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Pfizer (PFE) to Buy 8.1% Stake in Lyme Disease Vaccine Partner
Pfizer (PFE - Free Report) announced that it will acquire an 8.1% stake in its French partner Valneva SE (VALN - Free Report) with whom it is co-developing VLA15, a vaccine candidate for Lyme disease, a tick-borne infection. Currently, there are no vaccines available for Lyme disease and VLA15 is the only Lyme disease vaccine candidate currently in clinical development.
Per the Equity Subscription Agreement, Pfizer will acquire Valneva’s stock worth €90.5 million ($95 million) for a price of €9.49 per share via a reserved capital increase. The equity investment is due to close on Jun 22. Valneva will use the cash from this investment to support its phase III study for VLA15. A phase III study of the vaccine is expected to start in third-quarter 2022.
Pfizer’s stock is down 21.2% this year so far compared with a decrease of 2.6% for the industry.
Image Source: Zacks Investment Research
The companies also updated the terms of their collaboration and license agreement, which they had formed in 2020. Valneva will now fund 40% of the cost of developing the vaccine, up from 30% initially agreed upon. The tiered royalties that Pfizer will pay Valneva upon the launch of the vaccine will be in the range of 14% to 22%, compared with royalties starting at 19% in the initial agreement. Complementing the royalties, Pfizer will pay Valneva up to $100 million in milestones payable based on cumulative sales. The agreement for other development/commercialization milestone payments remains unchanged. Pfizer is due to make a $25 million payment to Valneva upon initiation of the phase III study.
Earlier this year, Valneva and Pfizer announced data from a phase II study on VLA15, which demonstrated the vaccine’s strong immunogenicity and safety profile. The vaccine was granted Fast Track designation by the FDA in 2017.
Stocks to Consider
Pfizer currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked biotech stocks are Sesen Bio and Alkermes (ALKS - Free Report) both with a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sesen Bio’s2022 loss has declined from 33 cents to 32 cents per share in the past 60 days. Shares of SESN have risen 7.4% in the past three months.
Earnings of Sesen Bio beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 69.9%.
The Zacks Consensus Estimate for Alkermes’ 2022 loss per share has narrowed from 13 cents to 3 cents in the past 60 days. Shares of ALKS have risen 7.4% in the past three months.
Earnings of Alkermes beat estimates in each of the last four quarters, the average being 350.5%.