Novavax (NVAX) Q3 2026 Earnings Call: Revenue Outlook Raised to $400M

Key Takeaways

• Novavax reported Q3 2026 total revenue of $68 million, compared with $70 million a year earlier. Net loss narrowed by $171 million to $31 million from $202 million.
• The company raised its full-year 2026 adjusted total revenue outlook by $145 million to $385 million-$415 million, with a midpoint of $400 million.
• Sanofi’s European Phase III influenza-COVID-19 combination vaccine trial triggered a $125 million milestone. Novavax expects another $75 million after manufacturing technology transfer, targeted for mid-2027.
• Novavax ended the quarter with $676 million in cash and accounts receivable. Management expects available resources and near-term Sanofi milestones to support its cash runway into 2029.
• Combined GAAP R&D and SG&A expenses fell 41% year over year. Management improved its full-year GAAP expense guidance by $5 million while maintaining the non-GAAP midpoint at $325 million.
• Novavax expects its Matrix-M-adjuvanted C. difficile vaccine candidate could enter clinical development as early as 2027. Oncology studies remain exploratory and preclinical.

Core Financial Results

Business and Operating Performance

Sanofi initiated its European Phase III trial combining Nuvaxovid with Fluzone High-Dose, known as Efluelda in Europe, in adults aged 60 and older. The trial generated a one-time $125 million milestone for Novavax. Management said the Sanofi partnership has generated more than $1 billion of revenue for Novavax to date.

Sanofi confirmed to Novavax that it is targeting a U.S. Phase III combination-vaccine trial in 2027 to support a potential U.S. approval. The first U.S. commercial sale would trigger a $225 million milestone, in addition to future product royalties. Management cited Sanofi’s public statements indicating a potential 2029 U.S. launch.

For the 2026-2027 COVID-19 season, Sanofi expanded Nuvaxovid promotion and availability through major U.S. retailers, including CVS, Walmart and Costco. Management said season-to-date Nuvaxovid vaccinations had already reached the total recorded during the previous full season and expects materially higher vaccinations this season. Takeda is also continuing to promote Nuvaxovid in Japan, where it was the second-most-used COVID-19 vaccine during the 2025-2026 season.

Novavax continues to evaluate Matrix-M through partnerships and material transfer agreements across infectious disease and oncology. Preclinical studies are testing Matrix-M alone and with immunomodulators. The company intends to use resulting data selectively in confidential partner discussions and peer-reviewed publications.

The C. difficile program is Novavax’s first internally selected candidate under its revised R&D strategy. Preclinical studies showed neutralizing antibody responses, gastrointestinal mucosal IgA and protection in two animal challenge models. Management believes the multivalent construct could cover more than 90% of circulating strains, but clinical validation remains the next major development step.

Management Guidance

Novavax raised its full-year 2026 adjusted total revenue outlook to $385 million-$415 million, with a midpoint of $400 million. The $145 million midpoint increase consisted of:

• $125 million from Sanofi’s European Phase III combination-vaccine milestone;
• $5 million of additional Nuvaxovid product sales;
• $5 million of additional Matrix-M adjuvant supply sales; and
• $10 million from adjusted licensing, royalties and other revenue, primarily deferred royalty revenue recognized during the quarter.

Management expects 2026 Matrix-M demand of approximately $55 million at the midpoint. This could be up to $15 million above the anticipated future run rate because of order timing and batches used to qualify partners’ new manufacturing sites.

Full-year 2026 combined GAAP R&D and SG&A expense guidance improved by $5 million to a midpoint of $385 million. On a non-GAAP basis and net of partner reimbursements, Novavax maintained the $325 million midpoint while narrowing the range to $315 million-$335 million.

For 2027, management expects to include the $75 million Sanofi technology-transfer milestone in the third quarter. R&D reimbursement and Sanofi amortization are expected to become minor revenue contributors and end during 2027. Novavax does not plan to guide for its legacy advance purchase agreement product sales.

By 2028, Novavax expects combined non-GAAP R&D and SG&A expenses to decline by more than $200 million, or over 50%, compared with 2025. The plan includes reducing headcount to less than half the Q1 2026 level and potentially cutting the operating footprint by more than 50% through building and laboratory consolidation.

Risks and Areas to Watch

• Novavax does not have access to Sanofi’s detailed combination-vaccine development plans and depends on Sanofi’s public statements and confirmations regarding clinical and commercial timelines.
• The potential $225 million U.S. commercial milestone depends on successful development, the FDA regulatory pathway and the first U.S. sale of a Sanofi combination product.
• Management identified the potential U.S. combination-vaccine launch as a primary contributor to the timing of future non-GAAP profitability, increasing the importance of Sanofi’s execution.
• Matrix-M evaluation agreements do not follow a uniform path, and management cautioned that not every material transfer agreement or experiment will result in a licensing transaction.
• The C. difficile candidate remains preclinical. Management said confidence is currently based on encouraging animal data, with clinical results representing the next major decision point.
• Planned facility consolidation could produce up to $35 million of noncash fixed-asset write-offs during 2027, depending on final accounting treatment.

Analyst Q&A Highlights

Management said the U.S. COVID-19 vaccine market was running at 94% of the prior season through October 23, based on IQVIA retail data. Weekly vaccination volumes exceeded 110% of prior-year levels during the latest two to three weeks, which the company viewed as a sign of potential stabilization.

On C. difficile, Novavax said its target product profile seeks differentiation through tolerability, immunogenicity, mucosal IgA responses and broad strain coverage. The company has selected a lead candidate targeting both toxin and non-toxin antigens and has incorporated recurrence models into preclinical testing.

For oncology, management is evaluating both personalized and off-the-shelf cancer vaccine approaches. Studies include Matrix-M alone and in combination with immunomodulators, but the program remains at an early exploratory stage.

Regarding partnership conversion, management said licensing decisions depend on each partner’s strategy and experimental results. Novavax’s approach is to build a broad data library and create multiple opportunities across infectious disease and oncology rather than rely on a single program.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good morning, and welcome to the Novavax Third Quarter 2026 Financial Results and Operational Highlights Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Jim Kelly, Executive Vice President and Chief Financial Officer. Please go ahead.

Naina Zaman

Good morning, and thank you for joining us today to discuss our third quarter financial results and operational highlights today on November 5, 2026. A press release announcing our results is available on our website at www.novavax.com, and an audio archive of this conference call will be available on our website later today. Before we begin with our prepared remarks, I would like to remind you that this presentation includes forward-looking statements regarding Novavax's current expectations related to, but not limited to, its partnerships, market opportunities and financial guidance. Our actual results may be materially different from such statements as detailed in the presentation. Discussions of non-GAAP figures and reconciliations to GAAP figures are available in our earnings press release and presentation. Descriptions of the risks and uncertainties associated with Novavax are included in our SEC filings. These can be accessed through our website.

Joining me today are John Jacobs, our President and CEO; Elaine O'Hara, Chief Strategy Officer; Dr. Bob Walker, Head of R&D; and Jim Kelly, our Chief Financial Officer. I would now like to hand the call over to John.

John Jacobs

Thank you, Naina, and welcome, everyone. As we near the end of 2026, I'm pleased with the progress we have made this year across the 3 pillars of our strategy: partnering our vaccine technology, driving targeted and capital-efficient R&D innovation and maintaining a lean and agile operating model. For those new to our story, Novavax is a vaccine technology company focused on creating long-term value through partnerships. We believe our technology can underpin a broad range of vaccines in infectious disease from viral to bacterial, and we are in the early stages of exploring its potential in oncology. By combining our own innovation with that of our partners and leveraging their manufacturing scale and commercial reach, we aim to expand access to our technology, unlock new opportunities and build a legacy of lasting impact on global health.

Our technology platform is the engine behind our business, built on a proven foundation in infectious disease. Today, it is used in 2 commercial vaccines, Nuvaxovid for COVID-19 and R21 Matrix-M or malaria. Both have demonstrated protection against serious disease and favorable tolerability at population scale with R21/Matrix-M extending that impact to children as young as 5 months old in malaria endemic regions. Our technology is also being applied in some of the most attractive vaccine markets. Sanofi recently initiated its Phase III influenza COVID-19 combination vaccine trial in Europe, and Sanofi management confirmed to us that they are targeting a U.S. Phase III start in 2027 to support U.S. approval.

The trial in Europe utilizes Novavax's differentiated COVID-19 vaccine and Sanofi's market-leading Fluzone high-dose influenza vaccine. The initiation of the Phase III CIC trial triggered a one-time $125 million milestone to Novavax and represents a significant future opportunity. This opens up even greater potential with the global flu and COVID-19 markets having a current combined value that exceeds $10 billion with significant burden of disease. Beyond viral diseases, we intend to enter the clinic with our differentiated C. diff vaccine candidate as early as next year. With no approved vaccine today, C. diff accounts for roughly 0.5 million cases and over 20,000 in-hospital deaths annually in the U.S. alone. This represents a significant unmet medical need and an opportunity for our technology to help millions of people in what could become a large and significant vaccine market.

Vaccine innovation has always been at the core of Novavax. We are already an established vaccine technology company, and we plan to expand further in infectious disease with our partners and MTA collaborators while advancing our early work in oncology by bringing in new partners, deepening existing partnerships and potentially enabling new vaccines. We see significant opportunities for our technology to drive long-term value creation.

Now let's take a few moments to touch upon some of the progress we have made over the past few months on the 3 pillars of our strategy. Starting with Pillar 1, partnering our vaccine technology. As already noted, Novavax earned a $125 million milestone following the initiation of Sanofi's pivotal Phase III CIC trial in Europe last month. We are on track to earn an additional $75 million milestone upon the completion of Sanofi's manufacturing technology transfer in mid-2027. Sanofi kicked off the '26, '27 COVID season with Nuvaxovid in the U.S., supported by expanded promotional efforts. They also introduced Nuvaxovid in select international markets, while Takeda continues to successfully promote the vaccine in Japan.

We're pleased with the level of collaboration with Pfizer and look forward to continued progress on that front with the potential to share more about the opportunities ahead as that partnership continues to evolve. And our MTA collaborations continue to advance with interest from companies and organizations in exploring our technology across a broad range of disease areas. Elaine will elaborate further on our progress within this pillar in a few moments.

And now Pillar 2, targeted and capital-efficient R&D innovation. Our work in R&D at Novavax focuses on 3 objectives: first, building a library of data to better understand how and where our existing technology can have an impact; second, expanding the utility of our Matrix-M technology platform; and third, advancing select innovative vaccine candidates. We're pleased with our progress in all 3 of these areas to date, and Bob will elaborate further during his commentary today. And finally, pillar 3, lean and agile operating model. Underpinning all of this is our financial discipline. This quarter, we raised our full year revenue framework and improved our expense guidance, bringing more clarity to our outlook.

We continue to drive down costs while maintaining core capabilities that we believe are critical to enable the successful execution of our strategy. Jim will take you through our performance and updated guidance later in the call. In closing, we're building a growing set of opportunities with existing partners, potential new partners and from our own platform across infectious disease and potentially oncology. Over time, it is our vision to see our technology embedded in a diversified set of commercial vaccines and development programs with multiple partners.

And with that, I will turn the call over to Elaine to provide an update on our partnership efforts. Elaine?

Elaine O'Hara

Thank you, John. I'll start with the news we announced last week. Sanofi has initiated its Phase III influenza COVID-19 combination vaccine trial, earning Novavax a $125 million milestone. The trial being conducted in Europe is assessing the safety and immunogenicity of Nuvaxovid in combination with Sanofi's leading flu vaccine, Fluzone High-Dose, also known as Efluelda in adults aged 60 and older. Sanofi has stated that they intend to be one of the first movers in the combination vaccine segment, and we believe this is an important step towards that goal.

This milestone reflects how Novavax and Sanofi continue to successfully execute on our agreement, which has to date generated over $1 billion in revenue for Novavax. Sanofi has also confirmed with us their intent to target initiation of a U.S. CIC Phase III trial in 2027 to support U.S. approval. As a reminder, we are eligible to receive a onetime $225 million milestone on the first commercial sale of a CIC product in the U.S. While Sanofi has communicated preliminary expected time lines, these will be subject to their subsequent updates on clinical activities and, of course, U.S. FDA regulatory pathway.

More broadly, we continue to make progress on our partnership with Sanofi. After select market efforts last year, Sanofi has kicked off the 2026, 2027 commercial launch of Nuvaxovid with improved awareness efforts in both breadth and depth. The focus is on building awareness of the only non-mRNA COVID vaccine option in the U.S. with its associated favorable tolerability profile. Sanofi is bringing their expertise as one of the largest vaccine companies in the world to this market through a seasoned vaccine sales force from one of the world's leading vaccine businesses, availability at major retailers like CVS, Walmart and Costco, running select pilots across retailers to generate learnings that can help build awareness and uptake over time.

Picking off DTC efforts like co-branded advertising on TV and online, creative awareness efforts from serve-up protection campaign with USA Pickleball to social content with NBA Champion Karl-Anthony Towns from the New York Knicks to drive people into pharmacies and setting the stage for launches in select ex-U.S. markets in 2026 and beyond. We are pleased with the level of investment that our partner has been making to build awareness and begin to penetrate this market and with the intent of building meaningful market share over time.

We expect awareness, access and adoption to build season upon season with Sanofi taking a methodical approach and learning from markets and channels where Nuvaxovid gains traction. In Japan, Takeda continues to build on last season's momentum where Nuvaxovid was the second most utilized COVID-19 vaccine during the 2025, 2026 season. We look forward to Takeda building upon that momentum this year in the world's third largest pharmaceutical market. Exploratory work using Matrix-M with partners and MTA collaborators continue with multiple pharmaceutical and biotechnology companies, including Pfizer and Sanofi.

Preclinical studies are underway across infectious disease and oncology, which continue to generate evidence and potentially create the next license opportunity. That same partnering lens applies to our own pipeline like our C. diff candidate. Our primary intent is to out-license our internal candidates for new or expanded partnerships. So in that sense, every program we advance internally is designed to also be an engine for partnering.

And so with that, I'll pass it over to Bob to discuss our R&D progress in greater detail. Bob?

Robert Walker

Thanks, Elaine. It's an exciting time at Novavax as we explore the potential of our technology platforms to drive vaccine innovation. Vaccine platforms are reshaping how the field develops new vaccines, and we believe our technology can play a central role in that shift across infectious disease and potentially oncology. That was the focus of a panel I joined last month at the World Vaccine Congress Europe, where industry leaders, regulators and vaccine experts reinforce the need for a diverse set of vaccine platforms and the important role of adjuvants in next-generation vaccines. John outlined the 3 strategic objectives of Novavax's R&D efforts. First, building a library of data to better understand how and where our existing technology can have an impact. And this includes generating data for potential partners that may be compelling for their own vaccine programs; second, expanding the utility of our Matrix technology platform; and third, advancing select innovative vaccine candidates.

The first 2 objectives go hand-in-hand. As we grow our library of data, we are also systematically exploring new adjuvant approaches and identifying the specific use cases where Matrix-M can add the most value. We view that library as a strategic asset. And as the evidence grows, we believe so too does the potential for new and expanded partnerships. In infectious disease, as we shared last quarter, we're systematically evaluating Matrix-M across commercialized infectious disease vaccines in large markets. These studies are designed to show potential partners where adding Matrix-M may meaningfully improve performance. This is supplemented by the work that our partners and MTA collaborators are doing.

In oncology, we initiated exploratory studies with Matrix-M alone and in combination with immunomodulators, including survival studies in animal models. And our MTA collaboration efforts are generating early data. While it is still early days, we're excited about our initial observations and are continuing to explore Matrix-M's potential utility in the cancer vaccine field. As a reminder, the central challenge in oncology is generating cellular immune responses strong and durable enough to fight tumors. We believe Matrix-M may help the body's own defenses to seek out and attack tumor cells by activating the innate immune system, priming immune cells to present antigens more effectively and drive any tumor cellular immunity in the form of CD8-positive T cell responses.

This rationale is supported by published peer-reviewed studies, including one study by Novavax Researchers and the other by an academic team at Stanford. Our focus with these exploratory studies in both infectious diseases and oncology is to expand the evidence base of our technology platform and fuel the next generation of partnerships. We hold the industry's most extensive data set on Matrix-M, which is deep and broad and built over decades. And that data is core intellectual property. We plan to be deliberate in how we use it, sharing directly with potential partners under CDA, where it creates the most value and selectively through additional peer-reviewed publications.

Our third objective is advancing select vaccine candidates where the medical need is great and the opportunity is compelling for our technology to potentially offer a differentiated option. Our Matrix-M adjuvanted C. diff vaccine candidate is the first candidate we've selected to advance under the new strategy, and we anticipate entering the clinic as early as 2027. In September, we presented preclinical data at the International C. diff Symposium on our multivalent candidate, which targets multiple components of the bacterium, including the toxins that drive disease. We've consistently observed high titer serum neutralizing antibody responses, mucosal IgA from the gastrointestinal tract and protection from lethality in 2 animal challenge models. We believe our vaccine construct has the potential to cover over 90% circulating strains and provide broader protection than approaches that target the toxins alone. We're entering an exciting period for Novavax with the potential to help develop vaccines across more diseases than ever before. I look forward to sharing more progress in the coming quarters.

I'll now turn the call over to Jim to discuss our financial results.

James Kelly

Thank you, Bob. Let me begin by highlighting several significant updates that we believe demonstrate the progress we're making on our growth strategy. Today, we shared our continued progress with our partners commercializing both Nuvaxovid and R21. Our expectations to achieve near-term milestones from Sanofi totaling $200 million that support our expected cash runway into 2029 and another quarter of meaningful progress towards our cost structure targets and financial strength goals.

Specifically, we achieved a 41% year-over-year reduction to GAAP R&D and SG&A in the current quarter and ended the third quarter with $676 million in cash and accounts receivable. In addition to our third quarter results, we are raising our full year 2026 revenue framework by $145 million to $400 million and improving our full year 2026 financial guidance by $5 million.

First, I'll walk through our revenue performance. Our third quarter total revenue of $68 million compares to $70 million in the prior year. In the current quarter, we saw growth in multiple revenue categories that provided an offset to a significant reduction to R&D reimbursement as Novavax nears completion of our support for Sanofi's clinical and 2026, '27 COVID-19 season activities.

Turning to our full financial statement results. For the third quarter of 2026, we recorded a net loss of $31 million as compared to a net loss of $202 million in the prior year, resulting in $171 million year-over-year improvement. A summary of the key drivers of the year-over-year change to our third quarter net loss highlights meaningful improvements to many aspects of our financial performance. Starting with a reminder that in the third quarter of 2025, we recorded $126 million in noncash charges related to asset impairments and debt extinguishment.

Turning to the third quarter of 2026. We saw a $42 million reduction to R&D reimbursement that I noted earlier and an $87 million improvement from changes to all other P&L categories, including partner-driven revenue growth, significant operating expense reductions and other income expense. We believe these third quarter 2026 trends reflect the continued strong execution of our growth strategy and financial performance.

On the operating expense front, we continue to reduce our cost structure in the third quarter of 2026 with a 41% and 14% decrease to combined R&D and SG&A on a GAAP and non-GAAP basis, respectively. Importantly, we made significant reductions to both our R&D and SG&A expense profiles. The $46 million and 47% reduction to GAAP R&D expenses in the third quarter highlights our ability to drive down our cost structure upon the completion of select partner support activities. We believe these improvements to our operating efficiency also highlight that we're on track to deliver our full year expense guidance.

Today, we're raising our full year 2026 revenue framework by $145 million and expect to achieve adjusted total revenue of $400 million at midpoint with a range of between $385 million and $415 million. The $145 million increase to adjusted total revenue at midpoint was driven by: first, the addition of the $125 million milestone associated with the Phase III trial initiation of Sanofi's CIC program in Europe; a $5 million increase to Nuvaxovid product sales as we completed our Novavax legacy APA sales for the season; a $5 million increase to adjuvant supply sales on continued strong demand from Matrix-M from our license partners for the commercial products.

Of note, the 2026 Matrix-M demand at midpoint of $55 million is likely up to $15 million higher than our expected future run rate due to order timing and batches purchased to enable qualification of new manufacturing sites by our partners in 2026. And finally, a $10 million increase to adjusted licensing royalties and other, primarily driven by the deferred royalty revenue recognized in the current quarter. As a reminder, our non-GAAP adjusted total revenue excludes Sanofi supply sales, royalties and future milestones. This means there may be revenues in 2026 that are additive to our expectations.

A few comments as a preview to our 2027 revenue framework. While we do expect to include the $75 million Sanofi tech transfer milestone in the third quarter of 2027, we do not expect to provide guidance for Novavax's APA product sales. In addition, we expect R&D reimbursement and Sanofi amortization to become very small contributors to revenue and to end during 2027. With those updates, we intend to follow a revenue framework very familiar to 2026. We are also improving our full year 2026 combined GAAP R&D and SG&A expense guidance by $5 million and expect to achieve results of $385 million at midpoint. On a non-GAAP basis and net of partner reimbursements, we reiterate our midpoint of $325 million and are narrowing the range to $315 million to $335 million.

Looking ahead, we are also reiterating our 3-year combined non-GAAP R&D and SG&A expense guidance. Looking forward to 2028, we expect to reduce our non-GAAP R&D and SG&A expenses by over $200 million, reflecting a greater than 50% decrease when compared to 2025. Importantly, in 2026, we are already operating at an approximately $200 million core spend profile when excluding costs tied to completion of partner and APA performance obligations. As these near-term partner-related activities are completed, we expect to be in a position to further decrease our total spend. To reach our 2028 lean and agile operating model target, we anticipate having less than half the headcount as compared to our first quarter 2026 and are exploring an over 50% reduction to our operating footprint via consolidation of buildings and laboratories.

This could result in noncash fixed asset write-offs of up to $35 million that we anticipate will occur during 2027, and this is in addition to our existing non-GAAP combined R&D and SG&A expense guidance. Pending on the final P&L accounting for these noncash write-offs, plus approximately $5 million of expected R&D reimbursement, this could translate into 2027 GAAP combined R&D and SG&A of up to $265 million at midpoint.

I'll finish by highlighting our financial objectives to drive shareholder value. You heard today our progress towards advancing our growth strategy on many fronts, including the update that Sanofi has confirmed to Novavax their public statements regarding their intent to start a U.S. CIC Phase III in 2027 and the potential for a U.S. CIC commercial launch in 2029.

As a reminder, Novavax does not have access to the detailed plans, time lines or activities related to a Sanofi CIC vaccine and is reliant on their public statements and confirmations. A U.S. Sanofi CIC launch triggers a $225 million milestone payment to Novavax and its assumed timing is currently a primary contributor to the timing of future Novavax non-GAAP profitability. That said, we are updating our non-GAAP profitability timing expectations to align with this new information from our partner. We look forward to sharing additional updates as we improve Novavax's financial performance, cost structure and strength to deliver shareholder value.

With that, I'd like to turn the call back over to John for some closing remarks.

John Jacobs

Thank you, Jim. As we head into the end of the year, we look back on 2026 with a great sense of accomplishment at Novavax. We achieved a lot this year. And in doing so, we believe we have positioned the company well to continue positive momentum via the execution of our growth strategy. This year, we added Pfizer as a partner, earned a $125 million milestone following the Phase III CIC trial initiation by Sanofi and expanded our MTA collaborations across infectious disease and into oncology, while we continue to reduce costs to support our lean and agile operating model.

Looking toward 2027 and beyond, we see multiple potential catalysts, including earning additional milestones from existing partners, Sanofi, Pfizer and Takeda, continued royalties from Nuvaxovid commercial performance, potential clinical entry for C. diff as early as next year and the advancement of select vaccine candidates in our portfolio. In addition, we continue to pursue new partnerships and generate data to explore where Matrix-M can add value in infectious disease and potentially oncology. Our team's hard work and focus on the execution of our growth strategy continues to build a strong foundation for Novavax. The purpose of every interaction we have with current and potential partners is to provide multiple opportunities for success as both we and they continue to evaluate the applicability of our technology. And by the way, for those opportunities that do succeed, we believe they could equate to significant value creation over time.

We are excited about the level of interest we are seeing in our technology, the ever-growing library of supporting data and the potential to build a future Novavax with multiple partners and multiple products that may drive significant value and leave a global health legacy for years to come. Sincere thank you to our employees for their passion and dedication and to our shareholders for your continued belief in Novavax. We wish you all a wonderful holiday season filled with meaningful time and memories with family and friends.

And with that, operator, we'd be happy to open the line for questions. Thank you.

Operator

[Operator Instructions] Your first question comes from Roger Song with Jefferies.

Question-and-Answer Session

Jiale Song

A couple from us. So first is this 2026, '27 COVID season. How would since approaching the peak Matrix invention now? And how would you comment from the learning related to Sanofi's strategy positioning? And then how would you say in the coming years, particularly with the potential COVID/flu combination getting approval? So that's on the COVID side. And then in terms of the MTA, any updates on the new MTA and then progress on the existing MTA? And then lastly, just on the C. diff, nice to see your commitment into clinical. And then how should we think about the target product profile for your C. diff versus other pipeline? And then what are the key unmet need that you try to address?

John Jacobs

Thank you, Roger. Appreciate it. Jim, do you want to take the first question on COVID season learnings and pull-through to future performance?

James Kelly

Hey, certainly. And thank you for the questions, Roger. So with the COVID season, this is a critically important season in the '26, '27 globally. I think everyone is looking at the marketplace, really looking to understand where are we with stabilization in addition to, hey, how does Nuvaxovid and all the different COVID vaccines performing. So why don't I start first with some market perspective. In 2025, this was a $6.8 billion market COVID globally. And that made it a top 10 -- heck, a top 5 market -- as we enter this season, I'll give you my thoughts on the U.S. versus ex U.S. market.

In the U.S. market, last year, 2025, you had a $2.8 billion market. And if you approximate retail plus non-retail doses, it was about a 27 million dose market. All right. What are we seeing in the U.S. season to date? And this is through, I think, it's October 23 doses shots in arms. This is the IQVIA retail data. Well, the market is trending season-to-date at 94% the prior year, all right? And in the most recent weeks and including 2, 3 weeks, the market on a weekly basis has been over 110% of prior season. So this is leading us to believe that the U.S. market is approaching a certain stabilization compared to prior years, which I think is beneficial to all, right, and glad to see the vaccination stabilizing.

So that's the unit basis. What we're awaiting is the dollar basis. But based on the price taken by participants year-over-year, we're going to closely watch whether the market is flat, up or it's possible down, but are we at a minimum stabilized on a dollar-wise basis. So that's the U.S. market. Then when you go to the ex U.S. market, which was about $4 billion last year, we're hitting the end of the APA era with Pfizer, for example, in Europe. So I think we're really looking to next year to really better understand the major markets. We will say that we're pleased with the Japanese market, third largest market in the globe for pharma and Takeda, right, who has Nuvaxovid there and has the second most utilized vaccine Nuvaxovid in Japan last season and looking forward to them building on that momentum.

So back to Nuvaxovid for this season. Well, what we're seeing season to date is the number of shots in arms are already equal to the full season last year, and we're just at the beginning. And so we, therefore, do anticipate materially higher shots in arms this season versus last season. And what I'm going to do is I'm going to hand off to Elaine, who leads our corporate development and alliances to talk about what exactly are we seeing and hearing from our partner, Sanofi.

Elaine O'Hara

Yes. Thanks, Jim and yes, just to round out the answer set. So with our relationship with Sanofi, obviously, we've been working very closely with them all throughout the season and delighted to see the methodical building of share over this season. They've run some exclusive pilots among some major retailers, and we're seeing very, very nice share returns and reorders for Nuvaxovid in certain pilot settings. And so that's very promising. And as it relates to Takeda, that's an exceptional market for us as well. There are multiple clinics and hospitals that have selected Nuvaxovid as our primary vaccine in the Japanese market. So delighted to see the robustness of the season continue. And again, with Sanofi, they continue to methodically approach this and build this market, build awareness and Nuvaxovid is really -- is very much promotionally sensitive with their DTC campaign and their outreach in these pilot markets, we're seeing a lot of receptivity and they're translating into shots in arms.

John Jacobs

And what they're seeing there is very encouraging that they'd be able to build upon that as they go into subsequent seasons on what they're learning in select pilots where we see strong consumer receptivity and uptake based on different tactics they're experimenting with. So encouraging news, and we really believe they'll be able to build meaningful market share over time methodically.

Roger, 2 other parts to your question. Just in the essence of time, we'll move to those right away, guys. MTAs, Roger was asking, Elaine, about progress there on potential new partnerships, et cetera.

Elaine O'Hara

Yes. Thanks for the question. Regarding MTAs, we're delighted to see the progress that our partners are making and the remarkable level of interest we see in the Matrix technology. Our partners continue to explore the expanded utility of Matrix. And all of the preclinical testing that they're invested in is ongoing. And so we look forward to be able to share that data with you at a later stage when they become available. But at this point in time, again, delighted to see the progress across the MTAs in which we're engaged.

John Jacobs

Thank you, Elaine. And Bob, do you want to pick up Roger's question on TPP for C. diff. Yes.

Robert Walker

Thanks, John. Yes. So for C. diff, we're -- our target is to differentiate from the other options that are out there. And we're differentiating potentially on tolerability based on Matrix-M's known tolerability profile. We're seeking to differentiate on immunogenicity and part of that also has to do with local mucosal IgA responses. And we're seeking to differentiate on the basis of the breadth of strain protection. And we've talked about how we've intentionally designed our construct to cover more than 90% of currently circulating ribotides and strains.

The details of the TPP, I'm not going to get into other than to say that the target product profile is, I consider to be aggressive. And we're not trying to match what's out there. We really want to be superior to what's out there. So that's our goal.

Operator

Our next question comes from Mike Nedelcovych with TD Cowen.

Michael Nedelcovych

It's Mike Nedelcovych on for Chris LoBianco. I have 2 questions. One is on your early oncology efforts. You mentioned some initial preclinical studies of Matrix-M alone and with some other combinations. But what's the potential to pair with personalized cancer vaccines, if any? And then a follow-up question on your response around your C. diff efforts. Maybe you could just speak to your level of confidence that you will be able to deliver a differentiated product? And what are the next go/no-go steps from here?

John Jacobs

Bob, do you want to take the first question on oncology?

Robert Walker

Yes.

John Jacobs

I believe just to restate, Mike, you were asking about the potential of our technology to be deployed into personalized cancer vaccine option. I think right now, Bob, we're in the early stage of exploration on Matrix-M's potential in oncology. And depending on what we learn there, we'll learn more about where Matrix may fit into that emerging ecosystem where we may have traction. But Bob, did you want to comment on our potential there?

Robert Walker

Yes. So I would say that at this point in time, we're looking broadly across the oncology space. And that includes off-the-shelf as well as personalized approaches. I wouldn't rule out any of those. Again, it's early days, like John said. So we'll hope to keep you informed as time goes on in terms of where we're seeing the best potential activity for Matrix.

John Jacobs

You're right. You want to see that best activity first and then how that's deployed later, assuming success on activity, then that would come out to play. And then your second question, Mike, could you repeat for us, please?

Michael Nedelcovych

Sure. As a follow-up on your comments on the C. diff target product profile. What's your level of confidence that you can deliver that given that it's early days? And what are the next steps? And more crucially, I guess, what is the next go/no-go decision level?

John Jacobs

Go ahead, Bobby.

Robert Walker

Yes. So our level of confidence is, I would say, appropriately matched to where we are in the development cycle. We're basing -- currently, we're basing our confidence on the preclinical data, which continues to look encouraging and consistent. The next step is obviously to get into the clinic. And when we have those data, I think we'll be at another point for making that assessment.

Operator

Your next question comes from Tom Shrader with BTIG.

Thomas Shrader

Congratulations on the progress. Obviously, the Sanofi CIC comments are fantastic. A couple of nerdy vaccine questions. The C. diff, one of the crazy things about C. diff is the recurrence, like the bacteria itself doesn't sterilize from future infections. Does your vaccine -- do you have at least a model how you might address that? Because people get these things over and over, it's kind of unusual. And then as a follow-up, I'm just kind of curious if you see mumps as a sitting duck for Matrix-M, the weakest part of MMR, people want to split up that vaccine, and it doesn't last well. So I'm curious if that's -- if you agree that, that's an equal or an exciting target for you.

John Jacobs

Thank you, Tom. Bob, do you want to take the question on C. diff? The question was, do you have any thoughts about addressing recurrence in patients who have that? And is that part of our thought process in our development program?

Robert Walker

Yes. Thanks. So to answer your question, there are translational models for recurrence. We've incorporated that into our preclinical program. Recurrence is a high bar. I think we all understand that. But it's definitely one of the endpoints that we're looking at and we'll continue to be looking at.

John Jacobs

And your other question, Tom, regarding mumps, what I would say is we continue to assess diseases in infectious disease that we could apply as well as oncology where we might be able to apply our technology. We're open-minded to that. We prioritize, there's quite a rigorous process we put together within Novavax to assess market potential, unmet need, potential of our technology to succeed, trade-off analysis on if we pursue a certain area, what are we not pursuing instead of that, and we're looking to optimize value and return to our stakeholders when we make those decisions. So thank you for the suggestion. Look forward to the continued dialogue. Appreciate your questions.

Operator

Your next question comes from Geoff Meacham with Citigroup.

Jarwei Fang

This is Jarwei Fang on for Geoff. 2 questions. Maybe one on the tech -- good morning. Maybe 2 questions. First, on the tech transfer. Maybe just help us understand maybe what operational work remains before the $75 million milestone is earned in third quarter of next year? And where do you think there's the greatest remaining execution risk? And then second question is on the Matrix-M conversion. I guess what evidence or development milestones typically move an MTA collaboration into a paid license? And I guess maybe if you could give us a sense of how many current evaluations are maybe approaching that decision point.

John Jacobs

Jim, you want to take the first part of that question?

James Kelly

Actually, John, I'll take that. With the tech transfer just from the Alliance perspective, -- we're working very closely with Sanofi and are delighted to say that we're transitioning through most of the activities that have to occur for the actual tech transition to occur in 2027 by midyear of 2027 next week -- or next year, I'm sorry. So all that work is ongoing and nothing untoward there. And again, we're just working through the process. So delighted about our opportunity to transfer our technology, as I said, midyear 2027.

John Jacobs

And Elaine, I think the second part of Jarwei's question related to, is there anything specific we could point to or guide to on what happens with the MTA arrangements we have, the experiments going on that would lead to potentially further licensing deals, et cetera?

Elaine O'Hara

Yes. No, it's a great question. Obviously, it really depends on the partner. I had mentioned earlier on that all of the engagements that we have with our various partners as they progress through their experimentation set for each MTA is ongoing. There's a remarkable level of interest. There's a remarkable level of continued exploration of expanding the utility of our Matrix-M across both infectious disease as well as oncology, and we continue to be very pleased with that progress.

John Jacobs

Yes. And Jarwei, it's not obviously not a one-size fits all. Every company has different needs. Matrix-M is being explored in a wide array of potential targets in infectious disease and early explorations in oncology for its potential there. Each company has its own strategy, needs. And look, it's biotech. Part of our strategy is putting a lot of -- to use a colloquialism, shots on goal to succeed, right? We want to put as many opportunities as we can on the table through this strategy. And in life and in biotech, not everything you try will succeed. Not every MTA will turn to a deal, not every experiment will be successful, but many of them could be. And so by having more shots on goal with multiple potential partners and our existing partners across multiple disease areas with a technology that's proven in many of those areas in infectious disease, and we're learning more about its potential in oncology, we feel we increase the odds for tremendous growth and success for Novavax over time. Appreciate your questions.

Operator

[Operator Instructions] Your next question comes from Mayank Mamtani with B. Riley Securities.

Mayank Mamtani

Things happening nicely, lots you accomplished this year. If I could also ask a couple of more focused questions on C. diff and oncology. Just looking at your September symposium abstract, you are testing a number of constructs here. Obviously, the nontoxin antigen being part of some of these seem like a big part of the differentiation, specifically to the Pfizer effort. So I don't know if you could comment on how further along you are in prioritizing one particular candidate and maybe just for development plan, purposes, is this looking at the Pfizer development sort of the right way to think about how you progress Phase I through Phase III here? And then on oncology, you seem to be working beyond Matrix-M on additional formulations for, I guess, driving some CD8 T cell responses and tumor antigens based on your patent applications. I was just curious why TLR agonist combination make more sense versus maybe as you know, a lot of your peers work on checkpoint combination as an immunomodulator. Maybe you're doing both. If you could just clarify those topics, that would be great.

John Jacobs

Thank you, Mike. Bob, why don't you start with oncology first, I believe Matrix-M alone versus in combination with things like TLRs, checkpoint inhibitors and what are we exploring, Elaine? And Bob, you can take that one.

Robert Walker

Thanks, John. Yes. So we are looking at all of the above. I think that's the simple answer. We're -- as mentioned in my prepared remarks, we are combining Matrix-M with immunomodulators in some settings. We're looking at Matrix alone and others. So that's the line of investigation we're taking right now.

Elaine, do you want to add anything?

Elaine O'Hara

Yes. Just to add, Mayank, great question. Our goal is to generate data in various settings with Matrix-M, as Bob referred to, so that we can leverage that data then with potential partners. And so our goal is to show how Matrix-M actually works in this immunomodulating setting, how it acts within the tumor environment, the microenvironment. And so again, all part of the data set that we're looking forward to seeing in the future.

John Jacobs

Mayank, if we understood your question on the C. diff program, what we understood you asking is, are we looking to Pfizer's program as a model? Is that something maybe you could get your arms around from a timing perspective and approach perspective? Did we hear you correctly?

Mayank Mamtani

And also, I think they focus mostly on the toxin and then you're doing the nontoxin antigen as part of the construct, just broader strain comment you had earlier. So if you could maybe...

John Jacobs

The difference in how we're approaching that. Go ahead, Bob and Elaine.

Robert Walker

So as you correctly pointed out, our construct targets both toxin and nontoxin antigens. And we do have a lead candidate, yes, to answer that question. So we have selected amongst the candidates we've generated the one that we are advancing. And with respect to Pfizer, we're obviously watching closely the competitive landscape, and we're learning from the successes and failures and incorporating that into our planning. Yes, absolutely. In terms of timing, Pfizer is in Phase III and we're preclinical. So I mean, there's -- so there's that obvious difference there. But we're -- as mentioned previously, we're trying to leverage the ways we can be differentiated.

John Jacobs

Yes. And to add to that, Mayank, we really would like to see Pfizer succeed here. I mean, certainly, there's a tremendous unmet need. And there's not a lot there to help the people who are suffering. And I will say, even though the formal earnings call, my sister-in-law lost a dear friend just a year ago to C. diff that was unexpected, a mama 3, and it was really tough. So personally, I've seen it impact friends of our extended family. This is something we want to take on. And I think if Pfizer succeeds and it looks like they're on a good path and have something there, we're hoping they do. We would like to be able to follow that with something that's differentiated and offers another alternative in a market that's being built by a leader like Pfizer as well. So look, we're on a good mission here. We're early. We can be in the clinic as early as next year. We have that lead candidate identified, as Bob said, we're encouraged by what we're seeing early on, and we'll keep you posted.

Mayank Mamtani

Okay. Great. And if I -- lastly, if I could squeeze in one more for Jim. On the increased guide framework here, on the $20 million beyond the $125 million milestone that -- congrats on getting that from Sanofi. Is that season-related performance? Or is that from supply or other partner revenue, if you could clarify that.

James Kelly

Certainly, Mayank. You're right. We -- of the year-over -- the increase of $145 million to our revenue framework for full year 2026, $125 million of that was the addition of the CIC milestone. That remaining $20 million is split into 2 groups. $10 million is related to product sales. So $5 million is Nuvaxovid and $5 million is Matrix sales. So that's the $10 million that is in product sales. And what that reflects in product sales is the completion this season of our APA deliveries, right? So we had successful delivery of all and a little bit more of our current year APA/Nuvaxovid deliveries that are Novavax. And then on the Matrix sales, we've seen just robust demand from our partners this year from Matrix-M via commercial partners and even as a part of their development work. And on the commercial partners, in particular, as they invested in their supply chain, setting up new validated manufacturing, it has created incremental demand. And I shared with folks that, hey, that put us at probably about a $15 million higher than a normally expected run rate, but still the underlying demand is strong. So that's the first $10 million of the $20 million.

On the second $10 million of the $20 million, the primary driver is this quarter, we recognized a noncash deferred royalty. And this was tied to SK Bio and prior sales to the Korean government that were subject to certain potential to use in a future period that it was determined it was appropriate to recognize at this time. So those are the pieces.

Operator

Your next question comes from Alec Stranahan with Bank of America.

Alec Stranahan

Congrats on all the progress in the quarter, up from the Sanofi side. Maybe just on that EU study, curious how you view the Moderna combo, which is approved in the EU now as maybe tracing or maybe even accelerating interest in Sanofi's program? I'm just thinking about pace of enrollment and whether that would influence at all kind of the geographic mix within that study. And then maybe one for Jim. Just around the 2029 breakeven the non-GAAP profitability to breakeven there? And how much does this depend on function or do you feel pretty comfortable that the cost management can kind of get you there on them?

John Jacobs

Thank you, Alec. Let me start with the first part of your question. Just as a reminder, we don't have access to the detailed plans or time lines or activities related to the Sanofi CIC vaccine. We're reliant on their public statements and confirmations on that. And we can't and won't speak for them on strategy. But what we do see, and I think what you and I encourage everyone to pay attention to this emerging ecosystem on vaccines, there's a lot of interest in combination vaccines from many companies. So we're encouraged by the advance of Moderna's product. We're encouraged by Sanofi's steps in a great direction to start their study in Europe and their commentary that they intend to start a study in 2027 in the United States market. That's very exciting. And should they succeed there and meet all the requirements for a U.S. product launch, upon first sale, we would earn a $225 million milestone for Novavax and then royalties on all those different products. So we see our strategy playing out. We see it advancing. We see Sanofi leaning in, making investments in DTC, making investments in growing consumer awareness around the globe of Nuvaxovid, building methodically a market share position they can continue to learn from and build upon and making the investments that we're very excited about in combination vaccines, continuing to execute on our partnership and leaning in.

Jim, did you want to take the second piece on 2029?

James Kelly

Exactly. And in addition to kind of directly answering the 2029 question, why don't I use this as an opportunity just to reiterate our financial performance goals, right, what our objectives are and how that fit within these objectives. So I think an important update we shared today is that with line of sight to an incremental $200 million in milestones from Sanofi, we now see we have, based on cash on hand and receivables at 9/30, a runway, and this is before other incremental cash flows to the company other than reimbursement of Matrix orders and R&D through well into 2029, right? So you're talking about 3 years' worth of cash runway here. So that's step one of building our financial strength while we grow, while we enter our growth mode of generating a diversified set of revenue across our partners.

So -- but we're not just relying on that. We're, of course, taking a disciplined approach to our cost structure to have those paid off by the first quarter of '29, further cleaning up our balance sheet and financial strength, all the while maintaining at least 2 years of cash flow. So then you come to, all right, great. Let's talk about sustainable, growable cash flow over time. Well, what we had said is that the ability to reach non-GAAP P&L profitability, a primary contributor was the CIC launch in the U.S. Of course, that came with a $225 million milestone. It's not the only mechanism to get there, of course. But it was the key and primary. Well, we got a great update from our partner, Sanofi, this week, right?

You heard the probability of advancing and getting a Sanofi CIC product to market is increasing as they themselves make statements that they're initiating studies this year for Europe, intend to initiate in the U.S. next year to support market approval, which is the key to get that $225 million milestone. And so the ability, I think, for investors and analysts to begin to ascribe more value, right, to the future cash flows from CIC product or products is rising. All right. So then with respect to the 2029 profitability, hey, we have a target of $150 million to $200 million. You back out stock-based comp, you clean up your balance sheet and continue to we expect to see royalties grow from Nuvaxovid from Sanofi as they methodically grow that market. Continue to work with our other partners, pulling through milestones, either tied to existing deals or perhaps future deals is a mechanism to get to this non-GAAP profitability in addition to the milestone.

Operator

Your next question comes from Pete Stavropoulos with Cantor Fitzgerald.

Unknown Analyst

Congrats on the quarter. This is Samantha on the line for Pete. So you described in some detail how Matrix-M could contribute to therapeutic vaccines in the oncology setting. Knowing this immune stimulating profile for Matrix-M, what are other therapeutic and non-infectious disease protective vaccines you see as the most promising for leveraging Matrix-M?

John Jacobs

Bob, Elaine, do you want to take that one?

Robert Walker

Beyond the infectious disease and oncology, I think that is our current focus. And we've done our own scanning exercises, and that's where we've selected to do this exploratory work. I think that there are other therapeutic areas that we could talk about hypothetically. But at this point in time, our focus is really on what I said, ID and oncology.

John Jacobs

And that's key because focus is what matters here. We have a lean investment profile. We're making choiceful, thoughtful investments after significant and rigorous assessment of market potential, probability of success that we believe internally our tech may have in certain target areas, how we're placing those bets and experiments with the intention of creating a growing set of assets, a growing set of data, a growing set of understanding around our technology that facilitates further partnering expansion of existing partnerships and potential new partnerships. That's the goal, Samantha. But we do believe the technology has applicability in a broad array of areas, and we continue to explore that in a very focused way.

Operator

Your next question comes from Sean Lee with H.C. Wainwright.

Xun Lee

Just on the -- one on, in the prepared remarks, you mentioned that you saw positive data and Matrix-M to available flu, RSV and pneumococcal vaccines. So I was wondering, do you plan on making any of that data public in the future? And are there any discussions already with potential partners about adding Matrix-M to licensed vaccines?

John Jacobs

Yes. Go ahead, Bob.

Robert Walker

So we are actively investigating Matrix-M with a list of potential candidates. Those data, our intent is to use those data thoughtfully and in a way that's most apt to lead to value creation. I expect that, that's going to be under CDA with prospective partners and selectively perhaps through publications. But I don't think that we will necessarily be conveying that type of information on these earnings calls, for example. Elaine?

Elaine O'Hara

Yes. And just to answer the -- maybe the second part of the answer to your question is we're also exploring the applicability and the -- how Matrix-M can improve upon commercial vaccines that are already available in the market. And so that's a study set that we have been working on and generating actually over the last several years, and we expect to continue that work and engage with partners specifically as we see those data sets come to fruition and what they may unveil. So more on that as well. But again, our goal will be to have specific partner discussions as those data become available.

John Jacobs

Yes, Sean. And that gives our business development team and R&D team a growing set of data. We keep talking about data as an asset for Novavax in this strategy. So we continue to generate a library of data on where and how Matrix-M may have impact across disease targets in oncology and infectious disease from viral to bacterial and beyond an infectious disease across several tumor models in animals, and we're working with partners in our MTAs on a series of experiments as well that go across infectious disease and oncology. And importantly, the team has looked at these commercial vaccines that are available in large markets. And by adding Matrix to that and doing experiments with those vaccines, our team can then go in and show the companies who market those and other companies who may be developing competitors for those, what Matrix-M can do on those platforms and with those vaccines. By adding it, can you make it less expensive to manufacture perhaps. Can you make it more immunogenetic? Perhaps, right? And this is what's really exciting about our data. How much of that we choose to share, we're going to be careful and selective in how we do that go forward.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to John Jacobs for any closing remarks.

John Jacobs

Thank you, everyone, for joining us today and for your thoughtful questions. We appreciate the continued interest in Novavax. It's been a year of meaningful progress for our company, and we look forward to building on that momentum and sharing more with you in the new year. Have a great day, everyone. Thank you.

Operator

This concludes today's call. Thank you for attending today's presentation. You may now disconnect, and have a wonderful rest of your day.