Novavax Stock Jumps 128% on Sanofi Deal

Novavax (NASDAQ:NVAX) shares surged by 128% intra-day today fueled by a significant multi-billion dollar deal with French pharmaceutical giant Sanofi SA, despite reporting weaker-than-expected financial results for the first quarter of fiscal 2024. The company reported a loss of $1.05 per share for the quarter, which was wider than the analyst expectation of $0.92. Revenue also fell short, coming in at $93.85 million against a consensus estimate of $141.16 million.

For the full fiscal year 2024, Novavax has projected revenue to be between $800 million and $1 billion, compared to the consensus estimate of $845.5 million.

The sharp increase in NVAX stock came after the announcement of a landmark agreement with Sanofi to jointly market Novavax's COVID-19 vaccine starting next year and to collaborate on developing combination vaccines for coronavirus and flu.

Novavax CEO John Jacobs highlighted that this partnership would enable the company to remove its "going concern" warning, which had been in place since February 2023 due to doubts about its ability to continue as a viable operation.

This deal marks a critical juncture for Novavax and its protein-based COVID vaccine, which is considered an important option for those hesitant to use mRNA vaccines like those from Pfizer and Moderna.

Under the terms of the agreement, Sanofi will gain access to Novavax's COVID vaccine and its Matrix-M adjuvant technology, which will be used to develop new vaccine formulations. Novavax will receive an upfront payment of $500 million from Sanofi, with the potential for up to $700 million more in milestone payments linked to product development, regulatory approvals, and product launches.

Additionally, Novavax will earn royalties on the sales of the COVID and combination vaccines produced by Sanofi, along with up to $200 million in further milestone payments tied to the launch and sales of each product developed using the Matrix-M adjuvant. As part of the deal, Sanofi will also acquire a stake of less than 5% in Novavax.