A healthcare worker prepares a dose of the Novavax vaccine as the Netherlands Health Services Agency begins the Novavax vaccination program on March 21, 2022 in The Hague, Netherlands.
Patrick Van Katwijk | Getty Images
Novavax on friday he said he signed a multi-billion dollar deal with a French pharmacist Sanofi to co-commercialize the company’s Covid vaccine starting next year and to develop combination vaccines targeting coronavirus and influenza, among other efforts.
The licensing agreement will allow Novavax to lift the “continuing concern” warning, which it first was issued in February 2023 because it had doubts about its ability to continue operating, Novavax CEO John Jacobs said in an interview with CNBC.
It marks a turning point for the embattled vaccine maker and its protein-based Covid vaccine. Health officials view the vaccine as a valuable alternative for people who do not want to receive messenger RNA vaccines from Pfizer and Modern.
Part of the deal allows Sanofi to use Novavax’s flagship Covid vaccine technology, Matrix-M amplifier, for the development of new vaccine products. Sanofi will pay Novavax $500 million upfront and up to $700 million in development, regulatory and launch milestone payments.
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 vaccines targeting the coronavirus and influenza. Novavax will also receive additional launch and sales milestone payments of up to $200 million, along with royalties, for each product Sanofi develops with the Matrix-M adjuvant.
Under the deal, Sanofi will also take a less than 5% stake in Novavax.
“It really helps our business. It keeps us well capitalized, it takes away the ongoing business, it gives us the opportunity to shift our strategy more towards what we are best at – delivering additional value to all our stakeholders, including our shareholders” , Jacobs told CNBC.
The deal will also help the company fulfill its mission to improve global public health with its vaccine technology platform “at a pace and scale that we could never do if we kept it all to ourselves” due to a lack of resources, of funds and funds and range, Jacobs said.
Terms of agreement
Novavax will lead the commercialization of the Covid shot for the rest of the year and will transfer most of that responsibility to Sanofi in 2025. Sanofi will not oversee commercialization in countries with which Novavax has existing collaboration agreements, such as 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 would expand patient access to the vaccine.
The deal also allows Sanofi to develop products that combine the flu vaccine or other in-house vaccines with Novavax’s Covid vaccine. Sanofi may also use Novavax’s Matrix-M adjuvant to develop new vaccine products.
Specifically, Sanofi will be solely responsible for the development and commercialization of any combination vaccine containing Novavax’s influenza vaccine and Covid vaccine.
“Through this agreement with a world leader like Sanofi, not only in commercialization but also in development, we believe this greatly multiplies the opportunity to create multiple new vaccines much more quickly,” Jacobs said.
Apart from the deal, Novavax expects to start a late-stage trial of its own combination vaccine targeting Covid and flu and stand-alone flu vaccination later this year. Previously, Novavax said the trial would only include the combination vaccine.
“Now our phase three trial, which we’re on track to start in the second half of this year, will not only have one potential licensed vaccine if we’re successful, but will have two,” Jacobs said, noting the deal “frees up costs” and “opens up our own bio pipeline.”