Novavax (NASDAQ:NVAX) on Friday said it has signed a multi-billion-dollar deal with French drugmaker Sanofi (NASDAQ:SNY) to co-commercialize the company’s Covid vaccine starting next year and develop combination shots targeting the coronavirus and the flu, among other efforts.
The licensing agreement will allow Novavax to lift its “going concern” warning, which it first issued in February 2023 due to having doubts about its ability to continue operating, Novavax CEO John Jacobs told the media.
It marks a turning point for the struggling vaccine maker and its protein-based COVID shot. Health officials view the vaccine as a valuable alternative for people who don’t want to take messenger RNA jabs from Pfizer (NYSE: PFE) and Moderna (NASDAQ: MRNA).
Part of the deal allows Sanofi to use Novavax’s COVID shot and flagship vaccine technology, Matrix-M adjuvant, to develop new vaccine products. Sanofi will pay Novavax an upfront payment of $500 million and up to $700 million in payments for development, regulatory and launch milestones.
That total is roughly double Novavax’s current market cap of $627 million.
Novavax is also entitled to royalty payments on Sanofi’s sales of its COVID vaccine and combination shots targeting coronavirus and the flu. Novavax will also receive additional launch and sales milestone payments of up to $200 million, along with royalties, for each product Sanofi develops with Matrix-M adjuvant.
Under the deal, Sanofi will also take a less than 5% stake in Novavax.
NVAX shares rocketed $5.75, or 128.6%, to $10.22, while SNY gathered 22 cents to $48.90.