Novavax signs a Covid-19 licensing agreement with Sanofi, securing the company’s viability

Novavax on Friday dispelled doubts about its ability to stay in business, striking a licensing deal worth up to $1.2 billion with Sanofi for Covid-19 vaccines in exchange for a stake that doubles the US drugmaker’s market value.

In February last year, Novavax raised doubts about the company’s viability after missing out on its Covid-19 vaccine windfall due to production issues that delayed its application for regulatory approval. The Covid shot received US approval in July 2022, long after Pfizer and Moderna were in use.

Novavax said it would commercialize its Covid-19 vaccine together with French drugmaker Sanofi and develop new Covid-19 flu combination vaccines using Novavax’s Matrix-M adjuvant.

Sanofi will pay Novavax $500 million upfront and up to $700 million in development, regulatory and launch milestones, the companies said. Novavax will also receive double-digit royalty payments on sales of its Covid-19 and flu combination vaccines.

Sanofi is taking a 4.9 percent stake in the American drug manufacturer for $70 million. That values ​​Novavax at about $1.4 billion, nearly double its market cap of about $628 million on Thursday, but far from its 2021 peak of $20 billion.

“We are excited about the prospect of combining Novavax’s adjuvanted Covid-19 vaccine, which has shown high efficacy and favorable tolerability, with our rich portfolio of differentiated influenza vaccines (…),” Sanofi’s Head of Vaccines R&D, Jean -Francois Toussaint, said a statement.

Novavax also reported that its net loss in the first quarter fell to $148 million, compared to $294 million in the same period a year ago.

Sales increased from $81 million to $94 million and the company expects full-year sales of $400 to $600 million.

Novavax also said plans to reduce research and development costs to less than $500 million by 2025, some of which it expects to get back from Sanofi under their deal.

First print: May 10, 2024 | 3:07 PM IST