NOVAVAX INC is a specialty biopharmaceutical company engaged in the research development and commercialization of proprietary products focused on women\'s health and infectious diseases. Their technology platforms involve the use of proprietary microscopic organized non-phospholipid structures as vehicles for the delivery of a wide variety of drugs and other therapeutic products including certain hormones anti-bacterial and anti-viral products and vaccine adjuvants. Novavax Inc. has a market cap of $426.5 million; its shares were traded at around $4.93 with and P/S ratio of 400.9. Novavax Inc. had an annual average earning growth of 2.1% over the past 10 years. Highlight of Business Operations: As of June 30, 2009, we had $5.0 million of senior convertible notes outstanding (the Notes). The Notes carried a 4.75% coupon; were convertible into shares of Novavax common stock at $4.00 per share; and matured on July 15, 2009. On July 15, 2009, we repaid the remaining $5.0 million balance of its convertible notes. Under the terms of the Notes, we elected to pay the remaining balance of the principal plus accrued and unpaid interest for approximately $2.6 million in cash and issued 1,016,939 shares of common stock representing the remaining $2.6 million of the principal plus accrued and unpaid interest due by dividing that principal amount by $2.5163.
Also on March 31, 2009, we entered into a binding, non-cancellable Stock Purchase Agreement (the SPA) with Satellite Overseas (Holdings) Limited (SOHL), a subsidiary of Cadila, pursuant to which SOHL has agreed to purchase 12.5 million shares of our common stock, par value $0.01 at the market price of $0.88 per share. We delivered the shares of common stock on April 1, 2009. We raised gross proceeds of $11 million in the offering. The net proceeds to us from the sale of the common stock, after deducting estimated offering expenses payable by us, is approximately $10.7 million.
On July 5, 2007, we entered into a License Agreement with Wyeth Holdings Corporation, a subsidiary of Wyeth (Wyeth). The license is a non-exclusive, worldwide license to a family of patent applications covering VLP technology for use in human vaccines in certain fields of use. The agreement provides for an upfront payment, annual license fees, milestone payments and royalties on any product sales. If each milestone is achieved for any particular product candidate, we would be obligated to pay an aggregate of $14 million to Wyeth Holdings for each product candidate developed and commercialized under the agreement. Achievement of each milestone is subject to many risks, including those described in our Item IA of Part I of our annual report on Form 10-K for the year ended December 31, 2008. Annual license maintenance fees under the Wyeth Holdings agreement aggregate $0.3 million per year. The royalty to be paid by us under the agreement, if a product is approved by the FDA for commercialization, will be based on single digit percentage of net sales. Payments under the agreement to Wyeth as of June 30, 2009 aggregated $4.8 million and could aggregate up to an additional $0.3 million in 2009, depending on the achievement of clinical development milestones. The agreement will remain effective (i) as long as there is at least one claim of the licensed patent rights cover the manufacture, sale or use of any product, (ii) unless Novavax has not terminated the agreement at its option or, (iii) Wyeth has not terminated the agreement for an uncured breach by Novavax.
The Amendment restates the entire amount outstanding as of December 31, 2007, including accrued interest, or $578,848, as the new outstanding principal amount. Furthermore, the Amendment extends the maturity date of the note to June 30, 2009, permits us to sell the pledged shares if the market price of the common stock as reported on NASDAQ Global Market exceeds certain targets, increases the interest rate to 8.0% and stipulates quarterly payments beginning June 30, 2008. We received the first payment of $50,000 in July 2008 for the first half of 2008 and a second payment of $5,000 in October 2008, with a balance for the next payment due by December 31, 2008 or $45,000. In January 2009, we received an additional payment of $10,000. This note is currently in default.
Research and development costs decreased from $5.4 million for the three months ended June 30, 2008 to $5.3 million for the three months ended June 30, 2009, a decrease of $0.1 million, or 2%. Our research and development costs are incurred in support of the development of VLP based vaccines. The decrease can be attributed to a $0.2 million decrease in employee costs from 2008 to 2009. This decrease is partially offset by a $0.1 million increase in outside testing costs associated with the continuing preclinical testing, human clinical trials, process development, manufacturing and quality-related programs.
General and administrative costs were $2.6 million for the three months ended June 30, 2009 compared to $3.2 million for the three months ended June 30, 2008. The decrease of $0.6 million, or 19%, was primarily due to decrease in employee related expenses of $0.2 million, and a decrease of $0.1 million in our facility costs associated with general and administrative functions.
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