Novavax, a struggling vaccine maker, saw its shares surge by as much as 50% following the announcement of a new multibillion-dollar deal with French drugmaker Sanofi. The deal not only caused a significant increase in Novavax’s stock price but also led to the removal of the company’s “going concern” warning, which had been issued earlier due to doubts about its financial viability.
Under the agreement, Sanofi will acquire a less than 5% stake in Novavax. Additionally, Novavax will receive an upfront cash payment of $500 million, as well as future payments based on reaching certain milestones and royalties. Sanofi will also collaborate with Novavax to co-market the latter’s Covid vaccine in most countries beginning in 2025, and leverage Novavax’s Matrix-M adjuvant technology to develop new vaccine products, including combination jabs targeting Covid and the flu.
Jefferies analyst Roger Song expressed confidence in the deal’s ability to provide significant capital to Novavax and support the company’s growth. He emphasized the economic benefits of the agreement, highlighting the removal of investor concerns about Novavax’s financial stability, the relatively near-term milestone payments, and the steady revenue stream from royalties. Song also noted that the deal validates Novavax’s protein-based vaccine platform, positioning the company as an important player in the vaccine market.
Novavax’s Covid vaccine stands out in the market as the first to utilize protein technology, a traditional method for developing virus-fighting vaccines. This approach has garnered interest from health officials as a potential alternative to mRNA vaccines from Pfizer and Moderna. Novavax’s vaccine is viewed as having easier-to-tolerate side effects for patients, making it appealing to individuals hesitant to receive other types of Covid vaccines.
Analyst David Risinger from Leerink Partners expressed curiosity about Sanofi’s ability to raise consumer awareness about the benefits of Novavax’s unique vaccine technology. The partnership between Novavax and Sanofi has the potential to revolutionize the vaccine market by providing innovative solutions that cater to a wider range of patients. As Novavax continues to develop new vaccine products with Sanofi’s support, the collaboration is poised to have a lasting impact on the healthcare industry.
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