11:25 AM EDT, 05/10/2024 (MT Newswires) -- Shares of Novavax ( NVAX ) more than doubled intraday Friday after the company announced a licensing agreement with French drugmaker Sanofi ( SNY ) to co-commercialize the former's adjuvanted COVID-19 vaccine and develop combination vaccines that also protect against influenza.

Novavax ( NVAX ) will receive a $500 million upfront payment and up to $700 million in development, regulatory and launch milestones, for a total of up to $1.2 billion. Once on the market, it will receive tiered double-digit percentage royalty payments on sales of COVID-19 vaccines and COVID-19-Influenza combination vaccines sold by Sanofi ( SNY ).

Sanofi ( SNY ) will take a minority equity investment in Novavax ( NVAX ) under 5%. It will begin booking COVID-19 vaccine sales and supporting certain development and commercialization expenses beginning in 2025. Shares of Novavax ( NVAX ) soared 126% in Friday trade, while Sanofi's ( SNY ) Nasdaq-listed shares were up 0.7%.

"With flu and COVID-19 hospital admission rates now closely mirroring each other, we have an opportunity to develop non-mRNA flu-COVID-19 combination vaccines, offering patients both enhanced convenience and protection against two serious respiratory viruses," said Jean-Francois Toussaint, Sanofi's ( SNY ) global head of vaccines research and development.

"We're excited by the prospect of combining Novavax's ( NVAX ) adjuvanted COVID-19 vaccine that has shown high efficacy and favorable tolerability, with our rich portfolio of differentiated flu vaccines that have demonstrated superior protection against flu and its serious complications," he said.

As part of the deal, Sanofi ( SNY ) will receive the sole license to use Novavax's ( NVAX ) adjuvanted COVID-19 vaccine for use in combination with Sanofi's ( SNY ) flu vaccines, though Novavax ( NVAX ) will continue developing its own COVID-19-Influenza combination vaccine candidate.

"Together, we can broaden access to both our COVID-19 vaccine and our adjuvant to ensure more individuals can benefit from the protection vaccines can provide," Novavax ( NVAX ) Chief Executive John Jacobs said in a statement.

The commercialization agreement extends worldwide except for countries where Novavax ( NVAX ) has existing advance purchase and partnership agreements. Novavax ( NVAX ) is entitled to additional launch and sales milestones payments up to $200 million plus mid-single digit royalties for each Sanofi ( SNY ) vaccine product developed with Novavax's ( NVAX ) Matrix-M adjuvant technology.

Price: 10.13, Change: +5.66, Percent Change: +126.62