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By Michael Erman and Siddhi Mahatole

May 6 (Reuters) - Novavax NVAX.O on Wednesday beat Wall Street estimates for first-quarter revenue, as milestone payments from vaccine supply and licensing deals helped offset pressure from sagging demand, sending its shares up nearly 7% in premarket trading.

The company relies on licensing deals and partnerships tied to its vaccine technology to drive revenue growth as narrower U.S. vaccine recommendations weigh on demand for its COVID-19 shot.

First-quarter revenue came in at $139.5 million, surpassing analysts' estimate of $78.3 million, according to LSEG-compiled data.

It gained $30 million upfront when it licensed its Matrix-M adjuvant, which boosts the body's immune response to vaccines, to Pfizer PFE.N earlier this year.

It is also eligible to receive up to $500 million in milestone payments as well as royalties on future sales.

In the first four months of 2026, the "momentum has increased exponentially regarding interest in our tech," Novavax CEO John Jacobs told Reuters in an interview.

Novavax's strategy of licensing out assets and partnering early in development has left it "partially insulated" from policy uncertainty as it avoids taking products through late‑stage trials and commercialization on its own, Jacobs said.

The company said it has expanded partnerships tied to its Matrix-M adjuvant this year, with large drugmakers and biotech companies to explore its use across infectious disease and oncology targets such as colorectal cancer and pancreatic cancer.

Novavax maintained its 2026 adjusted revenue forecast of between $230 million and $270 million. The number excludes supply sales, royalties and milestones related to its Sanofi SASY.PA deal.

The company also said it is continuing efforts to reduce costs, targeting combined research and administrative expenses of about $325 million in 2026 and $225 million in 2027.

Activist investor Shah Capital, Novavax's second-largest shareholder, has been pushing the biotech's board to pursue strategic changes, including a potential sale.