The stock of American pharmaceutical company, Novavax Inc., witnessed a premarket surge following the announcement of a reduced loss for the first quarter and a significant co-licensing deal with the renowned French pharmaceutical company, Sanofi. At the time of reporting, Novavax's stocks had spiked by 125.28 percent to $10.06 on the Nasdaq.
In the first quarter, Novavax reported a net loss of $147.55 million, or $1.05 per share, a notable improvement from the previous year's loss of $293.905 million, or $3.41 per share. The company also saw an increase in revenue, rising to $93.855 million from $80.951 million.
In other developments, Novavax formed a co-licensing agreement with Sanofi to co-develop and co-market a Covid-19 vaccine, as well as a novel Covid-19-Influenza combination vaccine. Additionally, Sanofi is set to acquire a minority stake in Novavax registering at less than 5 percent.
On the specifics of the deal, Novavax will receive an upfront payment of $500 million from Sanofi along with added benefits tied to key development, regulatory and launch milestones to the total value of $700 million. This could amount to a total of $1.2 billion. Starting in 2025, Sanofi will account for the sales from Novavax's adjuvanted Covid-19 vaccine while supporting certain research, development, regulatory and commercial expenses.
Sanofi will provide Novavax with tiered double-digit royalties on the vaccines' sales, including a Covid-19 vaccine as well as a potential Covid-19-Influenza combination vaccine. Additionally, Novavax can earn up to $200 million in sales milestone opportunities and mid-single digit royalties for each additional Sanofi vaccine developed with Novavax's Matrix-M adjuvant technology under a non-exclusive license.
As part of the company's cost reduction strategy, Novavax anticipates a drop in research, development and general and administrative expenses to below $500 million by 2025, with a portion expected to be refunded by Sanofi as part of the deal. This indicates a $225 million cut, surpassing the company's previous reduction targets.
