COPENHAGEN - Evaxion Biotech A/S (NASDAQ: EVAX), a clinical-stage TechBio company, has entered into an option and license agreement with pharmaceutical giant MSD, known as Merck & Co., Inc. in the U.S. and Canada, for the development of two preclinical vaccine candidates. The agreement, announced today, marks a significant milestone for Evaxion, leveraging its AI-Immunology™ platform.
Under the terms of the agreement, Evaxion grants MSD the option to exclusively license its vaccine candidates EVX-B2 and EVX-B3. EVX-B2 is aimed at preventing Gonorrhea, while EVX-B3 targets an undisclosed infectious agent. Evaxion will receive an upfront payment of $3.2 million and could receive up to $10 million in 2025 if MSD exercises its licensing option. Additionally, Evaxion may receive up to $592 million in milestone payments per product, plus royalties on net sales.
This deal expands on the existing partnership between the two companies, which began collaborating on EVX-B3 in 2023. MSD, through its Global Health Innovation Fund, also became Evaxion's largest shareholder following a private placement round and participated in the company's public offering earlier this year.
Christian Kanstrup, CEO of Evaxion, expressed that the collaboration with MSD validates their technology and strategy to advance their vaccine pipeline. Tarit Mukhopadhyay, Vice President at MSD, highlighted the importance of vaccines in reducing the impact of infectious diseases and their enthusiasm to progress these candidates into clinical development.
The financial details of the agreement and the potential of the vaccine candidates to address significant unmet medical needs are of particular interest to investors. Evaxion is set to discuss the agreement in greater detail during a conference call and webcast on Friday, where they will also address other company milestones.
The development of EVX-B2 and EVX-B3 through this partnership could contribute to the global efforts in combating infectious diseases, pending successful clinical development and regulatory approvals. This information is based on a press release statement from Evaxion Biotech.
In other recent news, Evaxion Biotech has made significant strides in its clinical trials and vaccine development. The company reported positive one-year follow-up data from a Phase 2 study of their cancer vaccine candidate, EVX-01, demonstrating a favorable response rate of 69%. This was highlighted by H.C. Wainwright, which maintained a Buy rating on Evaxion's shares.
Evaxion also launched an updated version of its artificial intelligence (AI) platform, EDEN™ 5.0, to expedite the development of effective bacterial vaccines. The platform showcased a strong predictive capability, suggesting a significant advancement in cancer treatment.
Furthermore, the company reported breakthrough pre-clinical results for its EVX-B2 mRNA vaccine candidate targeting gonorrhea, demonstrating the versatility of its AI-Immunology™ platform.
On the financial front, Evaxion expects to generate $14 million in business development income, with current cash reserves anticipated to fund operations until early 2025. The company also introduced Mads Kronborg as the new VP of Investor Relations and Communication, indicating a focus on multi-partner collaborations and key milestones. These are recent developments in the company's ongoing operations.
InvestingPro Insights
As Evaxion Biotech (NASDAQ: EVAX) embarks on its partnership with pharmaceutical titan MSD, investors are keenly observing the company's financial health and market performance. According to InvestingPro data, Evaxion's market capitalization stands at a modest $15.89 million, reflecting the scale of the company in the broader biotech landscape. The company's Price to Book ratio, as of the last twelve months leading up to Q2 2024, is at a high 12.59, which could suggest that the stock is currently trading at a premium compared to its book value.
Despite the exciting prospects of the EVX-B2 and EVX-B3 vaccine candidates, InvestingPro Tips indicate that analysts do not expect Evaxion to be profitable this year, which aligns with the company's reported operating income margin of -6871.58% for the same period. This could be a point of concern for investors looking for near-term profitability. Additionally, the company's stock has experienced a significant decline over the past week, with a 10.16% drop in price total return, possibly reflecting market reactions to broader industry trends or company-specific events.
Investors may also note that while Evaxion is quickly burning through cash, its liquid assets are reported to exceed short-term obligations. This suggests that the company has sufficient liquidity to meet its immediate financial needs, an important consideration given the capital-intensive nature of biotech research and development. For those interested in further insights, InvestingPro offers additional tips on Evaxion, providing a more comprehensive analysis to support investment decisions.
As the company continues to leverage its AI-Immunology™ platform and advance its vaccine pipeline, the financial health and market dynamics will remain critical factors for stakeholders to monitor. For a deeper dive into Evaxion's financials and market performance, visit https://www.investing.com/pro/EVAX for additional InvestingPro Tips, with a current tally of 11 more tips available to subscribers.
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