Pfizer will inject $95m (£77.6m) into French pharmaceutical firm Valneva for an eight per cent stake, just days after the French pharmaceutical firm settled a Covid-19 dispute with the UK government.
Pfizer, a Big Pharma firm behind one of the world’s Covid-19 vaccines, has entered an equity subscription agreement with Valneva, as it plans to launch Phase 3 of Valneva’s Lyme Disease vaccine in the third quarter of this year.
Valneva’s share price has jumped 21.3 per cent, giving it a significant leg up after losing more than 43 per cent on its share price in the past three months.
“Pharma firms need to keep maintaining competitive advantage. The way they can do this is by having the right assets that have withstood the COVID-19 hit and will be able to withstand current global inflationary pressures,” Mazars partner Tarifa Simpson said.
“It is a vivid sign that we should expect more M&A action to come, especially for companies with a MedTech or Pharma angle. As the IPO market continues to decelerate, those businesses that want to grow and expand need to look at investment options such as partnering along some or part of its tech or drug development portfolio.”
CEO of the French firm, Thomas Lingelbach, said the fresh Pfizer investment and subscription will boost the Lyme Disease study and limit the impact on its own finances.
Senior vice president and head of vaccine research and development at Pfizer, Kathrin U. Jansen, added: “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.
“As the geographic footprint of Lyme disease widens, the medical need for vaccination becomes even more imperative.”
Troubled Covid-19 vaccine
It comes as it finally wraps up a disagreement with the UK government, which had ordered 100m doses of Valneva’s Covid-19 vaccine candidate last year, before it terminated the contract after Valneva had started production – a contract which the firm claimed could have been worth £1.2bn.
Health secretary Sajid Javid told the House of Commons in autumn last year that the jab would have failed to gain UK regulatory approval.
However, the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) gave the Valneva jab the green light in April this year after a “rigorous” review.
Valenva’s chief financial officer David Lawrence said that Javid’s comments had damaged business and consumer confidence in the vaccine.
The company’s share price plunged some 35 per cent at the time.
Valneva’s share price has been an outlier in the Covid-19 driven stock rally which has benefited pharmaceutical firms, suffering a 25 per cent plunge just last week.
The firm warned shareholders last Monday that demand for its Covid-19 vaccine was faltering at an existential level.
Valneva had been trying to salvage a deal with the European Commission (EC), which is looking to scrap an advance order of up to 60m Covid-19 jabs.
“This is clearly a disappointing development,” Rx Securities said in a note at the time, after previously forecasting more than $419m (£342.5m) in coronavirus vaccine sales, mostly relating to the contract with the Commission.
“Our forecasts no longer assume any vaccine revenues from sales to the EC,” it said in a note.