, but there again, there's well-established mechanisms commercially.
I think flu is a great example of that and the annual flu vaccinations. There's known distributors, known vaccinators policy, payer strategy. The purpose of my new responsibilities is to make sure that we're commercially ready, not only in the U.S. but globally, and understand vaccine distribution and logistics and selling and payer and policy strategy, so we're ready to go.
Mayank Mamtani (Senior Managing Director and Group Head of Healthcare)
And would part of that, John, be trying to build Novavax into a Pfizer? Or should we think about you collaborating with other peers that might be more active in certain geographies from a collaboration and a multi-product respiratory franchise standpoint? How are you thinking about that longer term?
John Trizzino (EVP, Chief Commercial Officer, and Chief Business Officer)
I don't know. Maybe Pfizer is aspiring to be like Novavax, Mayank. Maybe we, all joking aside, I think that we believe that from a commercialization standpoint, we know what needs to be done to bring that product to market. Of course, we'll always be open to whatever partnering opportunities are in our best interest, whether that's ex-U.S. or other territories so we always leave that door open but until that opportunity presents itself, we're ready to go, ready to commercialize the product.
I'll bring up one of the points since you mentioned Pfizer and this was asked earlier that OWS Logistics Network is being bypassed by Pfizer because of the frozen stability issues and so they're taking on the responsibility of moving their product around on their own for that specific purpose.
Mayank Mamtani (Senior Managing Director and Group Head of Healthcare)
Yes. That's a good point to highlight. Thanks so much for taking my follow-up.
John Trizzino (EVP, Chief Commercial Officer, and Chief Business Officer)
You're welcome.
Operator (participant)
Ladies and gentlemen, thank you for participating in today's question and answer session. I would now like to turn the call back over to management for any further remarks.
Stan Erck (President and CEO)
Yeah. Thanks, everybody. Sorry it took us two days to get through this, but we're happy to answer the questions, and we'll be in touch as events unfold. Thank you.
Operator (participant)
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.