Novavax to sell 7 percent stake to SK Bioscience
"This strategic investment by SK into the company is a first step in that direction (partnership expansion), clearing the existing liability sitting here as an overhang," Novavax Chief Commercial Officer John Trizzino.
United States: SK Bioscience is taking a roughly 7% stake in Novavax in lieu of some payment owed to the South Korean biotech company, giving the cash-strapped COVID-19 vaccine maker some breathing room.
Novavax had said earlier this year it may not be able to continue as a going concern, a warning it reiterated on Tuesday as it announced the stock deal and second-quarter earnings that showed a profit compared to a year-ago loss.
The company, which has faced weak demand for its COVID vaccine after delays to manufacturing, said it had negotiated down its liabilities with manufacturing partner SK Bioscience to $154 million from $195 million, and will now owe the company $65 million in cash.
"This strategic investment by SK into the company is a first step in that direction (partnership expansion), clearing the existing liability sitting here as an overhang," Novavax Chief Commercial Officer John Trizzino told Reuters in an interview.
Novavax will issue 6.5 million shares to SK Bioscience for $84.5 million, or $13 per share. In addition to the stock deal, the two also struck royalty deals worth $4 million.
Shares of Novavax, which had announced a corporate restructuring in May, fell 3.2% to $7.28 on Tuesday. They have lost around 95% of their value since the start of 2022, as Novavax fell behind rivals Pfizer-BioNTech, and Moderna.
Novavax is now counting on updated COVID-19 vaccine for the fall season and plans to set the list price of the shot at around $130 per dose, similar to its rivals.
It, however, cut its 2023 COVID vaccine sales to between $1.3 billion and $1.5 billion from the previous forecast of $1.4 billion to $1.6 billion, on expectations of lower overseas purchase contracts for the shot.
The company on Tuesday reported a surprise second-quarter profit, helped by stronger-than-expected revenue from its COVID-19 vaccine.
It posted net income of $58 million, or $0.58 per share, for the quarter, compared with a net loss of $510 million, or $6.53 a share, a year earlier. Analysts on average had expected a loss of $1.39 per share.
Its revenue of $424 million beat estimates of $240 million, according to Refinitiv IBES data.
Read also: Novavax Nuvaxovid gets full marketing authorization in EU for COVID prevention
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