A health worker prepares a dose of the Novavax vaccine as the Dutch Health Service Organization starts with the Novavax vaccination program on March 21, 2022 in The Hague, Netherlands.
Patrick Van Katwijk | Getty Images
Novavax on Friday said it has signed a multibillion-dollar deal with French drugmaker Sanofi to co-commercialize the company’s Covid vaccine starting next year and develop combination shots targeting the coronavirus and the flu, among other efforts.
The licensing agreement will allow Novavax to lift its “going concern” warning, which it first issued in February 2023 due to having “substantial doubt” about its ability to continue operating. 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 take messenger RNA jabs from Pfizer and Moderna.
Part of the deal allows Sanofi to use Novavax’s Covid shot 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 payments for development, regulatory and launch milestones.
That total is roughly double Novavax’s current market cap of $627 million.
Novavax is also entitled to royalty payments on Sanofi’s sales of its Covid vaccine and combination shots targeting coronavirus and the flu. Novavax will also receive additional launch and sales milestone payments of up to $200 million, along with royalties, for each product Sanofi develops with Matrix-M adjuvant.
Under the deal, Sanofi will also take a less than 5% stake in Novavax.
“It really does help our business. It keeps us well capitalized, it takes the going concern off, it gives us the chance to pivot our strategy more towards what we’re best at — to bring additional value to all of our stakeholders, including our shareholders,” Novavax CEO John Jacobs told CNBC in an interview.
The deal also will help the company fulfill its mission of improving global public health with its vaccine technology platform “at a pace and a scale that we could have never done if we kept it all to ourselves” due to a lack of resources, capital and scope, Jacobs said.
Deal terms
Novavax will lead the commercialization of its Covid shot for the rest of this year and will transfer most of that responsibility to Sanofi in 2025. Sanofi won’t oversee commercialization in countries that Novavax has existing partnership agreements with, including India, Japan and South Korea, along with nations with advanced Covid vaccine purchase 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 will broaden patient access to the shot.
The deal also allows Sanofi to develop products that combine its flu shot or other in-house vaccines with Novavax’s Covid jab. Sanofi can also use Novavax’s Matrix-M adjuvant to develop new vaccine products.
Notably, Sanofi will be solely responsible for the development and commercialization of any combination shot containing its flu vaccine and Novavax’s Covid shot.
“Through this agreement with a world leader like Sanofi, not only in commercialization but also in development, we believe that this multiplies immensely the opportunity to bring forth multiple new vaccines much more quickly,” Jacobs said.
Outside of the deal, Novavax expects to start a late-stage trial on its own combination vaccine targeting Covid and the flu and its stand-alone flu shot later this year. Previously, Novavax said that trial would only include the combination vaccine.
“Now our phase three trial, that we’re on track to initiate in the second half of this year, won’t just have one potential licensable vaccine should we succeed, but it will have two,” Jacob said, noting the deal “frees up costs” and “opens up our own organic pipeline.”
