PARIS: Sanofi on Friday announced it has reached a licensing agreement with Novavax to sell a stand-alone COVID-19 vaccine and develop new flu-COVID-19 combination vaccines while also taking an equity stake in its US peer.

“We’re excited by the prospect of combining Novavax’s adjuvanted COVID-19 vaccine that has shown high efficacy and favorable tolerability, with our rich portfolio of differentiated flu vaccines (…)”, Sanofi’s head of vaccines R&D, Jean-Francois Toussaint, said in a statement.

Under the agreement, Novavax will receive an upfront payment of $500 million and could receive up to $700 million in development, regulatory and launch milestones, totalling up to $1.2 billion, Sanofi said.

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Novavax will also receive double-digit percentage royalty payments on sales of its COVID-19 jab and flu-COVID-19 combination vaccines under the deal.

Sanofi also said it would take a minority equity stake below 5% in Novavax.

Novavax missed out on the COVID-19 vaccine windfall, which benefited mRNA rivals, due to manufacturing issues that delayed its filing for regulatory approval during the peak of the pandemic.

Its original COVID shot received US authorization in July 2022, long after Pfizer and Moderna were in use.