Valneva Shares Climb as Pfizer Takes $95 Million Stake
By Joshua Kirby
Shares in French drugmaker Valneva SE trade sharply higher
Monday after U.S. peer Pfizer Inc. agreed to take a shareholding in
the company, as the pair look to boost their development of a
vaccine against Lyme disease.
Under the agreement, Pfizer will invest 90.5 million euros ($95
million) in an 8.1% stake in Valneva via a reserved capital
increase at a price of EUR9.49 a share, the two companies said
Monday, adding that the investment will close Wednesday.
The deal aims to support the partnership between the two
companies in developing a vaccine candidate, known as VLA15,
against Lyme disease, they said.
At 0727 GMT, shares were trading 17% higher at EUR9.30.
The move could herald a takeover of Valneva by the larger
company, according to Jean-Jacques Le Fur, an analyst with Bryan
Garnier. If an imminent Phase 3 trial proves successful, "it is
logical to think that this first move could have in mind a takeover
of Valneva," Mr. Le Fur said in a research note following the
Valneva will use the funds from the equity investment to support
its contribution to Pfizer's Phase-3 development of VLA15, which
should begin in the third quarter this year, the companies
As part of the investment deal, the companies also amended the
VLA15 collaboration and licensing agreement, with Valneva now to
fund 40% of remaining shared development costs, compared with 30%
in the initial agreement.
Pfizer will meanwhile now pay Valneva tiered royalties ranging
from 14% to 22%, compared with royalties starting at 19% in the
initial agreement. On top of these royalties, Pfizer will pay up to
$100 million in milestones based on cumulative sales. Other
development and early commercialization milestones are unchanged,
the companies said, adding that $168 million of these latter
payments remain, including a $25 million payment to Valneva upon
Pfizer's initiation of the Phase 3 study.
A license application for VLA15 could come as early as 2025,
depending on the success of the Phase 3 study, the companies
Write to Joshua Kirby at firstname.lastname@example.org;
(END) Dow Jones Newswires
June 20, 2022 03:52 ET (07:52 GMT)
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