Novavax Inc. (NASDAQ:NVAX) experienced a substantial surge in its stock price after finalizing a $1.2 billion licensing deal with Sanofi (NASDAQ:SNY). This agreement involves the development and commercialization of a combined Covid-19 and flu vaccine, marking a significant collaboration between two major players in the vaccine industry.
Under the terms of the agreement, Novavax will receive $500 million upfront and an additional $700 million contingent upon meeting certain development, regulatory, and launch milestones. The deal also includes tiered royalties from vaccine sales, with Sanofi acquiring a minority equity stake of about 5% in Novavax.
Following the announcement, Novavax shares soared by as much as 146% in early trading in New York, positioning the stock for its largest single-day gain ever, despite still being far below its early 2021 high of approximately $320.
This strategic partnership positions Sanofi to spearhead global sales of Novavax’s Covid-19 vaccine starting next year, with exclusions in India, Japan, and South Korea where Novavax has pre-existing agreements. Additionally, Sanofi gains exclusive rights to combine Novavax’s protein-based Covid vaccine with its flu vaccine, providing dual protection against serious respiratory viruses.
Moreover, Sanofi will hold a non-exclusive license to utilize Novavax’s Matrix-M adjuvant in other vaccine formulations, while Novavax retains the ability to develop its own Covid-flu combined vaccine independently.
Sanofi’s shares also experienced a slight increase in early trading on the Paris stock exchange, even though its stock has declined by about 5% over the past year.
This deal is particularly vital for Novavax, which is currently restructuring its operations following a challenging 2023, marked by a financial warning about its future viability. The company reported a net loss of $148 million for the first quarter, showing improvement from a $294 million loss the previous year.
Featured Image: Freepik
