In this illustration taken on January 16, 2022, a vial labeled “Novavax V COVID-19 Vaccine” is seen.
Ruvic Dice | Reuters
Actions of Novavax jumped as much as 50% on Monday as Wall Street applauded the company's new multibillion-dollar deal with the French drugmaker sanafi That prompted a dramatic turnaround for the struggling vaccine maker.
Novavax shares nearly doubled on Friday after it announced the licensing deal with Sanofi. Novavax said Friday that the deal allows the company to remove its “going concern” warning, which it first issued in February 2023 due to major doubts about its ability to stay afloat.
“It really helps our business. It keeps us well capitalized, it eliminates the going concern, it gives us the opportunity to orient our strategy more towards what we are best at: bringing additional value to all of our stakeholders, including our shareholders,” he said Novavax CEO John Jacobs told CNBC in an interview.
Under the agreement, Sanofi will acquire a less than 5% stake in Novavax. The deal also entitles Novavax to an initial cash payment of $500 million and future payments subject to certain milestones, as well as 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 shot and its flagship vaccine technology, the Matrix-M adjuvant, to develop new vaccine products. Shots include combined hits aimed at Covid and flu.
A logo at the Sanofi 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 will provide significant capital to Novavax and support the company's growth.
“Financially, the deal is very lucrative and impactful,” Song wrote.
He said the upfront payment helps allay investor concerns about Novavax's going concern warning, and that the milestone payments are “significant and relatively short-term” for the company as they are not tied to sales. . Meanwhile, royalties will provide a steady stream of income each year, Song said.
He added that the deal “validates” the company's protein-based vaccine platform.
The Novavax shot is the first Covid vaccine to use protein technology, a decades-old method of fighting viruses used in routine injections against hepatitis B and shingles. Health officials see the vaccine as a valuable alternative for people who do not want to receive mRNA injections. Pfizer and modern.
In a note on Sunday, Leerink Partners analyst David Risinger said he is interested in seeing how effective Sanofi is in raising consumer awareness about how the side effects of Novavax's Covid vaccine are easier for patients to tolerate. compared to competing shots from Pfizer and Moderna.
Risinger noted that consumer hesitancy around Covid boosters is partly due to fears about fatigue and discomfort associated with the Pfizer and Moderna shots.
The firm hopes that Sanofi “will drive greater commercial success of [Novavax’s] vaccine starting in 2025, due to its commercial scale and contracting capacity, but it is difficult to predict the magnitude of the impact,” Risinger wrote.
He added that there could be “more advantages” for Sanofi and Novavax if they develop a combination Covid and flu vaccine that has advantages over the combination mRNA shots being developed by Pfizer and Moderna.
