Shown in this photo is a vial labeled “Novavax V Covid-19 Vaccine” taken on January 16, 2022.
Dado Rovik | Reuters
shares Novavax Wall Street closed nearly 50% higher on Monday as Wall Street cheered the company's new multibillion-dollar deal with the French pharmaceutical company. Sanofi That sparked a dramatic turnaround for the struggling vaccine maker.
Novavax stock nearly doubled on Friday after it announced the licensing agreement with Sanofi. Novavax said on Friday that the deal allows the company to remove the “continuation” warning it first issued in February 2023 due to significant doubts about its ability to stay afloat.
“It really helps our business. It keeps us well capitalized, eliminates constant attention, and gives us the opportunity to further pivot our strategy toward what we're best at — to create additional value for all our stakeholders, including our shareholders,” Novavax CEO said. John Jacobs to CNBC in an interview.
Under the agreement, Sanofi will acquire a stake of less than 5% in Novavax. The deal also gives Novavax the right to receive an upfront cash payment of $500 million and future payments contingent on certain milestones, in addition to royalties.
Sanofi, one of the world's largest vaccine manufacturers, will co-market Novavax's Covid vaccine in most countries starting in 2025. The deal also allows Sanofi to use Novavax's Covid vaccine and its leading vaccine technology, Matrix-M, to develop new vaccine products. The doses include combination shots targeting Covid and influenza.
A logo on Sanofi's exhibition space at the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France, on June 15, 2022.
Benoit Tessier | Reuters
In a note on Sunday, Jefferies analyst Roger Song said the deal would provide significant capital to Novavax and support the company's growth.
“Economically, the deal is very profitable and impactful,” Song wrote.
He said the upfront payment helps remove investor anxiety about Novavax's business continuity warning, and that the significant payments are “large and relatively short-term” for the company since they are not tied to sales. Meanwhile, Song said the proceeds will provide a steady revenue stream every year.
He added that the deal “validates” the company's protein-based vaccine platform.
The Novavax vaccine is the first Covid vaccine to use protein technology, a decades-old method of fighting viruses used in routine shots against hepatitis B and shingles. Health officials view the vaccine as a valuable alternative for people who do not want to take mRNA vaccines from themselves Pfizer And Moderna.
In a note Sunday, David Reisinger, an analyst at Leerink Partners, said he was interested in seeing how effective Sanofi was in raising consumer awareness about how easily patients would tolerate side effects of Novavax's Covid vaccine compared to competing shots from Pfizer and Moderna.
Consumer hesitation about Covid boosters came in part because of concerns about fatigue and discomfort associated with the Pfizer and Moderna vaccines, Reisinger noted.
The company expects Sanofi “to achieve greater commercial success with the (Novavax) vaccine starting in 2025, given its commercial scale and contracting capabilities, but the magnitude of the impact is difficult to predict,” Reisinger wrote.
He added that there could be “more upside” for Sanofi and Novavax if they develop a combined coronavirus and influenza vaccine that has advantages over the mRNA vaccines developed by Pfizer and Moderna.
