Novavax Sheds Going Concern Warning as NVAX Stock Pops on Sanofi Licensing Deal


  • Novavax (NVAX) has signed a multibillion dollar deal with Sanofi (SNY) for its Covid-19 vaccine.
  • The deal has allowed the company to remove its going concern notice.
  • NVAX stock is up by about 100% year-to-date (YTD).
NVAX stock - Novavax Sheds Going Concern Warning as NVAX Stock Pops on Sanofi Licensing Deal

Source: vovidzha /

Novavax (NASDAQ:NVAX) stock has more than doubled today and is up more than 120% at the time of this writing. This morning, the company announced a co-exclusive licensing agreement with Sanofi (NASDAQ:SNY) to commercialize its Covid-19 vaccine. The agreement will also provide Sanofi with a sole license to the vaccine for use in combination with its flu vaccines.

On top of that, Sanofi will receive “a non-exclusive license to use Novavax’s adjuvanted COVID-19 vaccine for use in combination with non-flu vaccines; and a non-exclusive license to use the Matrix-M adjuvant in vaccine products.”

In exchange, Sanofi will pay Novavax $500 million and up to $700 million in exchange for completing development, regulatory and launch milestones. Novavax can also receive up to $200 million from Sanofi by completing launch and sales milestones. Furthermore, Sanofi will take a minority, or less than 5% stake, in NVAX stock worth $70 million.

NVAX Stock: Novavax Announces Agreement with Sanofi

Novavax is also set to make more on the agreement, as it is slated to receive tiered double-digit percentage royalty payments when Sanofi sells Covid-19 vaccines and Covid-19-influenza combination vaccines. It will also receive mid-single digit royalties for each vaccine that Sanofi develops using Novavax’s Matrix-M adjuvant technology.

As a result of the agreement, Novavax has removed its going concern notice, as it expects to receive cash proceeds of $568.8 million during Q2. The company noted that it had substantial doubt about its ability to continue as a going concern in March 2023.

“Novavax is now in a stronger position to refocus our efforts on leveraging our technology platform and novel adjuvant in R&D and pipeline expansion to help advance our mission of developing life-saving vaccines to fight infectious diseases,” said Novavax CEO and President John C. Jacobs.

The news has overshadowed Novavax’s first-quarter earnings report. During the quarter, the company reported revenue of $93.85 million compared to $80.95 million a year ago. Profitability remains an issue for the company, as it reported a net loss of $147.55 million compared to a loss of $293.90 million the same time last year. While diluted loss per share improved to $1.05 from $3.41, weighted average shares outstanding increased significantly to 139.91 million from 86.15 million, signaling dilution.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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