A healthcare worker prepares a dose of the Novavax vaccine as the Dutch Health Services Organization begins the Novavax vaccination program on March 21, 2022 in The Hague, Netherlands.
Patricio Van Katwijk | fake images
Novavax On Thursday it said it will resolve a bitter arbitration dispute with Gavi, a global non-governmental vaccine organisation, over a canceled Covid vaccine purchase deal.
Novavax could pay up to $475 million to the organization, but the total amount may be less if Gavi decides to ask for more injections from the cash-strapped company over the next five years.
Still, the deal removes what some analysts considered one of the biggest uncertainties around the Covid vaccine maker, which is cutting costs amid questions about its ability to stay in business and plummeting demand for products. Covid around the world.
Novavax shares fell more than 50% last year and are down 17% in 2024, putting the company's market value at approximately $470 million.
In 2022, Novavax terminated a purchase agreement with Geneva-based Gavi. The company cited Gavi's failure to acquire the 350 million vaccine doses it agreed to buy in May 2021 on behalf of the COVAX Facility, a global program that aims to distribute Covid vaccines more equitably in low-income countries. income.
Gavi requested a refund for the $700 million it spent on advance payments for Novavax injections. Novavax has said those payments were non-refundable.
Under the agreement, Novavax has paid an initial $75 million to Gavi and will make deferred payments of $80 million each year through Dec. 31, 2028. Those annual payments are due in quarterly installments.
But Novavax's payments could be offset by an $80 million annual “vaccine credit” option under the deal, which Gavi can use to order any of the company's Gavi-funded shots for low- and lower-middle-income countries. .
For example, if Gavi decides to order $50 million worth of injections from Novavax in 2025, the company would only have to pay the organization $30 million that year.
Novavax said it is also offering a vaccine credit of up to $225 million that Gavi can use to order additional vaccine doses during the five-year settlement period “should there be additional demand.”
The terms of the deal could bode well for Novavax's business. Analysts had previously told CNBC that Novavax could “be in trouble” if arbitration forced it to pay the full $700 million to Gavi in 2023.
“Gavi welcomes this agreement, which allows us to maintain focus on our core programmatic objectives, including providing access to COVID-19 vaccines to vulnerable people in low-income countries,” said Gavi CEO David Marlow. in a statement on Thursday.
