Novavax to almost double stake in Sanofi deal to commercialize Covid vaccine and develop combination shots

Novavax on Friday he announced that he had signed a a multi-billion dollar deal with a French drug manufacturer Sanofi to jointly commercialize the company’s Covid vaccine from next year and develop combination vaccines targeted, among others, for coronavirus and flu.

Novavax shares closed Friday up almost 100% from the previous day’s close at $4.47 apiece.

The licensing agreement will enable Novavax to lift its going concern warning, which it will do first released in February 2023 due to doubts about its ability to continue as a going concern, Novavax CEO John Jacobs said in an interview with CNBC.

This marks a turning point for the struggling vaccine maker and its protein-based Covid vaccine. Health officials consider the vaccine a valuable alternative for people who do not want to receive messenger RNA injections Pfizer AND Up-to-date.

Part of the deal allows Sanofi to exploit Novavax’s Covid vaccine and flagship technology, Matrix-M adjuvantto develop fresh vaccine products. Sanofi will pay Novavax an upfront payment of $500 million and up to $700 million in milestone payments for development, regulatory and commercialization.

Novavax is also entitled to royalties on Sanofi’s sales of the Covid vaccine and coronavirus-flu combination shots. Novavax will also receive additional launch and sales milestone payments of up to $200 million plus royalties for each product developed by Sanofi with the Matrix-M adjuvant.

Under the agreement, Sanofi will also acquire less than 5% of shares in Novavax.

“It really helps our company. “It keeps us well capitalized, it gives us a break from continuing operations, it gives us the opportunity to direct our strategy towards what we do best — to deliver additional value to all of our stakeholders, including our shareholders,” Jacobs told CNBC.

The deal will also assist the company fulfill its mission to improve global public health with its vaccine technology platform “at a pace and scale that we would never have achieved 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 vaccine for the rest of this year and will transfer most of that responsibility to Sanofi in 2025. Sanofi will not oversee commercialization in countries with which Novavax has existing partnerships, which include India, Japan and South Korea, along with countries that have signed advanced contracts with the company to purchase Covid vaccines.

Jacobs said Sanofi, as a gigantic pharmaceutical company, could escalate market share and presence of Novavax’s Covid vaccine, which would expand patient access to the vaccine.

The deal also allows Sanofi to develop products combining the flu vaccine or other in-house vaccines with Novavax’s Covid vaccine. Sanofi may also exploit Novavax’s Matrix-M adjuvant to develop fresh vaccine products.

Specifically, Sanofi will have sole responsibility for the development and commercialization of any combination injection of Novavax’s influenza vaccine and Covid vaccine.

“By having an agreement with a global leader like Sanofi, we believe that not only in terms of commercialization, but also in terms of development, it greatly multiplies the opportunity to develop many fresh vaccines much more quickly,” Jacobs said.

In addition to the deal, Novavax expects to begin late-stage studies of its own Covid-19 and flu combination vaccine and a standalone flu vaccine later this year. Previously, Novavax assured that the study would only include the combination vaccine.

“Now our phase three trial, which we are on track to start in the second half of this year, will not only have one potential vaccine subject to licensing if we are successful, but will have two,” Jacob said, noting the deal “frees up costs.” and “opens our own organic pipeline.”