Novavax Announces Sale of Czech Republic Manufacturing Site to Novo Nordisk for $200 Million

Rhea-AI Summary

Novavax (NVAX) has announced the sale of its manufacturing facility in Bohumil, Czech Republic, to Novo Nordisk for $200 million. The deal includes a 150,000-square foot recombinant protein manufacturing facility with support buildings, workforce, and infrastructure.

The transaction will provide Novavax with $190 million in cash payment in 2024 and an additional $10 million in 2025. The company expects to achieve annual operating cost reductions of approximately $80 million. This non-dilutive capital will support Novavax's corporate growth strategy focused on developing its pipeline assets and technology platform, including Matrix-M adjuvant and nanoparticle protein-based technology.

Positive

• Sale of Czech facility provides $200 million in non-dilutive capital
• Expected annual operating cost reduction of $80 million
• Immediate cash injection of $190 million in 2024

Negative

• Reduction in manufacturing capacity and infrastructure

Insights

Financial Analyst

This strategic sale represents a significant financial boost for Novavax, providing $200 million in non-dilutive capital and reducing annual operating costs by $80 million. The deal structure, with $190 million in 2024 and $10 million in 2025, strengthens Novavax's balance sheet and improves cash flow. For a company with a market cap of $1.4 billion, this transaction represents approximately 14% of its market value.

The sale aligns with Novavax's restructuring efforts to become more efficient and focus on its core competencies. The reduction in operating expenses will significantly improve the company's financial flexibility and burn rate. This move from manufacturing to a more asset-light model could enhance operational efficiency and allow better resource allocation toward pipeline development.

Manufacturing Operations Expert

The sale of the 150,000-square foot facility in Bohumil represents a strategic shift from vertical integration to a more focused business model. This divestment indicates Novavax's transition from maintaining capital-intensive manufacturing infrastructure to potentially leveraging contract manufacturing organizations (CMOs) for production needs. The facility's transfer to Novo Nordisk, including the existing workforce, ensures operational continuity and minimizes disruption while allowing Novavax to maintain its technological capabilities through its Matrix-M adjuvant and protein-based platform.

• Agreement provides significant, non-dilutive capital to Novavax, further enabling the Company to advance its corporate growth strategy of driving value from its pipeline assets and proven technology platform
• Provides Novavax with $190 million cash payment in 2024 and additional $10 million in 2025, and annual operating cost reductions of approximately $80 million

GAITHERSBURG, Md., Dec. 4, 2024 /PRNewswire/ -- Novavax, Inc. (Nasdaq: NVAX), a global company advancing protein-based vaccines with its Matrix-M™ adjuvant, today announced that it has signed a definitive agreement to sell its manufacturing facility in Bohumil, Czech Republic to Novo Nordisk for $200 million. The agreement includes a transfer of assets, including a 150,000-square foot state-of-the-art recombinant protein manufacturing facility with support buildings, along with the existing workforce and all related and required infrastructure.

The agreement provides Novavax with significant, non-dilutive capital, further enabling the Company to advance its corporate growth strategy to drive value from its early- and late-stage pipeline using its proven technology platform, consisting of Matrix-M adjuvant and nanoparticle protein-based technology. In addition to the $190 million cash payment in 2024 and additional $10 million in 2025, Novavax expects the sale of the facility to result in annual operating cost reductions of approximately $80 million.

"The decision to sell the Czech Republic manufacturing facility aligns with our previously announced commitment to evolve Novavax into a more lean and agile organization focused on partnering our pipeline assets and technology platform," said John C. Jacobs, President and Chief Executive Officer, Novavax. "We are thankful to our dedicated colleagues in the Czech Republic who have contributed to Novavax's mission of delivering our technology to address unmet needs. We look forward to working with Novo Nordisk to ensure a successful transition."

Following closure of the agreement, expected by December 30, 2024, full responsibility for the manufacturing facility will be transferred to Novo Nordisk.

About Novavax
Novavax, Inc. (Nasdaq: NVAX) promotes improved health by discovering, developing and commercializing innovative vaccines to help protect against serious infectious diseases. Novavax, a global company based in Gaithersburg, Md., U.S., offers a differentiated vaccine platform that combines a recombinant protein approach, innovative nanoparticle technology and Novavax's patented Matrix-M adjuvant to enhance the immune response. The Company's portfolio includes its COVID-19 vaccine and its pipeline includes its COVID-19-Influenza Combination and stand-alone influenza vaccine candidates. In addition, Novavax's adjuvant is included in the University of Oxford and Serum Institute of India's R21/Matrix-M™ malaria vaccine. Please visit novavax.com and LinkedIn for more information.

Forward-Looking Statements
Statements herein relating to the proposed sale of Novavax's Czech Republic manufacturing site, the expected timing of completion of the proposed sale, the receipt of the consideration to be received for the proposed sale, the anticipated operating cost reductions and Novavax's corporate growth strategy, value drivers and priorities are forward-looking statements. Novavax cautions that these forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, without limitation, the inability of the parties to complete the proposed sale, including due to the failure to satisfy the condition precedent to the closing of the sale; the risk that the proposed sale disrupts Novavax's plans and operations; the inability to recognize the anticipated operating cost reductions and other anticipated benefits of the proposed sale; unanticipated costs related to the proposed sale challenges satisfying, alone or together with partners, various safety, efficacy and product characterization requirements, including those related to process qualification and assay validation, necessary to satisfy applicable regulatory authorities; difficulty obtaining scarce raw materials and supplies; resource constraints, including human capital and manufacturing capacity, on the ability of Novavax to pursue planned regulatory pathways; challenges or delays in conducting clinical trials; challenges in implementing its global restructuring and cost reduction plan; challenges meeting contractual requirements under agreements with multiple commercial, governmental, and other entities, challenges related to the seasonality of vaccinations against COVID-19; and those other risk factors identified in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of Novavax's Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (SEC). We caution investors not to place considerable reliance on forward-looking statements contained in this press release. You are encouraged to read our filings with the SEC, available at www.sec.gov and www.novavax.com, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this document, and we undertake no obligation to update or revise any of the statements. Our business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

Contacts:
Investors
Luis Sanay, CFA
240-268-2022
ir@novavax.com

Media
Giovanna Chandler
240-720-7804
media@novavax.com

 

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SOURCE Novavax, Inc.

FAQ

How much is Novavax (NVAX) selling its Czech Republic facility for?

Novavax is selling its Czech Republic manufacturing facility to Novo Nordisk for $200 million, with $190 million to be paid in 2024 and $10 million in 2025.

What cost savings will Novavax (NVAX) achieve from selling its Czech facility?

Novavax expects to achieve annual operating cost reductions of approximately $80 million from the sale of its Czech Republic manufacturing facility.

When will the Novavax (NVAX) Czech facility sale close?

The sale of the Czech Republic manufacturing facility is expected to close by December 30, 2024.