Novavax to pay $80M annually to Gavi in settlement for COVID-19 vaccine APA

Novavax and Gavi, the Vaccine Alliance, announced they have reached a settlement related to the 2021 advance purchase agreement, or APA, for Novavax’s prototype COVID-19 vaccine. This agreement brings the pending arbitration related to the APA to a close. With the goal of furthering a joint commitment to public health, Novavax and Gavi have agreed to terms that will prioritize Gavi’s and Novavax’s shared mission to save lives and protect people’s health by increasing equitable and sustainable use of vaccines. Under the terms, Novavax has made an initial payment of $75M to Gavi and has agreed to make deferred payments of $80M annually through December 31, 2028, which are due in quarterly installments and total up to $400M. Novavax’s annual cash obligation would be offset or reduced pursuant to an $80M annual vaccine credit, which may be used for qualifying sales of any of the company’s vaccines funded by Gavi for supply to low-income and lower-middle income countries. Use of the annual vaccine credit for qualifying sales would reduce Novavax’s annual cash obligation. In addition to the annual obligation, Novavax will provide an additional vaccine credit of up to $225M, should there be additional demand, which can be applied towards qualifying dose purchases of any of the Company’s vaccines in such countries throughout the five-year term.