Gaithersburg, Maryland-based Novavax has signed a $1.2 billion licensing agreement with French drugmaker Sanofi to co-commercialize its combination COVID and influenza vaccine.
Novavax stock more than doubled after the announcement.
It puts Novavax on solid footing, after restructurings last year that led to massive job cuts and cost reductions that cut its operating expenses in half last year.
Under terms of the Sanofi agreement, Sanofi also receives a license to commercialize Novavax’s current stand-alone, protein-based COVID vaccine.
“Today we announce the beginning of an exciting new chapter for Novavax with the launch of a strategically important partnership with one of the world’s leading vaccine companies. We believe the combined strength of Novavax and Sanofi will enable us to better fulfill our mission of developing and improving access to life-saving vaccines,” said John C. Jacobs, President and Chief Executive Officer of Novavax.
Novavax will receive an upfront payment of $500 million, and another $700 million if certain development and launch milestones are met. It will also receive royalties on vaccine sales. Sanofi is taking a 5% stake in Novavax as part of the agreement.
The Novavax combination COVID and influenza vaccine is currently in late-stage clinical trials, and could receive regulatory approval as early as 2026.
The Novavax COVID vaccine differs from those made by Pfizer and Moderna, whose vaccines use mRNA technology. However, it was late to market with its vaccine during the early days of the pandemic, with FDA approval slow to come. The FDA gave emergency use authorization to its vaccine in July of 2022, almost a full year after Pfizer and Moderna vaccines were approved.
Novavax promotes its protein-based COVID vaccine as a viable alternative for those who don’t want the mRNA versions. It is also more shelf-stable.
Novavax reported a first quarter net loss of $148 million, compared to a net loss of $294 million in the same quarter a year earlier. The company’s first quarter revenue was $94 million ,compared to $81 million a year earlier. The company also severely reduced its research and development expenses, to $93 million last quarter, compared to $247 million in the first quarter of 2023.