One of the big pharma entities in the U.S., Pfizer Inc. (NYSE: PFE), just got into a deal with French jab manufacturer Valneva SE.
The timing of this deal couldn’t have come at a better time, given the setback and reputational risks that Valneva has been facing in its Covid-19 vaccine candidate disagreement with the UK government. The incident had only served to dent business and consumer confidence in Valneva.
Luckily, the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) rigorously tested Valneva’s Covid-19 vaccine and certified it as safe back in April 2022.
And now, after reeling through that turmoil that saw Valneva’s share price tank some 35% at the time, the French pharmaceutical is accelerating its Lyme disease vaccine research with the help of Pfizer’s cash injection
Details of the equity subscription agreement
Pfizer will be forking out $95 million to buy an 8.1 stake in Valneva. The cash boost will primarily be an investment in Valneva’s phase 3 of the testing program and the continued development of Lyme disease vaccine candidate VLA15. It’s a part of a grand plan between Pfizer and Valneva in their partnership agreement to fight Lyme disease.
Through a reserved capital increase, Pfizer will purchase the 8.1% equity for $9.99 per share. Additionally, Valneva will receive tiered royalties of between 14% and 22% from different stages of the VLA15 vaccine development.
The Pfizer and Valneva partnership moving forward
The two biotech firms first announced their partnership and collaboration in the Lyme Disease Program in April 2020.
If anything, this $95 million deal is an extension of that partnership. Pfizer Inc. (NYSE: PFE) plans to formally launch phase 3 of the Lyme disease vaccine program in quarter three of 2022.
The joint Lyme disease venture is already showing a promising outlook for Valneva as its share price breaks out to trade at a 16% higher share price after a 52% increase in the week ending June 19, 2022.
