SK Bioscience Invests 110 Billion KRW in Novavax Stake

SK Bioscience is acquiring a stake in the U.S. drug development company Novavax worth approximately 100 billion KRW.

According to economic media CNBC and others, Novavax announced on the 8th (local time) during its Q2 earnings release that it has signed a new strategic partnership agreement with SK Bioscience.

First, Novavax decided to allocate a paid-in capital increase worth $84.5 million (about 110 billion KRW) to SK Bioscience as part of repaying some of the debt incurred during the contract manufacturing of the COVID-19 vaccine. Accordingly, Novavax plans to issue 6.5 million new common shares to SK Bioscience at $13 per share. The issuance price was calculated by adding a 59% premium to the volume-weighted average price (VWAP) over the past 90 days.

Along with this, Novavax also signed a royalty agreement with SK Bioscience. This is part of developing the relationship between the two companies from a contract manufacturing relationship to a strategic partnership. The exclusive commercialization rights for SK Bioscience in South Korea will be extended until February 2029, and the non-exclusive rights in Thailand and Vietnam will be extended until June 2028.

John Jacob, CEO of Novavax, explained, "We will receive royalties on sales in the relevant markets and an upfront payment of $4 million from SK Bioscience." He confirmed that this partnership agreement reduced current liabilities on the balance sheet by $195 million. Instead, Novavax will pay SK Bioscience $65 million in cash as part of debt repayment.

[Image source=Reuters Yonhap News]

Meanwhile, Novavax announced that it recorded a net profit of $58 million (earnings per share of $0.58) in Q2. This contrasts with a net loss of $510.5 million in Q2 of last year. Q2 revenue expanded significantly to $424.4 million from $185.9 million a year earlier. However, the annual revenue forecast was lowered to $1.3 billion to $1.5 billion from the previous $1.4 billion to $1.6 billion forecast in May.

On the morning of the same day, despite better-than-expected earnings, Novavax's stock price on the New York Stock Exchange was trading more than 2% lower than the previous close due to a weak outlook. Novavax, considered one of the beneficiaries of COVID-19, faced significant doubts about its operations earlier this year, with management openly expressing concerns about the company's survival. Since then, Novavax has pursued global cost-cutting plans, including reducing its workforce by 25% and consolidating infrastructure.

This content was produced with the assistance of AI translation services.