On June 20, 2022 Valneva SE (Nasdaq: VALN; Euronext Paris: VLA), a specialty vaccine company, and Pfizer Inc. (NYSE: PFE) reported that they have entered into an Equity Subscription Agreement and have updated the terms of their Collaboration and License Agreement for Lyme disease vaccine candidate VLA15 (Press release, Valneva, JUN 20, 2022, View Source [SID1234616096]). As previously announced on April 26, 2022, Pfizer plans to initiate the Phase 3 study of VLA15 in the third quarter of 2022.
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As part of the Equity Subscription Agreement, Pfizer will invest €90.5 ($95) million in Valneva, representing 8.1% of Valneva’s share capital at a price of €9.49 per share, through a reserved capital increase to further support the strategic Lyme partnership between the two companies. The per share purchase price was determined based on the average closing price of the Company’s Shares on Euronext Paris during the 10 trading days preceding the date of the Equity Subscription Agreement. The equity investment is due to close on June 22, 2022. Valneva is planning to use the proceeds from Pfizer’s equity investment to support its Phase 3 development contribution to the Lyme disease program.
In addition, Valneva and Pfizer updated the terms of their collaboration and license agreement which they announced on April 30, 20201. Valneva will now fund 40% of the remaining shared development costs compared to 30% in the initial agreement. Pfizer will pay Valneva tiered royalties ranging from 14% to 22%, compared to royalties starting at 19% in the initial agreement. In addition, the royalties will be complemented by up to $100 million in milestones payable to Valneva based on cumulative sales. Other development and early commercialization milestones are unchanged, of which $168 million remain, including a $25 million payment to Valneva upon Pfizer’s initiation of the Phase 3 study.
Thomas Lingelbach, Chief Executive Officer of Valneva, commented "Pfizer’s investment in Valneva highlights the quality of the work that we’ve done together over the past two years and is a strong recognition of Valneva’s vaccine expertise. This subscription agreement will contribute to our investment in the Phase 3 study while limiting the impact on our cash position. Lyme disease is spreading and represents a high unmet medical need which impacts the lives of millions of people in the Northern Hemisphere. We are looking forward to further investigating our VLA15 candidate in Phase 3, which will take us a step closer to potentially help protect both adults and children from this devastating disease."
"Lyme disease continues to place a heavy burden on countries in North America and Europe, with an estimated 600,000 cases each year across both regions," said Kathrin U. Jansen, Ph.D., Senior Vice President and Head of Vaccine Research & Development at Pfizer. "As the geographic footprint of Lyme disease widens, the medical need for vaccination becomes even more imperative.We are excited to continue partnering with Valneva on the development of VLA15 and look forward to working together to progress the program with the goal of bringing forward a vaccine that could help prevent this debilitating disease."
Pending successful initiation and completion of the planned Phase 3 study for VLA15, Pfizer could potentially submit a Biologics License Application (BLA) to the U.S. Food and Drug Administration as early as 2025.
Dilution
The 9,549,761 new ordinary shares to be issued to Pfizer pursuant to the Equity Subscription Agreement will represent a dilution of approximately 8.1% of the share capital of the Company. On an illustrative basis, a shareholder holding 1% of Valneva’s capital before this capital increase will now hold a stake of 0.919%.
About VLA15
VLA15 is the only Lyme disease vaccine candidate currently in clinical development. This investigational multivalent protein subunit vaccine uses an established mechanism of action for a Lyme disease vaccine that targets the outer surface protein A (OspA) of Borrelia burgdorferi, the bacteria that cause Lyme disease. OspA is one of the most dominant surface proteins expressed by the bacteria when present in a tick. Blocking OspA inhibits the bacterium’s ability to leave the tick and infect humans. The vaccine covers the six most common OspA serotypes expressed by Borrelia burgdorferisensu lato species that are prevalent in North America and Europe. VLA15 has demonstrated a strong immunogenicity and safety profile in pre-clinical and clinical studies so far. The program was granted Fast Track designation by the U.S. Food and Drug Administration (FDA) in July 20172. Valneva and Pfizer entered into a collaboration agreement in April 2020 to co-develop VLA151.
About Lyme Disease
Lyme disease is a systemic infection caused by Borreliaburgdorferi bacteria transmitted to humans by infected Ixodes (aka deer or blacklegged) ticks3. It is considered the most common vector-borne illness in the Northern Hemisphere and according to a study published on June 13, 2022 in BMJ Global Health, Lyme disease has likely infected 14.5% of the world’s population4. Early symptoms of Lyme disease (such as a gradually expanding erythematous rash called erythema migrans or more unspecific symptoms like fatigue, fever, headache, mild stiff neck, arthralgia or myalgia) are often overlooked or misinterpreted. Left untreated, the disease can disseminate and cause more serious complications affecting the joints (arthritis), the heart (carditis) or the nervous system. The medical need for vaccination against Lyme disease is steadily increasing as the geographic footprint of the disease widens5.