1000694--3/17/2008--NOVAVAX

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{product, candidate, development}

{property, intellectual, protect}

{acquisition, growth, future}

{stock, price, share}

{product, liability, claim}

{provision, law, control}

{personnel, key, retain}

{cost, contract, operation}

{customer, product, revenue}

{cost, regulation, environmental}

{debt, indebtedness, cash}

{regulation, government, change}

{stock, price, operating}

{loss, insurance, financial}

{competitive, industry, competition}

We have repositioned ourselves from a specialty pharmaceutical company and face all the risks inherent in the implementation of a new business strategy. We have limited financial resources and we are not certain that we will be able to maintain our operations or to fund the development of future products. Many of our competitors have significantly greater resources and experience, which may negatively impact our commercial opportunities and those of our current and future licensees. We may have product liability exposure. If we lose or are unable to attract key management or other personnel, we may experience delays in product development. We have experienced significant management turnover. Our substantial indebtedness could adversely affect our cash flow. The conversion of our outstanding convertible debt and future financing activities may cause dilution of existing security holders interests in the Company and may cause the price of our common stock to go down. We are limited in our ability to raise additional capital. We have made loans to certain of our directors, which if not repaid, would result in a loss to the Company. Because our vaccine product development efforts depend on new and rapidly evolving technologies, we cannot be certain that our efforts will be successful. We have not completed the development of vaccine products other than Estrasorb and we may not succeed in obtaining the FDA approval necessary to sell additional products. We must identify products and product candidates for development with our VLP technology and establish successful third-party relationships. Because we depend on third parties to conduct some of our laboratory testing and human studies, we may encounter delays in or lose some control over our efforts to develop products. Our collaboration agreements may prohibit us from conducting research in areas that may compete with our collaboration products, while our collaborators may not be limited to the same extent. This could negatively affect our ability to develop products and, ultimately, prevent us from achieving a continuing source of revenues. Our relationship with GE Healthcare may not be profitable. Even though we have received governmental support in the past, we may not continue to receive support at the same level or at all. If we are unable to manufacture our vaccines in sufficient quantities or are unable to obtain regulatory approvals for a manufacturing facility for our vaccines, we may experience delays in product development and clinical trials. We rely on a limited number of suppliers for some of our manufacturing materials. Any problems experienced by any of these suppliers could negatively affect our operations. We have limited marketing capabilities, and if we are unable to enter into collaborations with marketing partners or develop our own sales and marketing capability, we may not be successful in commercializing any approved products. If reforms in the health care industry make reimbursement for our potential products less likely, the market for our potential products will be reduced, and we could lose potential sources of revenue. RISKS REGARDING ESTRASORB AND OUR MNP TECHNOLOGY Our costs related to manufacturing Estrasorb may exceed our estimates and reduce expected cash flow from the sale of the Estrasorb related assets. Efforts to sell other MNP technology We may fail to obtain regulatory approval for our products on a timely basis or comply with our continuing regulatory obligations after approval is obtained. Because we are subject to environmental, health and safety laws, we may be unable to conduct our business in the most advantageous manner. Our success depends on our ability to maintain the proprietary nature of our technology. If we infringe or are alleged to infringe intellectual property rights of third parties, it will adversely affect our business, financial condition and results of operations. We may become involved in lawsuits to protect or enforce our patents or the patents of our collaborators or licensors, which could be expensive and time consuming. We may need to license intellectual property from third parties and if our right to use the intellectual property we license is affected, our ability to develop and commercialize our product candidates may be harmed. If patent laws or the interpretation of patent laws change, our competitors may be able to develop and commercialize our discoveries. RISKS RELATED TO OUR COMMON STOCK AND ORGANIZATIONAL STRUCTURE Because our stock price has been and will likely continue to be volatile, the market price of our common stock may be lower or more volatile than expected. We have never paid dividends on our capital stock, and we do not anticipate paying any such dividends in the foreseeable future. Provisions of our Certificate of Incorporation and By-laws, Delaware law, and our Shareholder Rights Plan could delay or prevent the acquisition of the Company, even if such acquisition would be beneficial to stockholders, and could impede changes in our Board.

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1000694--3/17/2008--NOVAVAX_INC