Novavax signs Covid-19 license deal with Sanofi, removes doubt about business viability

Novavax today (10 May) erased doubts about its ability to remain in business and struck a licensing deal worth up to $1.2 billion with Sanofi, for Covid-19 vaccines in exchange for a stake that doubles the US drugmaker's market value.

In February last year, Novavax raised doubts about its business viability after missing out on the Covid-19 vaccine windfall due to manufacturing issues that delayed filing for regulatory approval. Its Covid shot got US approval in July 2022, long after Pfizer and Moderna were in use.

Novavax said it would co-commercialise its Covid-19 vaccine with French drugmaker Sanofi and develop new Covid-19-influenza combination vaccines using Novavax's Matrix-M adjuvant.

Sanofi will pay Novavax $500 million upfront and up to $700 million in development, regulatory and launch milestones, the companies said. Novavax will also get double-digit percentage royalty payments on sales of its Covid-19 and flu-Covid-19 combination vaccines.

Sanofi will take a 4.9% stake in the US drugmaker for $70 million. That values Novavax at about $1.4 billion, nearly double its market capitalisation of about $628 million as of Thursday but a far cry from its peak of $20 billion in 2021.

"We're excited by the prospect of combining Novavax's adjuvanted Covid-19 vaccine that has shown high efficacy and favourable tolerability, with our rich portfolio of differentiated flu vaccines (...)", Sanofi's head of vaccines R&D, Jean-Francois Toussaint, said in a statement.

Novavax also reported that its net loss narrowed to $148 million in the first quarter from $294 million in the year-ago period.

Its revenue rose to $94 million from $81 million and the company said it expects full-year revenue of $400 million to $600 million.

Novavax also said plans to reduce 2025 research and development expenses to below $500 million, a portion of which it expects to recover from Sanofi under their deal.