Novavax soars on $1.2 Billion Covid-19 c licensing deal 

In a historic move, shares of Novavax, Inc. surge to new heights after a key partnership is forged with Sanofi, a renowned French pharmaceutical company. This deal is estimated at $1. With about $ 2 billion at its core, the initiative is aimed at distributing a combined vaccine against the Covid- 19 and flu. 

The Licensing Agreement

Novavax will be receiving $500 million as the initial payment and an additional $700 million as a contingency, which depends on meeting the various development, regulatory, and launch milestones. Sanofi not only gives the partnership finance, but also acquires a minority equity stake of about 5%, which ensures their full support for the venture. 

Sanofi will lead the way to selling Novavax’s COVID-19 vaccine globally except in India, Japan, and South Korea, where Novavax is supposed to have direct purchase agreements. Sanofi has an exclusive right to develop a trivalent vaccine in which Novavax’s protein-based Covid-19 shot is combined with the flu vaccine pioneered by Sanofi, thereby providing the patients a more convenient way to stay protected from two dangerous respiratory diseases. 

Sanofi also acquired a non-commercial license to utilize Novavax’s Matrix-M immunogen in other vaccine projects. 

Strategic Implications

Sanofi and Novavax experienced rejections during the pandemic when they failed to take part in the first round to launch the Covid-19 vaccines. Agility mRNA players like Pfizer-BioNTech and Moderna had ruled the market. 

The Strategic partnership between Sanofi and Novavax is a wise decision. Moderna and Pfizer are currently studying mRNA-based combination vaccines against flu, while Sanofi non-mRNA flu products could represent an alternative approach.

This deal presents Novavax with a timely opportunity to avail itself, which was a challenging year for it that involved issuing a going concern warning regarding its perpetuity. Through the license agreement, the company is granted a new lease of life. 

Key Highlights 

1. Agreement Details
   • Licensing Agreement: Novavax and Sanofi signed a license agreement. 
   • Combined Vaccine: The agreement provides for the production of a combined Covid-19 influenza vaccine. 
   • Upfront Payments: Novavax will be issued an upfront payment of $500 million. 
   • Milestone Payments: Similarly, Novavax may receive up to $700 million based on the success of the development, regulatory, as well as launch milestones. 
   • Equity Stake: Sanofi would also buy about 5% equity in Novavax. 
2. Global Sales Rights

Sanofi will have the rights to distribute worldwide, outside India, Japan, and South Korea where Novavax already has its advance purchase agreements.

3. Combination with Flu Shot

Sanofi is the only one who can apply Novavax receptor binding domain with its influenza vaccine. This dual feature is aimed at giving patients the “extra luxury and the protection against two major respiratory viruses”. 

4. Matrix-M Adjuvant

Sanofi will additionally have a non-exclusive license to apply Novavax’s adjuvant Matrix-M in other vaccine products. 

5. Stock Surge

The shares in Novavax skyrocketed with as much as 217% during the premarket trading representing the largest surge in their history. 

6. Strategic Move

Although the deal seems out of trend for Sanofi, it is a strategic measure. Sanofi argues that providing a non-mRNA-based combination vaccine as an alternate option may be wise. This may be so considering the success of mRNA-based vaccines developed by Moderna and Pfizer, respectively. 

Conclusion

Novavax-Sanofi collaboration is the merging together of competences, resources, and ingenuity. Given the ongoing global health crises, the initiative has great prospects of creating new vaccine technologies, and thus protecting the populations across the world from infectious diseases. The stock of Novavax boomed upon the announcement of the partnership as an indication of the market’s approval of the deal. The brightest of the future for vaccine development just dawned upon us. 

Image Source: bloomberg