Health and Healthcare
Why the Sanofi and Translate Bio Vaccine Pact Is Win-Win
Published:
Last Updated:
Sanofi S.A. (NASDAQ: SNY) and Translate Bio Inc. (NASDAQ: TBIO) are making waves in the fight against the novel coronavirus as the two have agreed to expand their existing 2018 collaboration and license agreement to develop messenger RNA (mRNA) vaccines for infectious diseases.
Under the collaboration, Translate Bio is using its mRNA platform to discover, design and manufacture vaccine candidates and Sanofi is providing its deep vaccine expertise to advance vaccine candidates into and through further development. At the same time, Translate Bio will transfer technology and processes to allow Sanofi Pasteur to develop and manufacture mRNA vaccines for infectious diseases.
As for the financials of this agreement, Translate Bio will receive a total upfront payment of $425 million, consisting of a $300 million cash payment and a private placement common stock investment of $125 million at $25.59 per share. That represents a 50% premium to the 20-day moving average.
Also, Translate Bio is eligible for potential future milestones and other payments up to $1.9 billion, including $450 million of milestones under the 2018 agreement. Approximately $360 million of the cash is expected over the next several years, inclusive of COVID-19 vaccine development milestones.
Even more, Translate Bio is also eligible to receive tiered royalty payments based on worldwide sales of the developed vaccines. Sanofi will pay for all costs during the collaboration term.
What Sanofi gets out of this agreement is exclusive worldwide rights for the infectious disease vaccines developed.
Overall, not a bad deal for either side.
Translate Bio stock traded up about 60% to $25.99 on Tuesday, in a 52-week range of $6.80 to $26.50. The consensus price target is $20.33.
Sanofi was up fractionally at $52.75. It has a 52-week range of $6.80 to $26.50 and a consensus price target of $56.63.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
