Novavax Stock More Than Doubles On Deal With Sanofi To Co-commercialize Covid-19 Vaccine

(RTTNews) - Shares of American drug maker, Novavax, Inc. (NVAX), were surging in the pre-market trade on Friday after the company announced a narrower loss for the first-quarter and a multi-million co-exclusive licensing deal with Sanofi (SNYNF,SNY), a French pharma major to commercialize Covid-19 vaccine.

NVAX was trading up by 125.28 percent at $10.06 in the pre-market trade on the Nasdaq as of this writing.

For the first-quarter, the firm recorded a net loss of $147.550 million or $1.05 per share, narrower than a loss of $293.905 million or $3.41 per share, registered for the same period last year.

Revenue climbed to $93.855 million from $80.951 million last year.

Novavax also announced a co-exclusive licensing agreement with Sanofi to co-commercialize Covid-19 vaccine and develop Novel Covid-19-Influenza combination vaccines.

In addition, Sanofi will take a minority equity stake below 5 percent in Novavax.

Under the terms of the licensing deal, Novavax will receive an upfront payment of $500 million and up to $700 million in development, regulatory and launch milestones, up to $1.2 billion in total.

Commencing in 2025, Sanofi will record sales of Novavax's adjuvanted Covid-19 vaccine and will provide backing for specific research and development, regulatory, and commercial expenditures.

Novavax will receive tiered double-digit percentage royalty payments on sales by Sanofi of Covid-19 vaccines and Covid-19-Influenza Combination vaccines.

Novavax is entitled to additional launch and sales milestone opportunities of up to $200 million, and mid-single digit royalties for each additional Sanofi vaccine product developed under a non-exclusive license with Novavax's Matrix-M adjuvant technology.

The American drug maker plans to cut research and development, and selling, general, and administrative expenses to below $500 million in 2025, a portion of which is expected to be reimbursed by Sanofi under the deal.

This reflects over $225 million reduction beyond prior stated targets.