A healthcare worker prepares a dose of the Novavax vaccine as the Dutch Health Organization begins the Novavax vaccination program in The Hague on March 21, 2022.
Patrick Van Katwijk | Getty Images
Novavax said Friday it has signed a multibillion-dollar deal with the French drugmaker Sanofi to co-commercialize the company's Covid vaccine from next year and to develop combination injections against, among other things, the coronavirus and the flu.
Shares of Novavax rose 120% in premarket trading on Friday, compared to the previous day's closing price of $4.47 each.
The licensing agreement will allow Novavax to withdraw its going concern warning, which it first issued in February 2023, due to doubts about its ability to continue operating, Novavax CEO John Jacobs told CNBC in an interview.
It marks a turning point for the struggling vaccine maker and its protein-based Covid shot. Health officials see the vaccine as a valuable alternative for people who don't want to get a messenger RNA shot Pfizer And Modern.
Part of the deal will allow Sanofi to use Novavax's Covid shot and flagship vaccine technology, Matrix-M adjuvant, to develop new vaccine products. Sanofi will pay Novavax an upfront fee of $500 million and up to $700 million in payments for development, regulatory and launch milestones.
That total is about double Novavax's current market cap of $627 million.
Novavax is also entitled to royalty payments on Sanofi's sales of its Covid vaccine and combination shots against the coronavirus and flu. Novavax will also receive additional launch and sales milestone payments of up to $200 million, along with royalties, for each product Sanofi develops with Matrix-M adjuvant.
Under the deal, Sanofi will also take a stake of less than 5% in Novavax.
“It really helps our business. It keeps us well capitalized, it takes away continuity, it gives us the opportunity to focus our strategy more on what we do best: to provide additional value to all our stakeholders, including our shareholders,” Jacobs told CNBC.
The deal will also help the company fulfill its mission of improving global public health with its vaccine technology platform “at a pace and scale we could never have achieved if we had kept it all to ourselves” due to a lack of resources, capital and scope, according to Jacobs.
Novavax shares rise after Sanofi deal.
Terms of the deal
Novavax will lead the commercialization of its Covid shot for the rest of this year and will hand over most of that responsibility to Sanofi in 2025. Sanofi will not oversee commercialization in countries with which Novavax has existing partnership agreements, including India, Japan and South Korea. , along with countries with advanced Covid vaccine purchase agreements with the company.
Jacobs said Sanofi, as a major pharmaceutical company, could increase the market share and presence of Novavax's Covid vaccine, increasing patient access to the shot.
The agreement also allows Sanofi to develop products that combine the flu shot or other domestic vaccines with Novavax's Covid shot. Sanofi may also use Novavax's Matrix-M adjuvant to develop new vaccine products.
Notably, Sanofi will be solely responsible for the development and commercialization of any combination shot containing the flu vaccine and Novavax's Covid shot.
“Through this agreement with a world leader like Sanofi, not only in commercialization but also in development, we believe this greatly increases the opportunity to bring multiple new vaccines to market much faster,” said Jacobs.
Outside of the deal, Novavax expects to start a late-stage trial of its own combination vaccine against Covid and flu and its standalone flu shot later this year. Previously, Novavax said the trial would include only the combination vaccine.
“Now our phase three trial, which we plan to start in the second half of this year, will have not just one potentially licensable vaccine if we succeed, but two,” Jacob said, pointing to the deal. frees up costs” and “opens our own biological pipeline.”