Novavax, a struggling vaccine maker, experienced a significant boost in its stock value following the announcement of a multibillion-dollar deal with French drugmaker Sanofi. The stock closed nearly 50% higher on Monday, marking a dramatic turnaround for the company that had previously issued a “going concern” warning due to doubts about its financial viability.
The licensing agreement with Sanofi includes a less than 5% stake in Novavax for the French pharmaceutical giant. Additionally, Novavax will receive an upfront cash payment of $500 million and future payments tied to specific milestones, along with royalties. Sanofi will co-market Novavax’s Covid vaccine in most countries from 2025 onwards and will have access to Novavax’s Matrix-M adjuvant technology for developing new vaccine products, including combination shots targeting Covid and the flu.
Analyst Perspectives
According to Jefferies analyst Roger Song, the deal provides significant capital to Novavax and supports the company’s growth trajectory. He emphasized the economic benefits of the agreement, noting that the upfront payment alleviates concerns about the company’s financial stability. The milestone payments are deemed substantial and achievable in the near term, while royalties will ensure a consistent revenue stream. Song also highlighted that the deal validates Novavax’s protein-based vaccine platform, positioning the company as a credible player in the vaccine market.
Novavax’s Covid vaccine, leveraging protein technology, offers an alternative to mRNA vaccines from Pfizer and Moderna. Health officials view Novavax’s vaccine as advantageous for individuals averse to mRNA jabs. Leerink Partners analyst David Risinger raised interest in Sanofi’s role in informing consumers about the more tolerable side effects of Novavax’s vaccine compared to competitors. This approach is crucial in educating the public and improving acceptance of Novavax’s product in the market.
The deal between Novavax and Sanofi signifies a pivotal moment for the vaccine market, as it strengthens Novavax’s financial position, validates its technology, and expands its market reach. The partnership with a renowned player like Sanofi opens up new opportunities for Novavax to capitalize on its innovative vaccine platform and potentially reshape the landscape of vaccine development and distribution.