1000694--3/31/2009--NOVAVAX

related topics

{product, candidate, development}

{property, intellectual, protect}

{stock, price, share}

{product, liability, claim}

{acquisition, growth, future}

{regulation, government, change}

{provision, law, control}

{personnel, key, retain}

{loan, real, estate}

{condition, economic, financial}

{capital, credit, financial}

{customer, product, revenue}

{cost, regulation, environmental}

{stock, price, operating}

{competitive, industry, competition}

{loss, insurance, financial}

We have limited financial resources and we are not certain that we will be able to maintain our current level of operations or be able to fund the further development of our product candidates. Our convertible notes mature on July 15, 2009 and the use of our cash and common stock to satisfy this debt could adversely affect our cash flow, dilute stockholders, cause the price of our common stock to go down and limit our ability to raise capital. Our common stock may be delisted from The NASDAQ Global Market, which could negatively impact the price of our common stock, our ability to access the capital markets and our ability to convert our convertible debt The current capital and credit market conditions may adversely affect the company s access to capital, cost of capital, and ability to execute its business plan as scheduled We are limited in our ability to raise additional capital and any sale of common stock could be significantly dilutive to existing stockholders. A portion of our investments are auction rate securities which present potential liquidity concerns. We have repositioned ourselves from a specialty pharmaceutical company and face all the risks inherent in the implementation of a new business strategy. 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. 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. We may have product liability exposure. There are outstanding loans owed by certain of our former directors, which if not repaid, would result in a loss to the Company. We may not be able to win government, institution or non-profit grants. Current economic conditions and capital markets are in a period of disruption and instability which could adversely affect our ability to raise capital and may adversely affect our business and liquidity. Raising additional capital by issuing securities or through collaboration and licensing arrangements may cause dilution to existing stockholders or require us to relinquish rights to our technologies or product candidates. Global credit and financial market conditions could negatively impact the value of our current portfolio of cash equivalents or short-term investments and our ability to meet our financing objectives. A portion of our investments are auction rate securities which present potential liquidity concerns , 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 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 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. Our product candidates may never achieve market acceptance even if we obtain regulatory approvals. 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. 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. Even if regulatory approval is received for our product candidates, the later discovery of previously unknown problems with a product, manufacturer or facility may result in restrictions, including withdrawal of the product from the market. Failure to obtain regulatory approval in foreign jurisdictions would prevent us from marketing our products internationally. 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 the 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--3/31/2009--NOVAVAX_INC