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Novavax’s stock surged nearly 100% on Friday from its previous closing price of $4.47 per share.
The agreement with Sanofi is set to remove Novavax’s “going concern” warning, which was first issued in February 2023 due to concerns about the company’s ongoing operations, according to Novavax CEO John Jacobs in an interview with CNBC.
This partnership signifies a turning point for Novavax, a struggling vaccine manufacturer known for its protein-based Covid vaccine. Health authorities see Novavax’s vaccine as a viable option for individuals hesitant to take mRNA vaccines from Pfizer and Moderna.
As part of the agreement, Sanofi gains access to Novavax’s Covid vaccine and flagship vaccine technology, Matrix-M adjuvant, to develop new vaccine offerings. Sanofi will provide an initial payment of $500 million to Novavax and potential payments of up to $700 million for developmental milestones, regulatory requirements, and product launches.
Novavax is also entitled to royalties from Sanofi’s sales of its Covid vaccine and combination vaccines for Covid and the flu. Additionally, Novavax stands to receive additional payments of up to $200 million per product in launch and sales milestones, along with ongoing royalties, for each product developed by Sanofi using the Matrix-M adjuvant.
As part of the deal, Sanofi will acquire a stake of less than 5% in Novavax.
Jacobs expressed optimism about the deal’s impact on Novavax, stating that it bolsters the company’s finances, eliminates the “going concern” warning, and allows a strategic pivot to focus on maximizing value for all stakeholders, including shareholders.
Furthermore, Jacobs highlighted how this collaboration aligns with Novavax’s mission of enhancing global public health through its vaccine technology platform on a larger scale and at a faster pace than would have been possible independently due to resource constraints.
Novavax shares spike on Sanofi deal.
Deal terms
Jacobs noted that Sanofi, being a major pharmaceutical player, has the potential to expand the market reach and availability of Novavax’s Covid vaccine, enhancing access for patients.
The collaboration permits Sanofi to create new products that combine its flu vaccine or other internally developed vaccines with Novavax’s Covid vaccine. Sanofi can also leverage Novavax’s Matrix-M adjuvant in developing innovative vaccine solutions.
Significantly, Sanofi will independently handle the development and commercialization of any combination vaccine incorporating its flu vaccine and Novavax’s Covid vaccine.
“Through this partnership with a global leader like Sanofi, not just in commercialization but also in R&D, we strongly believe that it significantly boosts our capacity to introduce multiple new vaccines much more swiftly,” remarked Jacobs.
Apart from this alliance, Novavax anticipates commencing a late-stage trial for its combination vaccine addressing Covid and the flu, as well as its standalone flu vaccine later this year. Previously, Novavax had planned for the trial to only involve the combination vaccine.
“Our upcoming phase three trial, slated to begin in the latter half of this year, will not only evaluate one potential licensable vaccine upon success but two,” Jacobs stated, indicating that the deal optimizes expenses and broadens the company’s internal pipeline.
