Novavax, the pharmaceutical company that last year warned that falling sales of its Covid-19 vaccine could put it out of business, said it reached a $1.4 billion deal with French company Sanofi (+1.2%) to commercialize its existing treatment and develop a new one. Sanofi agreed to pay $500 million upfront and spend another $700 million when the company hits development, regulatory and launch milestones, Novavax said in a statement Friday. It will add $200 million to that, plus royalty payments, to include Novavax’s Matrix-M technology to Sanofi products. Matrix-M helps vaccines stimulate an immune response. The two companies will also work on a shot that combines Covid-19 and flu vaccines. Pharmaceutical companies that focused on Covid vaccines have been hit by plummeting demand. BioNTech, the German firm that partnered with Pfizer, posted a loss earlier this month. On the other hand, obesity drugs are a booming market, lifting companies such as Eli Lilly, Amgen and Denmark’s Novo Nordisk. Novavax reported earnings Friday, posting a loss of $1.05 a share. That’s slightly better than the loss of $1.06 a share expected by analysts surveyed on FactSet. Novavax stock surged 99% after the vaccine maker said it had struck a licensing deal with French healthcare company Sanofi to jointly commercialize its Covid-19 vaccine. Coming into the session, the stock had fallen 47% over the past 12 months, and its market cap was $630 million, less than half the value of the deal. Sanofi’s American depositary receipts shed 1.2% in after-hours trading. The company will take a roughly 5% stake in Novavax with the deal. French pharmaceuticals group Sanofi announced on Monday plans to invest more than €1 billion in drug production in France, with the construction of a new plant at its Vitry-sur-Seine site (Val-de-Marne).

The Swiss stock market ended trading on Friday with significant gains. The SMI climbed 1.3 per cent to 11,754 points. Among the 20 SMI stocks, there were 17 winners and 3 losers. A total of 24.52 (previously: 25.46) million shares were traded. Holcim led the SMI with an increase of 2.3 per cent. Financial stocks were also firm. Swiss Re rose by 2.5 per cent and Swiss Life by 1.4 per cent. Zurich Insurance, meanwhile, lagged behind with a plus of 0.4 per cent. UBS advanced 2.4 per cent. The shares of index heavyweight Nestle surged by 1.0 per cent. Among the pharmaceutical giants, Roche added 1.3 per cent. Novartis jumped 2.0 per cent. The Group has been granted breakthrough therapy status for its blood cancer treatment Scemblix by the US Food and Drug Administration (FDA). ABB increased by 1.3 per cent and reached a new all-time high during the day. Kuehne & Nagel (-0.6) traded with a dividend discount of 10 francs. The loss was therefore purely of an optical nature.

Europe
The European stock markets reached new highs on Friday, buoyed by the recovery of the British economy and investors' confidence in a rate cut by the main central banks over the coming months. The Stoxx Europe 600 index gained 0.8% to 520.8 points. In Paris, the CAC 40 and the SBF 120 each added 0.4%. The DAX 40 in Frankfurt advanced by 0.5% and the FTSE 100 in London climbed by 0.6%. These indices all set new all-time highs during the session. Mining group Eramet rose by 5.3%, while BofA lifted its target price for the stock from €90 to €120, confirming its ‘buy’ recommendation. Shares in electrical infrastructure specialist Legrand jumped 2.8%, as Citi upgraded its recommendation for the stock from ‘sell’ to ‘buy’. The financial intermediary also increased its target price for Legrand shares from €85 to €125. International Consolidated Airlines Group, or IAG (-0.9% in London), announced an increase in operating profit and sales in the first quarter, on the back of strong demand, and indicated that the summer season was shaping up well.

United States
U.S. Stocks on Friday notched weekly gains, putting the market’s April doldrums further in the rearview. All three indexes have advanced by at least 3.7% so far this month. The Dow Jones Industrial Average rose 0.3%, or 125 points, enough to extend its longest winning streak of 2024 to an eighth consecutive-trading session. The S&P 500 inched 0.2% higher, while the tech-heavy Nasdaq Composite edged a hair lower. The May performance marks a reversal from April, when stickier-than-expected inflation data upended Wall Street’s expectations for interest-rate cuts, fuelled a bond rout and weighed on the stock market. Since then, data showing a slowdown in hiring and growth in unemployment claims have calmed some investors’ nerves about how long inflation will remain higher than the Federal Reserve’s 2% target. Consumers’ outlook on the economy darkened in May, according to preliminary results from a University of Michigan survey. Respondents’ year-ahead inflation expectations rose to 3.5% from April’s 3.2%, weighing down sentiment in the poll to its lowest level in six months. In the stock market, more defensive sectors including utilities, industrials and materials led this week’s rally. Shares in energy firms also rose, even as oil prices held roughly steady. Benchmark U.S. crude traded Friday at $78.26 a barrel. Most of the so-called Magnificent Seven stocks were down on Friday. Nvidia and semiconductor counterparts including Qualcomm and Broadcom rose in the session after the world’s biggest contract chip manufacturer, Taiwan’s TSMC, reported blockbuster sales. In pharmaceuticals, the Food and Drug Administration won’t meet its target date for a decision on Moderna’s proposed RSV vaccine. Shares in the company fell 4.4%.

Asia
Asian stock markets are trading mostly higher on Monday. The benchmark Nikkei 225 Index closed the morning session at 38,243.59, down 14.48 or 0.04 percent. Market heavyweight SoftBank Group is gaining almost 3 percent, while Uniqlo operator Fast Retailing is edging down 0.2 percent. Among automakers, Honda is gaining 2.5 percent, while Toyota is losing almost 1 percent. Elsewhere in Asia, Hong Kong, Singapore, Malaysia, Taiwan and Indonesia are higher by between 0.1 and 0.7 percent each. New Zealand is down 1.0 percent, while China and South Korea are down 0.2 percent each.

Bonds
Yields on U.S. government debt finished at their highest levels in a week after Friday’s consumer-sentiment data from the University of Michigan showed inflation expectations have risen. The 10-year Treasury note yield rose by 4 basis points to 4.503%. The 2-year Treasury note yield climbed by 5 basis points to 4.876%.

Analysis
Jefferies upgrades Partners Group to CHF 1,170 (1,050) - Hold
Target price Landis+Gyr: Baader Helvea increases to CHF 93 (91) - Buy
UBS upgrades Leonardo to Buy (Neutral)/30 (16.60) EUR - Trader

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