Shares of Novavax Inc. skyrocketed after the company announced a substantial $1.2 billion licensing agreement with Sanofi, aimed at commercializing a combined Covid-19 and flu vaccine. This agreement includes significant upfront payments of $500 million, with an additional $700 million contingent upon meeting various development, regulatory, and launch milestones. Novavax will also receive tiered royalties from vaccine sales under the terms of the agreement, alongside a 5% minority equity stake in the US company granted to Sanofi.
The collaboration between Novavax and Sanofi marks a significant partnership between two major players in the vaccine industry who have both faced challenges in the rapid development and commercialization of Covid-19 vaccines during the pandemic. Falling behind other companies such as Pfizer-BioNTech and Moderna, Sanofi and Novavax have now joined forces to move forward in the vaccine market. Sanofi will take the lead in selling Novavax’s Covid-19 vaccine worldwide, excluding certain countries with existing purchasing agreements, while also having exclusive rights to combine the Covid-19 shot with its flu vaccine.
Additionally, as part of the agreement, Sanofi will have access to Novavax’s adjuvant technology for use in other vaccine products, further expanding the scope of their collaboration. While Novavax retains the autonomy to develop its combined Covid-flu vaccine independently, Sanofi’s strategic move to explore non-mRNA-based combination vaccines aligns with current market trends. The deal signifies a significant boost for Novavax, as the company navigates a period of restructuring following a challenging year in 2023.
Shares of Sanofi saw a modest increase in early trading in Paris, while Novavax experienced a substantial surge in its stock price in New York. This agreement not only positions both companies to capitalize on the growing demand for vaccines but also demonstrates their commitment to offering innovative solutions to combat respiratory viruses. With the landscape of the vaccine market evolving rapidly, the partnership between Novavax and Sanofi represents a strategic move aimed at delivering enhanced protection for patients worldwide.