(Bloomberg) — After the company signed a $1.2 billion licensing agreement with Sanofi, Novavax Inc. The stakes soared, including the commercialization of a combined Covid-19 and flu shot.
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Novavax will receive a $500 million upfront payment and an additional $700 million if all development, regulatory and launch milestones are met, according to a statement Friday. Novavax, which will receive tiered royalties on any vaccine sales, said Sanofi would take a 5% minority stake in the US company.
Shares of Novavax jumped as much as 146% in early trading in New York, and the stock is on track for its biggest one-day gain. The stock traded at $10.02 on Friday, though it's still close to an early 2021 high of $320.
The deal brings together two big players in the vaccine world, both of which missed the rush to quickly develop and commercialize Covid shots during the pandemic. Amid various setbacks, Sanofi and Novavax have paid tens of billions of dollars in sales to faster messenger-RNA developers, including the Pfizer-BioEntech alliance and Moderna Inc.
Sanofi will have the rights to sell Novavax's Covid-19 shots globally starting next year, except for India, Japan and South Korea, where Novavax already has advance purchase agreements. The French drugmaker has the sole license to use Novavax's protein-based Covid shot alongside its flu shot, which it said would offer patients « improved comfort and protection against two serious respiratory viruses ».
Sanofi will have a non-exclusive license to use Novavax's Matrix-M adjuvant in other vaccine products. Novavax still has the right to develop the Covid-flu vaccine at its own expense.
Shares of Sanofi rose slightly in early Paris trading. Shares had fallen about 5% over the past 12 months through Thursday's close.
The deal is a boost for Novavax, which is trying to restructure its business after a difficult 2023. Novavax reported a net loss of $148 million in the first quarter, compared with a loss of $294 million a year earlier.
At first glance the deal looks surprising for Sanofi but it could be a strategic move, said Bloomberg Research analyst Mila Pankovskaya.
« Both Moderna and Pfizer are evaluating mRNA-based combination vaccines, and while Sanofi believes its non-mRNA flu product will not be improved, the possibility of offering an alternative non-mRNA combination seems like a prudent move, » she said.
(Updates with shares.)
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