Novavax Inc. has recently announced a groundbreaking $1.2 billion licensing agreement with pharmaceutical giant Sanofi, marking a significant milestone in the fight against Covid-19. The agreement includes a $500 million upfront payment to Novavax, with an additional $700 million to be paid based on development, regulatory, and launch milestones.
Under this agreement, Novavax will receive tiered royalties on vaccine sales, while Sanofi will take a 5% equity stake in the US company. This news sent Novavax shares soaring up to 217% in premarket trading, marking the biggest one-day increase on record for the company.
Sanofi will have the rights to drive sales of Novavax’s Covid-19 shot worldwide, with the exception of certain countries where Novavax already has existing agreements. Additionally, Sanofi plans to combine Novavax’s protein-based Covid shot with its flu shot for enhanced protection. The deal also includes a non-exclusive license for Sanofi to use Novavax’s Matrix-M adjuvant in other vaccine products.
Despite this partnership, Novavax will still retain the right to develop its own combined Covid-flu vaccine at its own cost. On the other hand, Sanofi’s stock saw a slight increase in early trading in Paris, following a 5% decline over the past 12 months.
This agreement is seen as a strategic move by Sanofi, especially in the face of competition from mRNA-based vaccines. For Novavax, which has been in the midst of restructuring its business after a challenging year, this deal with Sanofi is viewed as a much-needed boost for the company’s future prospects in the healthcare industry.
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