A health worker prepares a dose of the Novavax vaccine as the Dutch Health Services Organization begins the Novavax vaccination program on March 21, 2022 in The Hague, Netherlands.
Patrick Van Katwijk | Getty Images
Novavax announced Friday that it has signed a multibillion-dollar deal with a French drugmaker Sanofi Among other things, to jointly market the company's Covid vaccine from next year and to develop combination vaccines against the coronavirus and the flu.
The licensing agreement will allow Novavax to lift its “going concern” warning, which the company first issued in February 2023 because it had doubts about its ability to continue operations, Novavax CEO John Jacobs said in an interview with CNBC.
It marks a turning point for the struggling vaccine maker and its protein-based Covid shot. Health officials view the vaccine as a valuable alternative for people who don't want to receive messenger RNA shots Pfizer And Modern.
Part of the agreement allows Sanofi to use Novavax's Covid vaccination and flagship vaccine technology Matrix-M adjuvant to develop new vaccine products. Sanofi will pay Novavax an upfront payment of $500 million and up to $700 million in development, regulatory and commercial launch milestone payments.
That sum is roughly double Novavax's current market cap of $627 million.
Novavax is also entitled to royalties on Sanofi's sales of its Covid vaccine and combination coronavirus and flu vaccines. Novavax will also receive additional launch and sales milestone payments of up to $200 million and royalties for each product Sanofi develops using the adjuvant Matrix-M.
As part of the deal, Sanofi will also take a less than 5% stake in Novavax.
“It really helps our business. It ensures that we are well capitalized, it relieves us of the going concern burden and gives us the opportunity to focus our strategy more closely on what we do best – creating value for all our stakeholders and our shareholders,” Jacobs told our shareholders CNBC.
The deal will also help the company fulfill its mission to improve global public health with its vaccine technology platform, “at a pace and scale that we could never have achieved if we had kept it all to ourselves,” because it lacks scope in resources, capital, etc., Jacobs said.
Terms of contract
Novavax will lead the commercialization of its Covid shot for the rest of this year, handing most of that responsibility to Sanofi in 2025. Sanofi will not oversee commercialization in countries with which Novavax has existing partnership agreements, including India, Japan and South Korea, along with countries with advanced Covid vaccine purchasing agreements with the company.
Jacobs said Sanofi, as a large pharmaceutical company, could increase the market share and presence of Novavax's Covid vaccine, which would expand patient access to vaccination.
The deal also allows Sanofi to develop products that combine its flu shot or other proprietary vaccines with Novavax's Covid shot. Sanofi may also use Novavax's Matrix-M adjuvant to develop new vaccine products.
Specifically, Sanofi will be solely responsible for the development and commercialization of all combination vaccines containing its flu vaccine and Novavax's Covid vaccine.
“Through this agreement with a global leader like Sanofi, not only in commercialization but also in development, we believe this greatly multiplies the opportunities to bring multiple new vaccines to market much more quickly,” Jacobs said.
Aside from the agreement, Novavax expects to begin late-stage testing of its own Covid-flu combination vaccine and its standalone flu shot later this year. Previously, Novavax said the study would only include the combination vaccine.
“Now our Phase 3 trial, which we expect to start in the second half of this year, will have not just one potentially registrable vaccine should we be successful, but two,” Jacob said, noting the deal. “relieves costs” and “opens up our own organic pipeline.”
