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Novavax, a struggling vaccine maker, experienced a significant boost in its stock price following a multibillion-dollar deal with French drugmaker Sanofi. The stock surged by 50% as Wall Street celebrated the licensing agreement which helped Novavax remove its “going concern” warning, initially issued due to doubts about the company’s viability.

Under the agreement, Sanofi will acquire a less than 5% stake in Novavax and provide an upfront cash payment of $500 million. Additionally, Novavax will receive future payments tied to specific milestones, along with royalties. Sanofi will also co-market Novavax’s Covid vaccine in most countries starting in 2025 and have access to their Matrix-M adjuvant technology for developing new vaccine products.

According to Jefferies analyst Roger Song, the deal will inject significant capital into Novavax, supporting its growth. The upfront payment alleviates investor concerns about the company’s financial stability, while milestone payments offer immediate value. Song also highlighted the validation of Novavax’s vaccine platform and the steady revenue stream provided by royalties.

Novavax’s Covid vaccine stands out as the first to utilize protein-based technology, a traditional method in virus prevention. This innovation offers an alternative to mRNA vaccines from Pfizer and Moderna, appealing to individuals seeking different options. Leerink Partners analyst David Risinger noted that Sanofi’s role in promoting Novavax’s vaccine’s milder side effects could enhance consumer awareness and uptake.

The collaboration between Novavax and Sanofi opens doors for the development of combination jabs targeting multiple diseases, such as Covid and the flu. This strategic partnership not only bolsters Novavax’s position in the vaccine market but also paves the way for future advancements in vaccine technology and distribution.

Novavax’s deal with Sanofi signifies a turning point for the company, propelling it towards financial stability and market expansion. The partnership showcases the importance of innovation and collaboration in the pharmaceutical industry, ultimately benefiting both companies and contributing to global health initiatives.

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