Novavax Rises on $1.4B COVID Vaccine Deal With Sanofi

Sanofi and Novavax have entered into a significant agreement worth up to $1.4 billion focused on the development and commercialization of a COVID-19 vaccine. This partnership aims to provide a much-needed boost to Novavax, a Maryland-based biotechnology company.

Sanofi has committed an upfront payment of $500 million for the rights to co-commercialize Novavax’s current COVID-19 vaccine formulation. Furthermore, the collaboration includes plans to develop a combined vaccine for both COVID-19 and influenza. The deal also outlines up to $700 million in milestone payments, with an additional $200 million in potential milestones for other vaccines developed using Novavax’s Matrix adjuvant technology. This brings the total potential value of the deal to $1.4 billion, which is more than double Novavax's current market capitalization of $627 million.

This influx of capital allows Novavax to retract an earlier warning issued in February 2023 regarding its financial stability and ability to continue operations. The announcement of this deal caused a significant surge in Novavax’s stock, which increased by 120% during premarket trading on Friday. This is a notable recovery from February 2024, when the stock suffered a 25% decline following underwhelming fourth-quarter earnings.

Jean-Francois Toussaint, Head of Vaccines R&D at Sanofi, highlighted the strategic importance of targeting both COVID-19 and influenza with a single vaccine. Sanofi currently has three mRNA vaccine candidates undergoing clinical trials for respiratory syncytial virus (RSV), influenza, and a combination of the two. The company also has two quadrivalent influenza vaccines available in the market, although it has not yet disclosed which of these will be combined with Novavax’s protein-based vaccine.

Toussaint stated, "With flu and COVID-19 hospital admission rates now closely mirroring each other, we have an opportunity to develop non-mRNA flu-COVID-19 combination vaccines, offering patients both enhanced convenience and protection against two serious respiratory viruses."

In addition to this new partnership, Sanofi has previously invested $3.2 billion in acquiring Translate Bio, a company specializing in mRNA technology, to enhance its capabilities in vaccine and therapeutic development.

As part of the current deal, Sanofi will also acquire a stake of just under 5% in Novavax, further solidifying the collaboration between the two companies.

Overall, this collaboration between Sanofi and Novavax represents a significant step forward in the fight against respiratory illnesses, leveraging the strengths of both companies to develop and commercialize new and more effective vaccines.