SK Bioscience to Acquire Stake in US Novavax to Strengthen Strategic Partnership (Comprehensive)

Acquisition of 6.5 Million Shares for 110 Billion KRW... Securing 6.45% Stake
Strategic Equity Investment... Mid-to-Long-Term Commercialization Cooperation
"Building a United Front to Respond to the Endemic"

SK Bioscience has decided to acquire shares of Novavax and expand strategic cooperation to respond to the endemic and to become a global company. From the left, SK Bioscience President Jaeyong Ahn, Novavax President John C. Jacobs.
[Photo by SK Bioscience]

SK Bioscience is acquiring shares of the U.S. biotech company Novavax and embarking on strategic cooperation in the global market.

SK Bioscience announced on the 9th that it has agreed to acquire 6.5 million shares of Novavax for $84.5 million (approximately 110 billion KRW) through a stock acquisition agreement. Upon completion of this acquisition, SK Bioscience will hold a 6.45% stake in Novavax.

The company explained that this equity investment was decided to establish a new strategic relationship for responding to the endemic phase (periodic outbreaks of infectious diseases) following the conclusion of the contract manufacturing (CMO) and contract development and manufacturing (CDMO) agreements made during the pandemic between SK Bioscience and Novavax. At the same time, this investment is also interpreted as a way to resolve the debt Novavax owes to SK Bioscience for the COVID-19 vaccine CMO services. Separately from this equity investment, Novavax has agreed to pay SK Bioscience $65 million (approximately 85 billion KRW) in cash to settle the debt.

Under the stock acquisition agreement, Novavax will allocate a paid-in capital increase worth $84.5 million (approximately 110 billion KRW) to SK Bioscience. Accordingly, SK Bioscience will issue 6.5 million new common shares 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. Novavax closed at $7.23 on the previous trading day, the 8th (local time), and its highest price in the past six months was $10.19.

Additionally, the two companies expanded the license agreement for Novavax’s COVID-19 variant vaccine under development. This modifies the existing license agreement to suit the endemic situation. SK Bioscience will complete and supply the drug substance (DS) and adjuvant (Matrix M) of Novavax’s newly developed COVID-19 variant vaccine as a prefilled syringe (PFS) formulation at its L House facility in Andong, Gyeongbuk. The contract amount is $24.61 million (approximately 32.576 billion KRW).

SK Bioscience will hold exclusive rights to supply and commercial production of the product domestically, and non-exclusive rights in Thailand and Vietnam. A portion of the revenue generated from commercialization will be paid to Novavax. The commercialization rights period is 20 years domestically and 5 years in Thailand and Vietnam from the contract signing date. However, if SK Bioscience launches a competing product, the domestic commercialization rights will be limited until February 2024, and in Thailand and Vietnam, until 12 months from the launch date.

Through this license agreement, SK Bioscience aims to continue playing a role in preventing viral infections in the endemic era. In particular, it plans to systematically respond to rapidly changing quarantine situations with a two-track strategy of developing its own vaccines and supplying vaccines developed globally. The company also intends to maintain strategic collaboration with Novavax and continuously secure overseas markets. Novavax has recently been developing its own COVID-flu vaccines, flu vaccines, and high-dose COVID-19 vaccine candidates.

John Jacobs, President of Novavax, said, "SK Bioscience’s strategic investment and commitment to long-term cooperation are the fruits of our collaboration so far and reflect confidence in both companies’ technological capabilities and growth potential. We will continue to pursue our shared goal of improving human health and strengthen cooperation to explore commercialization and strategic opportunities."

Ahn Jae-yong, President of SK Bioscience, said, "The strategic equity investment and cooperation between two companies that own COVID-19 vaccines developed successfully by only a few globally during the pandemic will create remarkable synergy. We will make this a successful model of global cooperation in various aspects, including company growth, global health improvement, and response to the next pandemic."

Meanwhile, through this equity investment, SK Bioscience will explore various collaborations, including utilizing Novavax’s adjuvant 'Matrix M.' This will enable SK Bioscience to advance its currently developed vaccines.

Furthermore, SK Bioscience plans to expand its global network by cooperating with overseas vaccine companies and organizations to develop new pipelines such as the 21-valent pneumococcal vaccine and messenger RNA (mRNA) vaccines. At the same time, it will actively promote the 'Glocalization' project, which involves transferring R&D and production infrastructure to countries with insufficient vaccine infrastructure.

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