The settlement, which includes an upfront $75 million payment to Gavi, ends arbitration related to a 2021 advance purchase agreement involving Novavax’s prototype vaccine NVX-CoV2373.
Pictured: Novavax in blue letters behind syringe and vial/Getty Images, STR/NurPhoto
Vaccine maker Novavax and public-private partnership Gavi announced Thursday that they have settled a 2021 purchase agreement for Novavax’s prototype COVID-19 vaccine NVX-CoV2373.
The deal will stop any litigation surrounding the advance purchase agreement. Novavax will be making an upfront payment of $75 million to Gavi and a deferred payment of $80 million annually through Dec. 31, 2028, which will be made in quarterly installments and total $400 million.
Novavax said that the payment would be offset or reduced under an $80 million annual vaccine credit. This can be used to sell any of Novavax’s vaccines that Gavi funds to supply low and lower-middle-income nations, according to Thursday’s announcement.
The vaccine maker said it would give an additional credit of up to $225 million if there is a demand for the vaccines, which can be applied to qualifying purchases of any of its vaccines through a five-year term.
Novavax’s stock price jumped 12% in Thursday morning trading.
“Novavax is pleased to have reached this agreement with Gavi as it gives us the ability to continue to work together toward our shared mission of ensuring equitable access to safe and effective vaccines,” Novavax CEO John Jacobs said in a statement. “We look forward to a long-term partnership with Gavi to provide continued access to our protein-based non-mRNA COVID-19 vaccine.”
The litigation between Gavi and Novavax stems from a 2021 agreement for the Maryland-based company to produce and distribute 350 million doses of its COVID-19 vaccine NVX-CoV2373 to nations under the COVAX Facility. This was designed to distribute vaccines fairly to countries and economies.
In a separate purchase agreement with Gavi and the Serum Institute of India, Novavax expected to make and deliver 1.1 billion doses of its vaccine.
However, with a drop in demand for COVID-19 vaccines, Gavi ultimately did not place the order and scrapped the advance purchase agreement, which led to Gavi trying to recover a $700 million prepayment to Novavax.
“Gavi welcomes this agreement, which allows us to maintain focus on our core programmatic goals, including providing access to COVID-19 vaccines for vulnerable people in lower-income countries. It is good for global immunization, for countries and healthy manufacturing markets,” Gavi CEO David Marlow said in a statement.
In 2023, Novavax detailed its concerns about a drop in demand for COVID-19 vaccines continuing in 2024 with uncertainties around revenue and cash flow. Its results for the third-quarter of 2023 showed revenue sinking around 75% compared to the prior year. Still, the company secured $165 million in grants from the U.S. government to cover clinical trial expenses, and its third-quarter revenue was higher than expected.
Tyler Patchen is a staff writer at BioSpace. You can reach him at tyler.patchen@biospace.com. Follow him on LinkedIn.
