May 10, 2024 - Health

Novavax strikes $1.2 billion deal with Sanofi in major turnaround

Novavax vaccine vials

Vials of Novavax COVID-19 vaccine. Photo: Matthias Bein/picture alliance via Getty Images

The French drug giant Sanofi is taking a minority stake in Novavax and entering into a licensing agreement worth as much as $1.2 billion that includes selling a combination COVID-flu shot.

Why it matters: It's a major turnaround for Maryland-based Novavax, one of America's first big bets under Operation Warp Speed that lost out in the COVID-19 vaccine race and warned last year about its ability to stay in business.

Driving the news: Novavax will receive an upfront payment of $500 million and up to $700 million in milestone payments if development, regulatory and launch targets are met.

  • Sanofi also is taking an approximately 5% equity stake in Novavax and will start booking sales of Novavax's COVID-19 vaccine next year.
  • The arrangement envisions using the Novavax product in combination with a Sanofi flu vaccine.

What they're saying: "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," said Jean-Francois Toussaint, Sanofi's global heath of vaccines R&D.

Context: Novavax won $1.6 billion in federal backing in 2020.

  • Its vaccine uses a protein from the target virus combined with what's called an adjuvant to enhance the body's immune response.
  • The approach makes Novavax's product easier to store than Moderna or Pfizer-BioNTech's vaccines, and an option for people who couldn't get or didn't want an mRNA vaccine.

However, the company ran into early production problems and struggled to meet FDA standards, falling behind Moderna and Pfizer-BioNTech.

  • It similarly had been trailing in the development of a combination COVID-flu product to eliminate the need for multiple shots during respiratory virus season.
  • The FDA authorized an updated Novavax shot last fall, making it the only non-mRNA COVID-19 vaccine available in the U.S.

Novavax shares surged on the news in overnight trading.

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