Sanofi invests $1.2B in Novavax vaccine platform

Amid its ongoing struggles, Novavax has announced a significant partnership with Sanofi, a major player in the vaccine industry, in a deal valued at $1.2 billion. This collaboration aims to rejuvenate Novavax’s COVID-19 vaccine efforts through joint commercialization and development of combination vaccines.

After facing prolonged challenges in successfully launching its coronavirus vaccine, Novavax is looking to leverage Sanofi’s extensive experience in the vaccine sector. The partnership will see Sanofi co-commercializing Novavax’s COVID-19 vaccine, Nuvaxovid, and working together on combination vaccines. In return, Novavax will receive an immediate $500 million, with the potential for an additional $700 million contingent upon achieving certain developmental, regulatory, and launch milestones. Sanofi will also acquire a 4.9% equity stake in Novavax.

Starting next year, Sanofi will handle the sales of Nuvaxovid. Sanofi’s extensive history in vaccines includes protecting against diseases such as polio, rabies, meningitis, and the flu on a global scale. This partnership arrives at a critical time for Novavax, which had issued a “going concern” notice earlier this year, warning stakeholders of possible bankruptcy due to dwindling demand for COVID-19 vaccines. This move also aims to quell the dissatisfaction expressed by activist investor Shah Capital, which recently criticized Novavax’s management.

Following the announcement, Novavax saw its share price surge by 121% to $9.89, although this is still significantly lower than its peak of $289 in February 2021. At that time, Novavax was celebrated for securing a $1.6 billion government grant to develop its COVID-19 vaccine. Novavax CEO John Jacobs described the deal as a pivotal moment for the company, emphasizing the potential value of their technology and expressing optimism about the partnership with Sanofi.

The collaboration is expected to broaden global access to Nuvaxovid, a protein-based adjuvanted vaccine, distinguishing it from the mRNA vaccines produced by companies like Moderna, Pfizer, and BioNTech. Sanofi will gain access to Novavax’s Matrix-M adjuvant technology, which could provide up to $200 million plus tiered royalties for each Sanofi-developed vaccine utilizing this platform.

Novavax will maintain the rights to its developing combination COVID/flu vaccine, while Sanofi will have the opportunity to use Nuvaxovid in creating other non-influenza combination vaccines. Jean-Francois Toussaint, head of vaccines R&D at Sanofi, highlighted the potential benefits of developing non-mRNA flu-COVID-19 combination vaccines, which could offer enhanced convenience and protection against two major respiratory viruses.

The urgency of this deal for Novavax was underscored by their recent financial report, which drastically revised their 2024 revenue projection from $800 million-$1 billion down to $400 million-$600 million. This sharp decrease follows revenue figures of $2 billion in 2022 and $984 million in 2023.

Concurrently, AstraZeneca is withdrawing its non-mRNA COVID vaccine from global markets. The European Medicines Agency (EMA) recently accepted AstraZeneca’s request to withdraw its marketing authorization for the COVID-19 vaccine Vaxzevria in Europe. AstraZeneca cited a surplus of updated vaccines leading to diminished demand for Vaxzevria, which is no longer being produced or supplied.

This strategic partnership with Sanofi could mark a turning point for Novavax as it attempts to stabilize and advance its position in the competitive COVID-19 vaccine market.