Novavax to sell Czech manufacturing unit to Novo Nordisk for $200 million

(Reuters) – COVID-19 vaccine maker Novavax (NASDAQ:) said on Wednesday it will sell its manufacturing facility in Czech Republic to Wegovy-maker Novo Nordisk (NYSE:) for $200 million and use the proceeds for its vaccine pipeline.

The company has struggled to keep pace with rival vaccine makers Moderna (NASDAQ:) and Pfizer (NYSE:), which reported more than $3 billion in combined sales for their mRNA COVID-19 shots in the third quarter. It had also raised doubts about its ability to stay in business in 2023.

The divestiture of the Czech facility follows U.S.-based Novavax’s licensing deal worth at least $1.2 billion with French drugmaker Sanofi (NASDAQ:) for its COVID-19 vaccine, in exchange for the latter taking a nearly 5% stake in the firm.

Novavax shares have risen about 88% since the Sanofi deal in May.

“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,” CEO John Jacobs said in a statement.

The company expects the sale of the unit to result in annual operating cost reductions of about $80 million.

Novo Nordisk did not immediately respond to a Reuters request for comment.