Novavax to receive $350 million from Canada for unused COVID shots

Novavax to receive $350 million from Canada for unused COVID shots

Canada Settles with Novavax for Unused COVID-19 Vaccine Doses:

Novavax Inc (NVAX.O) announced on Friday that it had reached an agreement with Canada, under which the country would pay $349.6 million to settle the forfeiting of certain doses of the company’s COVID-19 vaccine that were originally scheduled for delivery. This development comes as a result of a significant decrease in global demand for COVID-19 vaccines, leading to a surplus of unused doses.

In addition to the settlement, Novavax also entered into a revised contract with Canada’s public works and government services department. The terms of the advance purchase contract were amended to reflect the reduced number of vaccine doses due for delivery and the revised schedule for the remaining doses. Novavax has taken this step to adapt to the changing circumstances and ensure the efficient distribution of their vaccines.

Amended Contract Reflects Decline in Global Vaccine Demand:

The payment from Canada will be made in two equal installments during 2023, and it is important to note that the original value of the contract remains unchanged. However, the department retains the right to terminate the contract if Novavax fails to obtain regulatory approval for vaccine production at the Biologics Manufacturing Centre by December 31, 2024. This provision highlights the importance of meeting regulatory requirements and ensuring the quality and safety of the vaccine.

(Read Also: Canada: Airdrie Calls for Fair Funding Formula to Address Infrastructure and Healthcare Needs)

Novavax Raises Concerns About Future Business Viability:

Novavax, which has been in business for 35 years and currently has its COVID-19 vaccine as its sole marketed product, has expressed concerns about its future viability. The company has raised uncertainties regarding its revenue and is facing a funding crunch. In May, Novavax projected its 2023 revenue to be between $1.4 billion and $1.6 billion. This estimate includes $800 million from “locked-in” overseas purchase contracts for the COVID-19 shot, which the company has committed to shipping this year.

(Read Also: Record-Breaking Forest Fires Continue to Rage Across Canada, Over 670 Blazes and Counting)

As the global demand for COVID-19 vaccines continues to evolve, pharmaceutical companies like Novavax are adapting their strategies to navigate these changing circumstances. The settlement with Canada and the revised contract reflect Novavax’s commitment to adjusting their operations and ensuring the efficient distribution of their vaccines.

Read More Breaking News