By Patrick Wingrove and Bhanvi Satija
LONDON: Novavax said on Friday it has signed a licensing deal with Sanofi worth at least $1.2 billion. covid-19 vaccine In exchange for a stake that valued America biotech firm Double its current market capitalization.
The Maryland-based drugmaker’s stock more than doubled to $8.97 in Friday trading following the deal, as the company also removed a warning notice from February last year that had cast doubt on its being in business. At its peak in 2021, shares traded at around $332.
Sanofi will take a 4.9 percent stake in the US drugmaker for $70 million. Novavax is valued at about $1.4 billion, nearly double its market capitalization of about $628 million as of Thursday, but a far cry from its $20 billion peak in 2021.
The deal gives Novavax an upfront cash payment of $500 million and the right to future payments at certain milestones, as well as royalties.
Sanofi, one of the world’s largest vaccine makers, will obtain a license to co-sell Novavax’s vaccine in most countries and use its own flu vaccines as well as the COVID shot to develop a combination shot. Will use.
B. “A company like Sanofi, which has pioneered protein recombinant-based vaccines for decades, needs Novavax to be validated and really needed as its next pipeline innovation engine,” said Mayank Mamtani, analyst at Relay Securities.
For Sanofi, this deal could help strengthen its flu vaccines Companies such as Pfizer and Moderna are developing rivals, including combination vaccines used with COVID-19 shots.
The French drugmaker made about $7.5 billion in sales from its vaccines last year.
Novavax CEO John Jacobs said during a call with analysts that the company expects the deal with Sanofi to be worth billions of dollars in the future.
He said, “The majority of what we see as the future value of this deal comes from the anticipated royalties that will continue to accrue from Sanofi’s ability to sell our COVID vaccine and their own combination vaccine or vaccines “
Jacobs said the company would consider similar deals for its other experimental vaccines, including a standalone influenza shot.
short seller feel the pain
Cash flow likely to strengthen Balance sheet of vaccine manufacturerWhose shares have lost more than 98 percent of their value since the early days of the pandemic as it struggles to bring its vaccine to market on time.
Novavax has become a target for short sellers who bet the stock’s value will fall, and an activist shareholder who is pushing for change.
About 35.5 percent of Novavax’s publicly available shares are down. Friday’s rise is squeezing short sellers, who are buying back stocks to exit their positions.
Bearish investors had lost about $255 million on paper, according to analytics firm S3 Partners.
Hedge fund Shah Capital, which is pushing for changes to Novavax’s board, said the deal is “a step in the right direction for shareholders”.
Separately, Novavax cut its 2024 sales forecast to between $400 million and $600 million, from $800 million previously to $1 billion, excluding the contribution from the Sanofi deal.
It also reported a net loss that narrowed to $148 million in the first quarter from $294 million a year earlier.
(Reporting by Patrick Wingrove in New York, Bhanvi Satija, Medha Singh, Shubham Kalia and Sriparna Roy in Bengaluru and Tassilo Hummel in Paris; Editing by Shinjini Ganguly and Arun Koyur)
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