Most people assume that a company which invents a medicine is also the one that manufactures, markets and sells it to hospitals and pharmacies. That is often how the business works, but it is not the only way. Some drug developers hand the commercial job to a larger partner and take a cut of the sales instead. That approach sits at the heart of an announcement made today by Novavax, Inc. (NASDAQ: NVAX), a Maryland biotechnology company that builds protein-based vaccines.
The news itself is straightforward. Novavax said its partners have won regulatory approval for an updated version of its COVID-19 vaccine, Nuvaxovid, in three of the world’s largest markets: the U.S., the European Union and Japan. The updated formula is designed to match a currently circulating strain of the virus known as XFG, and it is meant for the 2026 to 2027 vaccination season.
What makes the story worth understanding is not the approval alone but how the company plans to make money from it. Novavax does not sell most of its vaccine directly. Instead, it licenses the product to bigger pharmaceutical firms that already have the sales teams, distribution networks and marketing budgets to reach patients at scale. In exchange, Novavax collects two kinds of payments. The first is a milestone, which is a lump sum triggered when a specific event happens, such as a regulatory approval. The second is a royalty, which is a share of every dollar of sales the partner brings in. This is what people mean by a partner and royalty model.
The main partner here is Sanofi S.A. (NASDAQ: SNY), a French drugmaker that leads Nuvaxovid sales across most major markets. Sanofi is expanding its marketing in the U.S. and launching the vaccine in Germany, Canada and other countries from 2026 onward, under a collaboration and license agreement the two companies signed in 2024. In Japan, a different partner handles the work. Takeda Pharmaceutical Company Limited (NYSE: TAK) sells Nuvaxovid there, and the company reported that it became the second most used COVID-19 vaccine in Japan during the 2025 to 2026 season, with both delivery volumes and the number of vaccination sites rising from the prior year.
For a company Novavax’s size, the appeal of this structure is that it does not have to pay for a large commercial operation of its own. Building a global sales force is expensive and carrying that cost while vaccine demand shifts season to season is a heavy burden for a smaller firm. By letting partners shoulder the selling, Novavax keeps its own expenses lower and turns each approval into a fairly direct source of revenue. Its business is also broader than one product, resting on a proprietary ingredient called Matrix-M, an adjuvant that boosts the immune response and appears in both Nuvaxovid and an R21 malaria vaccine developed with the Serum Institute of India. Other collaborators over time have included Pfizer (NYSE: PFE).
Seen this way, this announcement is less about a single product clearing a regulatory hurdle and more about a company showing that its chosen way of doing business can keep producing income. Novavax has become a clear example of the licensing route in modern biotechnology, where the science comes from one company and the storefront belongs to another. Whether that approach pays off this time will come down to how much vaccine its partners actually sell in the season ahead.
