Novavax, Inc. (NVAX): PESTLE Analysis [Nov-2025 Updated]

You're watching Novavax, Inc. navigate the toughest pivot in its history: moving from massive, guaranteed government vaccine contracts to the messy, competitive commercial market. The biggest pressure point in late 2025 isn't just Pfizer or Moderna, but the complex regulatory path for their defintely critical combined flu/COVID-19 shot, which is the key to sustainable revenue. This PESTLE breakdown shows exactly how Political shifts, Economic competition, and Sociological hesitancy are forcing the company to prove its protein-based platform can deliver consistent, profitable growth.

Novavax, Inc. (NVAX) - PESTLE Analysis: Political factors

Government procurement shifts from large contracts to commercial market purchases

The biggest political shift for Novavax, Inc. in 2025 is the end of the pandemic-era government Advance Purchase Agreements (APAs) and the move to a traditional commercial market. This transition fundamentally changes Novavax's revenue model from large, guaranteed government contracts to commercial sales, which are inherently more volatile and competitive. To manage this shift, Novavax executed a co-exclusive licensing agreement with Sanofi, transferring lead commercial responsibility for its COVID-19 vaccine, Nuvaxovid, for the 2025-2026 vaccination season in key markets like the U.S. and Europe.

This pivot is clearly visible in the 2025 financial results. For instance, the company's Q1 2025 product sales revenue included a significant one-time recognition of $603 million related to the termination of APAs with countries like Canada and New Zealand. The company's overall Full Year 2025 Adjusted Total Revenue is now projected to be between $1.040 billion and $1.060 billion, but this is driven more by partnership milestones and royalties than by direct product sales. It's a strategic move: they are trading high-volume, low-margin government sales for high-margin licensing revenue.

US regulatory bodies (FDA) set complex requirements for strain updates and approvals

The regulatory environment, particularly with the U.S. Food and Drug Administration (FDA), remains a critical political factor. While Novavax achieved a major milestone with the FDA approval of its Biologics License Application (BLA) for Nuvaxovid in May 2025, this approval came with a complex regulatory requirement: a postmarketing commitment (PMC) for a new clinical trial. This ongoing regulatory oversight adds costs and execution risk, even though the BLA approval itself triggered a crucial $175 million milestone payment from Sanofi.

Also, the FDA's process for updating vaccine strains is a continuous challenge. The FDA recommended the 2025-2026 vaccines target the LP.8.1 strain. Since Novavax's protein-based platform has a longer manufacturing cycle compared to mRNA vaccines, meeting these rapid, politically-driven strain change timelines can be difficult. The complexity of the PMC is a real cost, but Novavax is mitigating the financial impact, with Sanofi reimbursing approximately $55 million (midpoint) of the total study costs.

Global patent protection and intellectual property enforcement remain critical for Matrix-M

The company's core value is now centered on its technology platform, particularly the Matrix-M adjuvant (a vaccine component that boosts the immune response). The political and legal framework for global patent protection and intellectual property (IP) enforcement is therefore paramount. Novavax has stated its core vaccine-related intellectual property, including patents, extends beyond 2025.

The Sanofi partnership is the clearest example of the value of this IP, as it grants Sanofi a non-exclusive license to use Matrix-M in other vaccine products. This IP licensing model is a key driver for future non-dilutive funding, insulating Novavax from the political volatility of direct product sales. The potential value of this IP is substantial:

Matrix-M Adjuvant IP Value Component	Financial Terms (Sanofi CLA)
Milestone Payments (First 4 Products)	Up to $200 million per product
Milestone Payments (Each Subsequent Product)	Up to $210 million per product
Royalties on Sales	Ongoing royalties on all Sanofi products utilizing Matrix-M

Geopolitical tensions affect global supply chain stability for raw materials

Geopolitical risks are a constant, non-financial threat that directly impacts the supply chain. Global instability, including US-China trade tensions and the ongoing effects of conflicts like the Russia-Ukraine war, creates a volatile environment for sourcing raw materials. Novavax's own risk filings explicitly cite the difficulty in obtaining scarce raw materials and the risk associated with its reliance on key partners for manufacturing.

Specifically, the company has an exclusive dependence on the Serum Institute of India Pvt. Ltd. for co-formulation and filling of its vaccines. Any political or trade disruption in that region or to global shipping lanes could immediately affect Novavax's ability to deliver product. To address supply chain and cost risks, Novavax is actively rationalizing its manufacturing footprint, a move that is expected to result in future cash savings of approximately $230 million. That's a huge operational cost reduction.

Near-term actions to mitigate this political risk:

• Diversify raw material sourcing outside of politically volatile regions.
• Monitor trade control changes in 'connector countries' like South Korea and Mexico.
• Complete the planned consolidation of manufacturing sites for the projected $230 million in savings.

Novavax, Inc. (NVAX) - PESTLE Analysis: Economic factors

Transition to private-market pricing impacts revenue per dose

The economic landscape for Novavax, Inc. has fundamentally shifted from a government-contract model to a partnership-driven, private-market model, which drastically changes the revenue profile. The predictable, high-volume Advanced Purchase Agreements (APAs) are gone, replaced by a reliance on milestone payments and royalties from partners like Sanofi. This transition makes revenue lumpy and less certain.

You can see this in the full-year 2025 guidance: while the company projects total adjusted revenue between $1.040 billion and $1.060 billion, the composition is key. Product sales of the COVID-19 vaccine, Nuvaxovid, are expected to be only around $610 million for the full year, a figure that is heavily front-loaded and volatile. For example, Q3 2025 product sales were a mere $13.4 million, a sharp drop from $41.5 million in the same quarter of 2024.

The new revenue stream is driven by licensing, royalties, and other revenue, which is projected to be between $395 million and $405 million in 2025. This includes a significant one-time $175 million milestone payment from Sanofi following the U.S. full approval (BLA) of Nuvaxovid. That's a huge chunk of cash, but it's not a sustainable, recurring revenue stream. The whole business now hinges on partner execution and the timing of these milestones.

Competition from large pharmaceutical companies (Pfizer, Moderna) drives down market share

The switch to a commercial, private market has thrown Novavax into direct, aggressive competition with pharmaceutical giants like Pfizer and Moderna. These companies have extensive resources, established distribution networks, and the ability to bundle their vaccines (like flu and COVID-19 shots) for major retail pharmacy contracts.

The market share fight is brutal. While Novavax's protein-based technology is a distinct advantage for those who prefer a non-mRNA option, the commercial muscle of its rivals is hard to overcome. The competition is focused on:

• Securing large-scale contracts with pharmacy chains.
• Aggressive pricing and product bundling.
• Leveraging well-oiled commercial and marketing machines.

This environment forces Novavax to rely on its partners, like Sanofi, to handle the heavy lifting of commercialization for the 2025-2026 vaccination season, a clear sign the company cannot compete effectively on its own in the US market.

High R&D costs for next-generation vaccines strain operating cash flow

Despite aggressive cost-cutting, the necessary investment in next-generation vaccines-like the COVID-19-Influenza-Combination (CIC) and stand-alone influenza candidates-continues to strain the company's operating cash flow. The strategic pivot to an R&D-focused model means high fixed costs remain a challenge.

Here's the quick math on the expense side for 2025:

• Combined R&D and SG&A expenses are guided to be between $505 million and $535 million.
• The non-GAAP figure, net of partner reimbursement (mostly from Sanofi), is still approximately $450 million at the midpoint.

This spending is a major reason why the net loss widened to $202.3 million in Q3 2025, compared to a loss of $121.3 million in Q3 2024. The cash burn is real; cash used in operations in Q1 2025 was $185.5 million, a significant increase from $83.6 million in Q1 2024. To be fair, management is taking clear action, like consolidating the Maryland campus to generate $60 million in cash and save $230 million in operating costs over 11 years.

Currency fluctuations impact international sales and manufacturing costs

As a global biopharma company with international sales and a manufacturing network that relies on partners like the Serum Institute of India and Takeda, Novavax is exposed to currency fluctuations. The company's international operations involve transactions in various foreign currencies, creating both translational and transactional risk.

While not a primary driver of their financial results, currency effects still chip away at the bottom line. For the period ending in November 2025, the reported 'Effect of Exchange Rate Changes' on the company's financials was a negative $-3 million. This small number defintely hides the larger risk, as a significant, sudden strengthening of the US Dollar against currencies like the Euro or the Indian Rupee could quickly erode the value of international sales and royalty payments, or increase the cost of non-USD denominated manufacturing inputs.

Novavax, Inc. (NVAX) Key Financial Metrics - Full Year 2025 Outlook

Metric	2025 Guidance / Actual Amount	Impact & Context
Adjusted Total Revenue	$1.040 billion - $1.060 billion	Revenue shift from direct sales to lumpy partnership milestones.
Combined R&D and SG&A Expenses (Midpoint)	$520 million	High fixed cost base straining operating cash flow.
Q3 2025 Net Loss	$202.3 million	Widened loss due to high expenses and a $97 million asset impairment charge.
Q1 2025 Cash Used in Operations	$185.5 million	Indicates significant cash burn rate that must be addressed.
Effect of Exchange Rate Changes (as of Nov 2025)	$-3 million	Specific, though minor, impact of currency volatility on international business.

Novavax, Inc. (NVAX) - PESTLE Analysis: Social factors

Persistent vaccine hesitancy and lower public perceived risk of COVID-19 reduce demand

The public's decreasing perception of COVID-19 as an immediate, severe threat directly impacts the demand for Novavax's Nuvaxovid (COVID-19 Vaccine, Adjuvanted). This lower perceived risk, coupled with persistent vaccine hesitancy (a reluctance or refusal to vaccinate despite the availability of vaccines), has led to a significant contraction in the overall U.S. COVID-19 vaccine market.

For the current immunization season, prescriptions for all COVID-19 shots declined by approximately 20% following new U.S. recommendations, which created confusion and barriers for Americans seeking the shots. This environment means that Novavax, despite offering the only protein-based option, faces a shrinking overall pool of potential customers. The CEO of a major shareholder cited the company's low market penetration, noting that Novavax held only a 1% vaccine share this season, a clear indicator of the challenge in converting hesitancy into uptake.

Public health campaigns influence uptake rates for seasonal flu and COVID-19 shots

The shift in public health messaging from universal vaccination to a more targeted approach directly influences Novavax's commercial prospects. In August 2025, the U.S. Food and Drug Administration (FDA) approved the 2025-2026 formula of Nuvaxovid only for individuals 65 years of age and older, or those 12 through 64 years of age with at least one underlying high-risk condition. This policy change, which limits the eligible population, is a major headwind to mass-market uptake.

The Centers for Disease Control and Prevention (CDC) recommendation for the 2025-2026 season requires a discussion with a healthcare provider for most people, moving away from a broad, universal recommendation. This friction in the process, alongside the general decline in public health-driven mass campaigns, makes it harder to drive high-volume sales for both COVID-19 and future combination shots, like the one Novavax is co-developing with Sanofi that includes seasonal flu. The company's strategy now relies heavily on Sanofi's commercialization expertise to navigate these complex, risk-stratified public health landscapes.

Focus on equitable global vaccine access drives pricing and distribution strategies

Novavax's commitment to equitable global vaccine access (EGVA) is now primarily executed through strategic partnerships, fundamentally altering its revenue mix. The collaboration with the Serum Institute of India, for instance, is key to securing supply channels for lower-income countries. This social mandate translates into a business model shift from direct product sales to licensing and royalties.

The partnership with Sanofi, which began in 2025, is a prime example of this pivot. Sanofi now leads the commercialization of Nuvaxovid in key markets, and Novavax will receive ongoing tiered royalties from these sales. This structure allows Novavax to meet the social demand for access without shouldering the full commercial and distribution costs globally. For 2025, the company's financial guidance reflects this change, with a significant portion of its expected revenue coming from partnerships, not product sales:

2025 Full Year Revenue Component	Expected Value (Range)	Source of Revenue
Adjusted Total Revenue	$1.04 billion - $1.06 billion	Excludes Sanofi sales/royalties
Adjusted Licensing, Royalties, and Other Revenue	$395 million - $405 million	Milestone payments, R&D reimbursement
Q2 2025 Licensing, Royalties, & Other Revenue	$229 million	Includes a $175 million U.S. BLA approval milestone from Sanofi

The company's focus is on maximizing the value of its Matrix-M adjuvant technology through these deals, rather than high-volume, low-margin sales in every market.

Shifting consumer preference toward non-mRNA vaccine technology remains a niche opportunity

Novavax's core social opportunity lies in catering to a specific, but limited, segment of the vaccine-hesitant population: those who prefer a traditional, protein-based vaccine technology over the newer messenger RNA (mRNA) platforms. Nuvaxovid is the only protein-based, non-mRNA COVID-19 vaccine available in the U.S. for the 2025-2026 season. This distinction is a critical driver for individuals who have concerns about the novel technology or want an alternative due to reactogenicity (side effects).

Clinical data from the SHIELD-Utah study showed that Nuvaxovid recipients experienced approximately 39% fewer symptoms on average when compared to a marketed mRNA vaccine, a key selling point for the tolerability-sensitive consumer. However, this preference group is a niche, as evidenced by the low 1% market share for the season. The company is working to convert this preference into a sustainable market position by highlighting its established technology and favorable tolerability profile. To be fair, a 1% share of a multi-billion dollar market is defintely still a valuable asset.

• Capitalize on the non-mRNA preference for the 2025-2026 season.
• Emphasize the 39% fewer symptoms data for better patient acceptability.
• Leverage Sanofi's commercial scale to reach this niche group globally.

Novavax, Inc. (NVAX) - PESTLE Analysis: Technological factors

Matrix-M adjuvant technology offers a competitive edge in immune response

The core technological advantage for Novavax is its proprietary saponin-based Matrix-M adjuvant, which is a critical component of its protein-based vaccine platform. This adjuvant is clinically proven to induce a potent, durable, and broad immune response, significantly enhancing the effect of the vaccine's antigen (the part that stimulates the immune system). Critically, Matrix-M is 'antigen-sparing,' meaning it allows for a lower dose of the active vaccine component while still achieving high efficacy, which is a major advantage for large-scale production and pandemic response.

This technology is now a standalone asset driving the company's 2025 partnership strategy. The collaboration with Sanofi, announced in 2024 and active in 2025, leverages Matrix-M for use in Sanofi's vaccine pipeline, including early-stage development for pandemic influenza candidates. This partnership validates the platform's value beyond Novavax's own products.

Here is the quick math on the financial potential of Matrix-M through the Sanofi partnership, which is a key revenue stream for the 2025 fiscal year and beyond:

Matrix-M Adjuvant Partnership Revenue Stream	Potential Value (per product)	Notes
Milestone Payments (First 4 Products)	Up to $200 million	Tied to development and launch milestones
Milestone Payments (Each Subsequent Product)	Up to $210 million	For products developed after the first four
Ongoing Royalties	Mid-single digits	For up to 20 years on sales of Sanofi products utilizing Matrix-M

Development of a combined influenza and COVID-19 vaccine is a key pipeline focus

The development of a COVID-19-Influenza Combination (CIC) vaccine is a central near-term opportunity, providing a clear path to a differentiated commercial product. Novavax reported positive initial cohort data from its Phase 3 trial in June 2025, which showed the CIC vaccine candidate induced robust immune responses comparable to licensed comparators, specifically Nuvaxovid and Fluzone High-Dose.

The data revealed a strong technical profile for the combination product, especially in cell-mediated immunity. Honestly, the T-cell response data in both the CIC and stand-alone influenza candidates were numerically higher than the Fluzone HD comparator arm, which is a strong biological signal. The company is actively pursuing a partner to advance this late-stage asset to a future registrational program, with a full commercial launch anticipated for 2026. They are working with the U.S. Food and Drug Administration (FDA) to determine the potential for an accelerated approval pathway, with more clarity expected by Q2 2025.

Manufacturing scale-up and yield consistency for protein-based vaccines are ongoing challenges

While the protein-based technology is scientifically sound, the manufacturing process for recombinant nanoparticle vaccines has historically been a challenge for Novavax, particularly concerning scale-up and yield consistency. The company's reliance on external partners for critical steps, such as its exclusive dependence on Serum Institute of India Pvt. Ltd. for co-formulation and filling, remains a supply chain risk.

To be fair, Novavax is actively addressing this by shifting to a lean, agile operating model in 2025. This includes a significant site consolidation effort in Maryland, which is a direct move to cut fixed costs and simplify operations.

Here's the quick math on cost discipline:

• Full Year 2025 combined Research & Development (R&D) and Selling, General, and Administrative (SG&A) expense guidance is between $475 million and $525 million.
• The Maryland site consolidation is expected to result in future cash savings of $230 million over 11 years related to lease and operating costs.
• The sale of property adjacent to the headquarters is expected to result in a $20 million payment to Novavax in the fourth quarter of 2025.

Investment in new delivery systems and thermal stability to improve distribution

The protein-based nature of Novavax's vaccines provides an inherent technological advantage in distribution logistics over the ultra-cold chain requirements of some mRNA competitors, as its products are generally stable at standard refrigeration temperatures. The Nuvaxovid 2025-2026 Formula, for instance, is available in a pre-filled syringe presentation, which is a key delivery system improvement that simplifies administration and reduces preparation errors for healthcare providers.

The company is also investing in advancing its platform through early-stage research:

• Continued work on new potential Matrix formulations is underway, intended to defintely improve upon and expand the utility of Matrix-M.
• Early-stage pipeline efforts are exploring innovative approaches like intranasal delivery for vaccines against targets like C. difficile, shingles, and RSV, which represents a new delivery system technology.

The company's focus is on R&D innovation and leveraging its technology platform to forge new partnerships, which is reflected in the targeted R&D investment within the $475 million to $525 million combined R&D and SG&A expense guidance for FY 2025.

Novavax, Inc. (NVAX) - PESTLE Analysis: Legal factors

Ongoing litigation and legal disputes related to supply agreements and intellectual property

Novavax has spent the last few years actively resolving significant legal and contractual disputes, a necessary cleanup to stabilize its financial footing for the 2025 fiscal year. The most material resolution was the settlement with Gavi, the Vaccine Alliance, in February 2024, which ended arbitration related to a 2021 advance purchase agreement for the COVID-19 vaccine. This settlement totals up to $400 million, structured with an initial payment of $75 million and deferred annual payments of $80 million through December 31, 2028, though these annual obligations can be offset by vaccine credits.

Also, the company settled a securities class action lawsuit in late 2023/early 2024 for $47 million, resolving claims that management misled investors about manufacturing capabilities and regulatory timelines for the COVID-19 vaccine. That's a clean slate you defintely want. While no major intellectual property (IP) litigation is currently dominating headlines, the core value of Novavax rests on its proprietary technology, including the recombinant nanoparticle and Matrix-M adjuvant patents, which are always subject to potential future challenges in the biotech space.

Strict compliance with Good Manufacturing Practice (GMP) across global facilities

For a pharmaceutical company, GMP (Good Manufacturing Practice) compliance is non-negotiable; it's the legal backbone of product quality. Past manufacturing and production challenges, including contamination incidents at facilities, were a central issue in the securities litigation. Moving into the 2025 fiscal year, the U.S. Food and Drug Administration (FDA) has explicitly conditioned the authorization of the Novavax COVID-19 Vaccine, Adjuvanted (2024-2025 Formula) on all manufacturing facilities adhering to Current Good Manufacturing Practice requirements.

The FDA's review in August 2024 confirmed that all facilities involved in the 2024-2025 Formula authorization, even with the addition of a new aseptic filling line, were deemed adequate to support the vaccine's use. This ongoing regulatory oversight, particularly with key partners like Serum Institute of India Pvt. Ltd. for co-formulation and filling, means any lapse in compliance could immediately halt distribution and trigger severe financial and legal penalties.

Navigating varied international liability laws for vaccine side effects

Managing product liability risk for vaccine side effects is a complex global challenge, as legal frameworks vary wildly from country to country. Novavax has substantial post-marketing safety experience, with a database that includes over 5 million doses administered globally, and no new safety signals were identified for the 2023/2024 or 2024/2025 formulas, which helps mitigate risk.

For low- and middle-income countries, the company's prior involvement with the COVAX Facility offered a crucial layer of protection. This mechanism, the COVAX No-Fault Compensation Program, was the first international vaccine injury compensation program, which helped reduce the manufacturer's tort liability risk in the 92 AMC Eligible Economies. In the U.S. market, the product is subject to the Countermeasures Injury Compensation Program (CICP) for COVID-19 claims, or the National Vaccine Injury Compensation Program (VICP) for other covered vaccines, which are no-fault alternatives to traditional lawsuits.

The key takeaway here is that liability risk is largely managed through government-backed no-fault programs globally, especially for its COVID-19 product.

Regulatory exclusivity periods for new vaccine formulations are vital for market protection

The transition from Emergency Use Authorization (EUA) to full regulatory approval, or Biologics License Application (BLA), is the single most important legal factor for market protection. Novavax achieved U.S. BLA approval for Nuvaxovid in May 2025, a critical milestone that grants a period of market exclusivity.

This BLA approval was a major financial trigger, resulting in a $175 million milestone payment from Sanofi under their collaboration and license agreement. Under this partnership, Sanofi leads commercialization, and Novavax is eligible to receive ongoing tiered royalties from stand-alone COVID-19 vaccine sales for all future vaccination seasons. The FDA did, however, request a new post-marketing commitment (PMC) for a Phase 4 trial in a lower-risk population, which is a regulatory burden that ties up resources but is necessary to maintain the BLA.

Here's the quick math on the Sanofi deal's regulatory value:

Milestone/Revenue Type	Triggering Event	Amount/Value	Date/Period
Upfront Payment (Sanofi Deal)	Agreement Signed (May 2024)	$500 million	2024
U.S. BLA Approval Milestone	Nuvaxovid BLA Approval	$175 million	May 2025
EU Marketing Authorization Milestone	Transfer to Sanofi	$25 million	Expected 2025
U.S. Marketing Authorization Milestone	Transfer to Sanofi	$25 million	Expected 2025
Ongoing Royalties	Sanofi Sales of Nuvaxovid	High teens to low twenties percent	Future vaccination seasons

The BLA and the Sanofi partnership are the legal and commercial mechanisms that convert a temporary pandemic product into a long-term, royalty-generating asset. The total adjusted revenue expected for the full year 2025 is between $1,000 million and $1,050 million, a significant portion of which is tied to these regulatory and partnership milestones.

Novavax, Inc. (NVAX) - PESTLE Analysis: Environmental factors

Managing cold chain requirements for vaccine distribution, though less stringent than mRNA rivals

The most significant environmental advantage for Novavax, Inc. in 2025 is its relatively simple cold chain requirement for the Nuvaxovid™ vaccine. This protein-based vaccine is formulated as a ready-to-use liquid and requires standard refrigeration, which dramatically reduces the energy consumption and logistical complexity associated with distribution.

This is a material advantage in a world increasingly focused on Scope 3 emissions (value chain emissions). Standard refrigeration allows Novavax to use existing pharmaceutical supply chains and cold storage infrastructure, which cuts down on the need for specialized, energy-intensive ultra-low temperature freezers and dry ice shipments. This difference is especially critical for distribution in developing nations and rural areas where ultra-cold infrastructure is defintely scarce.

Here is the quick comparison of the cold chain requirements for the 2025-2026 COVID-19 vaccine formulas:

Vaccine Type (2025-2026 Formula)	Manufacturer	Storage Temperature Requirement	Logistical Energy Implication
Protein-Based (Nuvaxovid™)	Novavax	2°C to 8°C (Standard Refrigeration)	Low energy use, utilizes existing infrastructure.
mRNA (Comirnaty/Spikevax)	Pfizer/BioNTech & Moderna	Frozen (-15°C to -25°C) or Ultra-Cold (-60°C to -80°C)	High energy use, requires specialized freezers and dry ice.

Sustainable practices in manufacturing and waste disposal are under public scrutiny

As a biotechnology company, Novavax faces public and investor scrutiny over its manufacturing processes, particularly concerning hazardous waste (biohazardous waste, chemical solvents) and water usage. The company's overall sustainability performance is viewed positively by some third-party assessments, with one analysis citing a net impact ratio of 76.2%, indicating an overall positive sustainability impact.

However, the transition away from large-scale, in-house manufacturing in 2025-part of the strategic shift to a leaner R&D-focused model-introduces new complexities. While the site consolidation is expected to reduce the company's direct environmental footprint, it shifts the burden of environmental compliance and waste management to contract manufacturing organizations (CMOs) and partners like Sanofi and Serum Institute of India Pvt. Ltd. This requires rigorous oversight of the supply chain's environmental performance, a key component of Scope 3 reporting.

Energy consumption and carbon footprint of global production facilities

The company's energy consumption and carbon footprint are undergoing a significant structural reduction in the 2025 fiscal year, driven by a corporate restructuring plan. Novavax is executing a planned site consolidation in late 2025/early 2026, which is designed to reduce facility operating costs and create a leaner organization.

This strategic move directly impacts the company's Scope 1 (direct emissions) and Scope 2 (purchased energy) carbon footprint by reducing the physical operational footprint. The company is on track to decrease combined Research and Development (R&D) and Selling, General and Administrative (SG&A) expenses by 85% by 2027 compared to 2022 levels, which includes substantial facility and utility savings. This is a clear action mapping a near-term risk (high operating cost) to a long-term environmental opportunity (smaller carbon footprint).

Adherence to global environmental, social, and governance (ESG) reporting standards

Novavax is committed to adhering to global ESG reporting standards, a necessity for maintaining investor confidence and accessing capital. The company publishes a Global Sustainability Report and has an Environmental Sustainability Policy, which outlines its goal to mitigate environmental impact.

Key areas of focus for 2025 are aligning with evolving global frameworks:

• Global Reporting Initiative (GRI): Novavax uses the GRI Standards as a basis for its sustainability reporting.
• Corporate Sustainability Reporting Directive (CSRD): As a global company, Novavax is preparing for the European Union's CSRD, which will require comprehensive reporting on environmental impacts for the 2025 fiscal year, with reports due in 2026.
• Carbon Disclosure Project (CDP): Participation in CDP is critical for transparently communicating the company's climate strategy and performance to investors.

The core challenge here is translating the complexity of a technology-transfer and partnership-heavy business model into clear, auditable ESG data, especially as the bulk of manufacturing-related environmental impact shifts to third-party partners.