((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Recast of paragraphs 1 and 2, updating of share movements)
Novavax NVAX.O entered into a licensing deal worth up to $1.2 billion for COVID-19 vaccines with Sanofi SASY.PA on Friday, in exchange for a stake that values the U.S. biotech company at double its current market capitalization.
Shares of the company more than doubled before the bell to $10.11 following the deal, as Novavax removed a warning notice from February last year ( ) that raised doubts about its ability to continue its activities.
Sanofi will take a 4.9% stake in the US drugmaker for $70 million. That values Novavax at about $1.4 billion, nearly double its market cap, which was about $628 million as of Thursday, but a far cry from its 2021 high of $20 billion.
The agreement also gives Novavax the right to an upfront cash payment of $500 million and future payments contingent on certain milestones, as well as royalties.
The cash infusion is expected to strengthen the balance sheet of the vaccine maker, whose shares have lost more than 98% of their value since the early days of the pandemic as the company has struggled to bring its vaccine to market in time. desired.
Sanofi, for its part, will obtain a license to co-sell Novavax’s vaccine in most countries and use the COVID vaccine with its own flu vaccines as part of a combination vaccination.
For the French drugmaker, the deal could help strengthen its flu vaccine franchise as companies including Pfizer PFE.N and Moderna
MRNA.O is developing rivals including combination vaccines for use alongside COVID-19 vaccines.
“We believe the goal is to have the option to deliver a future flu(plus) COVID combo vaccine as Sanofi looks to build the moat around its high-dose flu vaccine,” the analysts said of Barclays in a research note.
Separately, Novavax reduced its sales forecast for 2024, excluding contributions from the Sanofi deal, to between $400 million and $600 million, from $800 million to $1 billion previously.
It also reported a net loss that narrowed to $148 million in the first quarter, from $294 million a year ago.