Novavax to Sell Czech Manufacturing Plant to Novo Nordisk for $200M

Novavax NVAX announced that it has agreed to sell its manufacturing facility in the Czech Republic to pharma giant Novo Nordisk NVO for $200 million. The deal is expected to be closed before this year’s end.After completing this sale, Novo Nordisk will acquire a 150,000-square-foot recombinant protein manufacturing facility, along with its support buildings, existing workforce and all necessary infrastructure. In return, Novavax will receive $190 million in cash this year and the remaining $10 million next year.This Czech plant was initially acquired by Novavax in 2020 from the India-based Cyrus Poonawalla Group for $167 million. At the time, the acquisition was made to scale up the manufacturing output of its protein-based COVID-19 vaccine during the COVID-19 pandemic. However, those plans never came to fruition due to the vaccine’s delayed commercial launch.NVAX’s Intention Behind the DealPer management, the deal provides Novavax with ‘significant, non-dilutive capital’, which should enable it to advance the development of its vaccine pipeline. Management intends to start late-stage studies on its stand-alone influenza and COVID-19-influenza combination vaccine candidates as quickly as possible.This announcement does not come as a surprise. During the third-quarter earnings conference call last month, CFO Jim Kelly mentioned that Novavax was ‘actively exploring’ sale opportunities for the plant to save operating costs. If the deal with Novo Nordisk goes through, the company expects to reduce its annual operating costs by around $80 million.NVAX Stock PerformanceYear to date, Novavax’s shares have soared 72.9% against the industry’s 8.3% decline.Image Source: Zacks Investment ResearchSanofi Deal Breathes New Life Into NVAX StockThe decision came just six months after management signed a multi-billion dollar deal with Sanofi SNY. Starting next year, the French drugmaker will be responsible for marketing Novavax’s COVID-19 vaccine globally, except in certain countries where the company has existing partnership agreements. SNY also has the sole license to develop and market this COVID-19 vaccine in combination with its influenza vaccine.In return, Sanofi made an upfront payment of $500 million to Novavax. It will also pay up to $700 million in milestone payments. NVAX will be eligible to receive tiered double-digit percentage royalty payments on sales by Sanofi of the COVID-19 vaccine, Sanofi’s influenza-COVID combination vaccine and any other combination vaccine that SNY may develop, including Novavax’s COVID-19 vaccine.The deal bodes well for Novavax as it helped scrap a prior warning over the company’s ability to continue operations and provided the management with funds to support its ongoing pipeline programs. Both NVAX and SNY continue to retain the right to develop their combined COVID-19-influenza combination vaccines at their own cost.Novavax, Inc. Price Novavax, Inc. price | Novavax, Inc. QuoteNVAX’s Zacks RankNovavax currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sanofi (SNY): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Novavax, Inc. (NVAX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks