Novavax Increases Its Yearly Revenue Prediction as Sluggish Vaccine Demand Is Mitigated by Licensing Bets

Novavax (NVAX.O) increased its yearly revenue projection on Thursday, relying on payments for the vaccine manufacturer’s supply and license agreements.

In order to regain growth and profitability, the Maryland-based company is concentrating on licensing its Matrix-M adjuvant and protein-based vaccination platform while reducing expenses and shifting away from direct vaccine sales.

In order to achieve profitability by 2028, it primarily depends on its licensing arrangement with Sanofi (SASY.PA). The agreement allowed Sanofi to employ Novavax’s Matrix-M adjuvant, a substance that strengthens the body’s immunological response to vaccines, and commercialize the COVID-19 vaccine.

In an interview with analysts, Novavax CEO John Jacobs stated that the French pharmaceutical company is “leaning in, not away” from the collaboration with “more engagement behind the scenes” despite a recent leadership change at Sanofi.

With royalties and revenues from the Sanofi contract excluded, Novavax anticipates adjusted revenue of $235 million to $275 million in 2026, up from an earlier estimate of $230 million to $270 million.

Additionally, the business stated that Sanofi was in advanced talks with authorities regarding the timing of a late-stage trial for their COVID-19-influenza combination injectable.

Moderna’s (MRNA.O) novel tab messenger RNA-based COVID-19 combo shot was approved by the European Commission earlier this year for use in people 50 years of age and older. Moderna’s mRNA flu vaccine, the first of its type for this indication, received U.S. approval on Wednesday.

“I believe it benefits all vaccine manufacturers. In an interview with Reuters, Jacobs stated, “We interpret that as momentum in the U.S. regulatory environment, especially for seasonal respiratory vaccines and targets.”

Following increased FDA scrutiny, which unnerved the sector and ultimately resulted in a number of leadership changes, U.S. vaccine manufacturers have been navigating regulatory uncertainty.

According to data gathered by LSEG, Novavax’s second-quarter revenue dropped 76% year over year to $57 million, exceeding analysts’ projections of $52.51 million.