Novavax shares nearly double on Sanofi deal to commercialize Covid vaccine, develop combination shots

Novavax
on
Friday
said
it
has
signed
a

multibillion-dollar
deal
with
French
drugmaker


Sanofi
to
co-commercialize
the
company’s
Covid
vaccine
starting
next
year
and
develop
combination
shots
targeting
the
coronavirus
and
the
flu,
among
other
efforts. 

Shares
of
Novavax
closed
nearly
100%
higher
on
Friday
from
their
previous
day
close
of
$4.47
apiece.

The
licensing
agreement
will
allow
Novavax
to
lift
its “going
concern”
warning,
which
it
first

issued
in
February
2023
due
to
having
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
view
the
vaccine
as
a
valuable
alternative
for
people
who
don’t
want
to
take
messenger
RNA
jabs
from


Pfizer
and


Moderna. 

Part
of
the
deal
allows
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
payment
of
$500
million
and
up
to
$700
million
in
payments
for
development,
regulatory
and
launch
milestones.

Novavax
is
also
entitled
to
royalty
payments
on
Sanofi’s
sales
of
its
Covid
vaccine
and
combination
shots
targeting
coronavirus
and
the
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
less
than
5%
stake
in
Novavax. 

“It
really
does
help
our
business.
It
keeps
us
well
capitalized,
it
takes
the
going
concern
off,
it
gives
us
the
chance
to
pivot
our
strategy
more
towards
what
we’re
best
at
—
to
bring
additional
value
to
all
of
our
stakeholders,
including
our
shareholders,”
Jacobs
told
CNBC. 

The
deal
also
will
help
the
company
fulfill
its
mission
of
improving
global
public
health
with
its
vaccine
technology
platform “at
a
pace
and
a
scale
that
we
could
have
never
done
if
we
kept
it
all
to
ourselves”
due
to
a
lack
of
resources,
capital
and
scope,
Jacobs
said. 

Novavax
will
lead
the
commercialization
of
its
Covid
shot
for
the
rest
of
this
year
and
will
transfer
most
of
that
responsibility
to
Sanofi
in
2025.
Sanofi
won’t
oversee
commercialization
in
countries
that
Novavax
has
existing
partnership
agreements
with,
including
India,
Japan
and
South
Korea,
along
with
nations
with
advanced
Covid
vaccine
purchase
agreements
with
the
company.

Jacobs
said
Sanofi,
as
a
large
pharmaceutical
company,
could
increase
the
market
share
and
presence
of
Novavax’s
Covid
vaccine,
which
will
broaden
patient
access
to
the
shot. 

The
deal
also
allows
Sanofi
to
develop
products
that
combine
its
flu
shot
or
other
in-house
vaccines
with
Novavax’s
Covid
jab.
Sanofi
can
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
its
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
that
this
multiplies
immensely
the
opportunity
to
bring
forth
multiple
new
vaccines
much
more
quickly,”
Jacobs
said. 

Outside
of
the
deal,
Novavax
expects
to
start
a
late-stage
trial
on
its
own
combination
vaccine
targeting
Covid
and
the
flu
and
its
stand-alone
flu
shot
later
this
year.
Previously,
Novavax
said
that
trial
would
only
include
the
combination
vaccine. 

“Now
our
phase
three
trial,
that
we’re
on
track
to
initiate
in
the
second
half
of
this
year,
won’t
just
have
one
potential
licensable
vaccine
should
we
succeed,
but
it
will
have
two,”
Jacob
said,
noting
the
deal “frees
up
costs”
and “opens
up
our
own
organic
pipeline.”