Novavax (NASDAQ: NVAX) stock soared almost 100% in intraday trading after signing a COVID-19 license deal with Sanofi and withdrawing its ‘going concern’ warning.
Novavax (NVAX) sealed a game-changing licensing agreement with Sanofi on Friday worth up to $1.2 billion for COVID-19 vaccines, effectively quelling doubts about its ability to stay in business.
Under the terms of the deal, Sanofi will acquire a 4.9% stake in Novavax for $70 million, valuing the U.S. vaccine maker at about $1.4 billion. This move comes as a turnaround for Novavax, which has seen its market capitalization dwindle to about $628 million, down from its peak of $20 billion in 2021.
The agreement grants Novavax an upfront cash payment of $500 million, milestone-based payments, and proceeds from the equity stake sale. This capital infusion will strengthen Novavax’s balance sheet, providing a much-needed boost for the vaccine maker, which has faced challenges in bringing its COVID-19 vaccine to market on time.
In return, Novavax grants Sanofi a license to co-commercialize its COVID-19 vaccine in most countries, and the opportunity to integrate the COVID shot with Sanofi’s flu vaccines to create a combination flu shot. This collaboration presents a strategic opportunity for Sanofi to enhance its flu vaccine franchise amid increasing competition from rivals like Pfizer and Moderna.
Novavax Withdrew the “going concern” Notice
The licensing deal also marks a significant milestone for Novavax, prompting the withdrawal of a “going concern” notice issued in February last year due to manufacturing snags and regulatory delays with its COVID-19 shot.
In addition to the licensing agreement, Novavax reported a net loss of $148 million in the first quarter, representing a significant improvement from the $294 million loss reported in the same period last year. However, the company revised its 2024 sales forecast, excluding contributions from the Sanofi deal, to between $400 million and $600 million, down from the previous estimate of $800 million to $1 billion.
Novavax (NASDAQ: NVAX) Stock Reaction
NVAX stock surged 98.66% to close at $8.88 on Friday. Its value increased by 80.12% this week. Trading activity has witnessed 169,845,772 (169.84 million) shares changing hands, well above the average daily volume of 6.83 million.
