Vaccine-maker Novavax announced a $1.2 billion licensing partnership with French pharmaceutical company Sanofi on Friday, giving its stock a much-needed boost.
The agreement includes a $500 million up-front payment, and as much as $700 million in development, regulatory, and launch milestones. Under the terms of the agreement, Sanofi will begin to book sales of Novavax’s COVID-19 vaccine starting in 2025, and will help fund certain of its research and development, regulatory, and commercial costs. Novavax will also receive double-digit percentage royalty payments on sales of its COVID-19 vaccines and its forthcoming combination COVID-19-influenza jabs.
The Gaithersburg, Maryland-based vaccine giant will also be entitled to receive up to $200 million from other launch and sales milestones, as well as royalties from every Sanofi vaccine product developed under a non-exclusive license for Novavax’s Matrix-M adjuvant technology.
Shares of Novavax surged 120% at market open on Friday following the announcement, trading at $9.79 per share.
The deal gives Sanofi a co-exclusive license to help commercialize Novavax’s current Adjuvanted COVID-19 vaccine in markets around the world where Novavax does not have existing agreements. Sanofi will have a sole license to Novavax’s COVID-19 vaccine for use with its own flu vaccines, as well as a non-exclusive license to use Novavax’s vaccine in combination with other vaccines. Sanofi will also receive a less than 5% equity investment in Novavax.
As part of the agreement, Novavax retains the right to continue developing its own combination COVID-19 and flu shot.
Over the past 12 months, Novavax’s stock has fallen roughly 50%. The company reported a loss of $148 million in the first quarter of 2024, compared with a net loss of $294 million in the same period last year. Companies that saw their profits surge on sales of COVID-19 vaccines during the pandemic have, in the last couple of years, seen their net income plunge.
Novavax’s Adjuvanted was the fourth vaccine to be authorized in the United States for the prevention of COVID-19 in July 2022. The jab is a protein-based vaccine, similar to those used to protect against human papillomavirus, hepatitis B and shingles, unlike the Pfizer-BioNTech and Moderna mRNA vaccines.
Activist hedge fund Shah Capital blasted the biotech giant’s leadership team last month for not leveraging people’s concerns about mRNA vaccines to boost sales of its protein-based shots.