Late at night, soar 130%! The COVID vaccine company made a major announcement

A partnership agreement detonated the stock price.

Before the U.S. stock market on Friday, Novavax Pharmaceuticals (NVAX. US) announced that it has entered into a partnership with French pharmaceutical giant Sanofi (SNY. US) reached a multibillion-dollar cooperation agreement. According to the agreement, the two parties will jointly commercialize Novavax Pharmaceutical's COVID-19 vaccine and jointly develop a combination vaccine against coronavirus and influenza starting next year.

Stimulated by the news, Novavax Pharmaceutical's U.S. stock rose sharply, once rising nearly 150%. As of press time, the company's stock price is still up more than 130% at $10.419 per share, with a total market value of $1.463 billion.

Received $1.2 billion in capital injection from the giant

According to public information, Novavax Pharmaceuticals is a novel clinical-stage biopharmaceutical company dedicated to the discovery, development and commercialization of nanoparticle recombinant vaccines and adjuvants.

In the collaboration agreement announced Friday, Sanofi will use Novavax's COVID-19 vaccine and flagship vaccine technology Matrix-M adjuvant to develop new vaccine products. As part of the transaction, Sanofi will make an upfront payment of US$500 million to Novavax Pharma and an additional payment of up to US$700 million upon reaching developmental, regulatory and go-to-market milestones. The total value of the deal is approximately double the market value of Novavax Pharmaceuticals as of the close of trading on the 9th.

Screenshot of the company's cooperation agreement

In addition, Novavax will receive royalties from the COVID-19 vaccines sold by Sanofi, as well as the combination vaccines against coronavirus and influenza. Novavax is also entitled to additional start-up and sales milestone payments and royalties of up to $200 million for each product developed by Sanofi using the Matrix-M adjuvant. Sanofi will also hold a less than 5% stake in Novavax.

Under the terms of the agreement, Novavax will lead the commercialisation of its COVID-19 vaccine for the remainder of the year and plans to hand over most of the responsibility to Sanofi in 2025. Sanofi will not participate in the commercialization of countries with existing collaboration agreements with Novavax Therapeutics, including India, Japan and South Korea, as well as countries with which the company has COVID-19 vaccine purchase agreements.

Novavax Pharma chief executive officer John Jacobs said the licence agreement would help the company lift its previously issued "going concern" warning, which was first issued in February 2023 amid doubts about its ability to continue operations.

Jacobs also said the deal will provide Novavax Pharma with ample capital to enable it to continue operations and have the opportunity to shift its strategy more to what it does best, creating more value for all stakeholders, including shareholders. In addition, the transaction will support the company's mission to improve global public health with its vaccine technology platform, which would not be possible with the company's own resources.

In addition, Jacobs believes that Sanofi's involvement as a large pharmaceutical company will increase the market share and visibility of Novavax Medicine's COVID-19 vaccine, thereby expanding patient access to the vaccine. In addition, Sanofi will be responsible for the development and commercialization of any combination product that includes its influenza vaccine and Novavax Pharmaceuticals' COVID-19 vaccine.

"By partnering with a global leader like Sanofi, we believe this will significantly increase our chances of a faster rollout of multiple new vaccines," Jacobs emphasized. ”

In addition to the collaboration agreement, Novavax Therapeutics plans to initiate late-stage trials of a combination vaccine against COVID-19 and influenza and a standalone flu vaccine later this year.

Previously, the company had said that the trial would only include combination vaccines. If the trial is successful, Jacobs said, the company will not only have a potentially licensable vaccine, but will also open up its own organic product line.

The company's performance was mixed

Novavax also reported mixed results on Friday. According to the financial report, the company's revenue in the first quarter was 94 million US dollars, a year-on-year increase of 16%; Net loss was $148 million, compared to a loss of $294 million, or $1.05 per share, in the year-ago quarter.

In fact, as a clinical-stage biotechnology company, Novavax has been losing money for a long time. The company does not have many commercial products and relies on government contracts and grants for its COVID vaccines.

In 2021, the company's COVID-19 vaccine became the fourth vaccine to receive emergency use authorization from the FDA after the Pfizer/BioNTech, Moderna and Johnson & Johnson vaccines. However, due to the slow commercialization and the easing of the new crown epidemic, the company did not seize the opportunity to develop further.

The reporter inquired about the company's quarterly reports in the past five years and found that only two quarters had a profit record, and most of the other quarters were losses. The company's revenue is also in a state of instability, with both a highlight moment of $735 million in single-quarter revenue and an embarrassment of $82 million in single-quarter revenue.

The company's share price also reflects the instability of performance. The company's stock price was as high as $331 per share in 2021, and as of the close of trading on May 9, it was only $4.47 per share, with a market value of less than $700 million.

Editor-in-charge: Wan Jianyi

Proofreading: Wang Chaoquan

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