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Pfizer is taking a healthy 8% stake in the Franco-Austrian biotech company for € 90.5 million, both sides announced Monday. Pfizer puts € 9.49 per share on the table. Valneva intends to use the proceeds of the capital investment to fund its Lyme disease vaccine, which will be introduced in the third and final phase of clinical development in the third quarter of this year.
According to Valneva, the product is the only Lyme disease vaccine currently in clinical development. The program received Fast Track designation from the U.S. Food and Drug Administration (FDA) in 2017, which is intended to facilitate the development of new drugs to treat serious illnesses with unmet medical needs and to accelerate testing. If the development is successful, Pfizer hopes to apply to the FDA for vaccine approval in 2025.
Valneva and Pfizer partnered on the vaccine in the spring of 2020. Valneva will now fund 40 percent of the remaining joint development costs, up from 30 percent in the original deal. The company is also said to receive tiered royalties ranging from 14% to 22% from Pfizer, while royalties in the original deal started at 19%. Additionally, Valneva is now eligible to receive up to $ 100 million in milestone payments. Pfizer will lead late-stage development and have sole control over commercialization.
Valneva recently made headlines with her COVID-19 vaccine. The company had questioned the future of the inactivated vaccine after the European Commission announced it could terminate the pre-purchase agreement for the vaccine due to delays in the approval process.
Valneva stock rebounds after Pfizer’s stake
Pfizer is taking over 8.1 per cent of the French vaccine maker’s shares as part of a capital increase and paying a price well above the price level of the past few days, marked by a dispute with the EU over the approval and provision of the VLA2001 coronavirus vaccine candidate. Investors are now pinning new hopes on another research project as Pfizer’s investment aims to strengthen existing cooperation on the VLA15 Lyme disease vaccine. The third phase of clinical trials is expected to begin in the third quarter, he said.
Analysts saw this as good news, demonstrating Pfizer’s confidence in the development project. According to Bryan Garnier’s Jean-Jacques Le Fur, this could also be the first step in a possible acquisition. However, Damien Choplain of investment bank Oddo BHF stressed that the future of the corona vaccine, which is still open, remains the most important for the moment. A supply agreement concluded last year for up to 60 million cans also depends on its approval.
Compared to the price trend of the last few weeks, we can only speak of a strong recovery. At the beginning of June, Valneva shares were still trading at times well above the € 11 threshold and in mid-April they were even just under € 19. At the height of the pandemic, when the rush to the vaccine big deal was even more open, investors paid nearly € 30 per Valneva share in November 2021. At the time, Valneva was seen as a great hope to increase the number of people willing to get vaccinated.
As Choplain continued, in addition to the EU approval, the question of whether the EU Commission intends to terminate the supply contract as promised will be at the center of attention in the coming days. The company had previously reported that it would not be able to ensure the sustainability of the corona vaccine program if there were significantly fewer quantities. The release stated that it would not be able to change the pre-purchase agreement to allow for a reduction.
Frankfurt / PARIS (Reuters / dpa-AFX)
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