Novavax, Inc. has entered into a sale of all of its assets related to Estrasorb in North America and a supply agreement for the product with Graceway Pharmaceuticals, LLCTM (Graceway).

Estrasorb is indicated for the treatment of moderate to severe vasomotor symptoms associated with menopause. Novavax will retain the rights to commercialize Estrasorb in other parts of the world.

In a separate but related transaction, Graceway has also purchased from Allergan, Inc. any tangible and intangible assets related to the product. Simultaneous with the transaction between Novavax and Graceway, Allergan has terminated all of its previously licensed rights to commercialize the product. Following the transaction, Allergan will have no continuing role with the product.

The agreements between Novavax and Graceway provide for the sale of the patent associated with the product, the sale of other intellectual properties and assets, and the sale of all production equipment related to Estrasorb. Graceway granted back to Novavax a royalty-free license to the micellar nanoparticle technology for application in certain fields unrelated to Estrasorb.

Under the supply agreement, Novavax will manufacture additional finished goods of Estrasorb with final delivery of the new inventory expected by mid-2008. Graceway will pay a preset transfer price per unit of Estrasorb for this supply of the product. Novavax will exit its Philadelphia manufacturing location upon completion of its delivery obligations to Graceway. The asset sale and ongoing production of Estrasorb will generate for Novavax only a modest profit related to this transaction in 2008. However, the transaction is expected to generate in excess of $2 million of favorable cash flow in 2008 due to non-cash charges against earnings.

Commenting on these agreements, Rahul Singhvi, president and CEO of Novavax said "Today's transaction with Graceway will generate cash for Novavax and will further focus the Company on its core vaccine business."

Novavax Inc. is committed to leading the global fight against infectious disease by creating novel, highly potent vaccines that are safer and more effective than current preventive options. Using the company's proprietary virus-like particle (VLP) and Novasome adjuvant technologies, Novavax is developing vaccines to protect against H5N1 pandemic influenza, seasonal flu and other viral diseases.