Following its setback during the pandemic phase of COVID-19 with a delayed vaccine, Novavax is now aiming for recovery in the endemic phase. A significant aspect of the company’s strategy revolves around bolstering its collaboration with SK Bioscience.
The South Korean manufacturer has acquired a 7% ownership stake in Novavax by purchasing 6.5 million shares for $85 million. The price per share of $13 represents a substantial 59% premium over Novavax’s average volume-weighted price over the preceding 90 days.
Furthermore, SK Bioscience secures exclusive commercial rights to the updated Novavax COVID vaccine in South Korea until February 2029, along with nonexclusive rights in Thailand and Vietnam until June 2028. Additionally, the agreement entails a $4 million milestone payment to Novavax, coupled with royalties based on future product sales.
This arrangement also resolves $195 million of Novavax’s manufacturing obligations to SK. Throughout this year, Novavax has managed to reduce its liabilities by over $1 billion, as highlighted in its second-quarter financial report presented on Tuesday.
In a surprising turn, Novavax reported revenues of $424 million in the second quarter, along with net income of $0.58 per share. Analysts’ consensus projection had anticipated a loss of $1.39 per share. This marks a significant contrast to earlier this year when CEO John Jacobs, just five weeks into his role, expressed concerns about Novavax’s potential survival in 2023.
“My goodness, what a difference these last months have made as we further strengthen our financial position as a company.”
– Jim Kelly, Chief Financial Officer, Novavax
Nevertheless, the Maryland-based company has revised its 2023 COVID vaccine sales outlook, reducing the previous range of $1.4 billion to $1.6 billion. Novavax now anticipates vaccine sales to range from $1.3 billion to $1.5 billion.
As Novavax embarks on the commercial phase of its vaccine launch, the company has set a price of $130 per dose. It has submitted its updated vaccine for approval to the FDA and anticipates market availability in September. Simultaneously, the company is working on submissions for regulatory approval in Europe and Canada, which are expected to be completed in the “coming weeks.”
“We are confident in our readiness to deliver an updated, differentiated and competitive vaccine for this fall season. In most of our key target markets, including the US, our vaccine, if authorized, would be the only non-mRNA protein-based option available, and we’re excited about the potential to offer our vaccine as an important alternative.”
– John Jacob, CEO, Novavax
In the early months of 2021, Novavax’s stock price reached a peak of $290, during a period when the company appeared poised to emerge as a major COVID vaccine player. However, a series of manufacturing challenges resulted in the vaccine’s delayed introduction, occurring after demand had significantly declined.
As for SK Bioscience, the company plans to continue its endeavors in the endemic phase with a dual-pronged approach—manufacturing vaccines for global players and progressing the development of its own vaccine candidates.
