Pfizer is throwing its weight behind Valneva to support late-phase development of a Lyme disease vaccine candidate, agreeing to invest 90.5 million euros ($95.6 million) as part of a revised deal that triggered an 81% surge in its partner’s pre-market share price.
Valneva and Pfizer have built the case for the multivalent protein subunit vaccine VLA15 across a series of data drops, putting them in a position to target a third-quarter start for a phase 3 clinical trial. Ahead of the launch of the pivotal study, the partners have gone over their deal, which saw Pfizer pay Valneva $130 million upfront in 2020, and come up with a revised set of terms.
Under the new deal, Valneva will fund 40% of the remaining shared development costs, up from 30% in the original deal. Pfizer is investing in Valneva, taking an 8.1% stake, to enable its partner to support the phase 3 trial without straining its cash position. Valneva ended March with 311.3 million euros in the bank.
The new deal features revised future paydays for Valneva, too. Pfizer is now set to pay tiered royalties of 14% to 22%, versus a starting rate of 19% under the original agreement, and has added up to $100 million in milestones based on cumulative sales to the deal. Valneva is still in line to receive up to $168 million in development and early commercialization milestones, including $25 million tied to the phase 3 initiation.
The Pfizer news triggered a jump in Valneva’s stock, which has taken a battering in 2022 as setbacks to its COVID-19 vaccine have added to the general malaise of the biotech bear market. With U.S. stock markets closed on Monday, and Valneva’s stock sinking late on Friday, premarket trading on Tuesday baked in two days of gains in Europe since the news was disclosed, causing the share price to rise 81% to $25.
Attention now turns to a phase 3 clinical trial that could energize the long-dormant Lyme disease market. SmithKline Beecham won approval for a Lyme vaccine in the late 1990s, only to pull the product from the market a few years later. Since then, reported U.S. cases of Lyme have soared, increasing the unmet need created by the exit of SmithKline Beecham and decision by Pasteur Mérieux Connaught to drop its asset.