A vial labeled “Novavax V Covid-19 Vaccine” is shown in this Jan. 16, 2022, photo.
Ruvic cube | Reuters
Shares of Novavax closed nearly 50% higher on Monday as Wall Street cheered the company’s new multibillion-dollar deal with the French drugmaker Sanofi That triggered a dramatic turnaround for the struggling vaccine maker.
Novavax shares nearly doubled on Friday after the company announced its licensing agreement with Sanofi. Novavax said Friday the deal allows the company to lift its “going concern” warning, which it first issued in February 2023 amid deep doubts about its ability to stay afloat.
“It really helps our business. It ensures that we are well capitalized, it takes pressure off the company’s inventory and gives us the opportunity to focus our strategy more closely on what we do best – delivering value to all our stakeholders. “Our shareholders,” said John Jacobs, CEO of Novavax, in an interview with CNBC.
Under the agreement, Sanofi will acquire a stake of less than 5% in Novavax. The deal also entitles Novavax to an upfront payment of $500 million and future payments subject to certain milestones, as well as royalties.
Sanofi, one of the world’s largest vaccine makers, will co-market Novavax’s Covid vaccine in most countries starting in 2025. The deal also allows Sanofi to use Novavax’s Covid shot and flagship vaccine technology, the Matrix-M adjuvant, to develop new vaccine products. The recordings include Combination vaccinations against Covid and the flu.
A logo on the Sanofi exhibition space at the Viva Technology conference on innovation and startups at the Porte de Versailles exhibition center in Paris, France, on June 15, 2022.
Benoit Tessier | Reuters
In a note Sunday, Jefferies analyst Roger Song said the deal will provide Novavax with significant capital and support the company’s growth.
“Economically speaking, the deal is extremely lucrative and impactful,” Song wrote.
He said the upfront payment helps allay investor concerns about Novavax’s going concern warning and that milestone payments are “significant and relatively short-term” for the company because they are not tied to sales. In the meantime, the royalties would provide a steady source of income every year, Song said.
He added that the deal “validates” the company’s protein-based vaccine platform.
Novavax’s shot is the first Covid vaccine to use protein technology, a decades-old method of fighting viruses that is used in routine vaccinations against hepatitis B and shingles. Health officials view the vaccine as a valuable alternative for people who don’t want to receive messenger RNA shots Pfizer And Modern.
In a note Sunday, Leerink Partners analyst David Risinger said he was interested in seeing how effective Sanofi is in raising consumer awareness about the side effects of Novavax’s Covid vaccine for patients compared to competing shots from Pfizer and Moderna are easier to tolerate.
Risinger noted that consumer reluctance toward Covid boosters is due in part to fears about the fatigue and discomfort that come with the Pfizer and Moderna vaccinations.
The company expects Sanofi to “increase commercial success.” [Novavax’s] “Due to commercial scale and contractual capability, a vaccine will be available starting in 2025, but it is difficult to predict the magnitude of the impact,” Risinger wrote.
He added that there could be “further upside” for Sanofi and Novavax if they develop a combination Covid and flu vaccine that offers advantages over the mRNA combination shots developed by Pfizer and Moderna.
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2024-05-13 21:46:34
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