US based vaccine maker Novavax Inc has formed a joint venture with Cadila Pharmaceuticals Ltd. in India to develop, manufacture and market vaccines, pharmaceuticals and diagnostic products. While Cadila will hold 80% stake in the JV, the remaining 20% will be held by Novavax. An approval from the Foreign Investment Promotion Board (FIPB) is still awaited.
A wholly-owned subsidiary of Cadila Pharmaceuticals will purchase 12.5 million shares of Novavax’s common stock at the market price of $0.88 per share, for an aggregate of $11 million. Novavax will use the investment to pay a portion of its 4.75% senior convertible notes due in July, 2009 and for its internal research and development programs and working capital. The transaction is expected to close today, immidiately after which, Dr. Rajiv I. Modi, Managing Director of Cadila, will join the Novavax Board of Directors.
The joint venture will develop and market Novavax’s seasonal influenza virus-like-particle (VLP) based vaccine candidate and Cadila’s therapeutic vaccine candidates against cancer as well as its adjuvants, biogeneric and biological diagnostic products for the Indian territory. Novavax will also contribute technology to the joint venture for the development of several other VLP vaccine candidates against diseases of public health concern in that region, such as hepatitis E and Dengue fever.
As per the deal, Novavax will have the right to negotiate license arrangements of certain vaccines developed by the joint venture for commercialisation worldwide outside of India. It will also hold rights to negotiate for other vaccines for commercialisation in the US and several other territories outside India.
The JV will also allow Novavax to utilise Cadila’s research, clinical development, and manufacturing expertise and infrastructure to support development of current and future vaccine candidates. Novavax will also be able to use Cadila’s low-cost infrastructure to undertake part of the development of its vaccines in India. This will help Novavax in reducing its costs.
Novavax is a clinical stage biotechnology company that develops vaccines using VLPs. VLPs have a structure similar to that of a virus but without the genetic material required for viral replication. Once injected into the body, VLPs attach to cells and trigger an immune response sufficient to protect a person if they are exposed to the virus. Cadila Pharmaceuticals, on the other hand, is one of the largest privately held pharmaceutical companies in India, headquartered in Ahmedabad.
Cadila Ties Up With Eli Lilly
In another recent deal, Cadila Healthcare (Zydus Cadila), which had split form Cadila Pharmaceutical in 1995, entered into a drug discovery and development agreement with the US based Eli Lilly and company to increase productivity in drug discovery and development for curing cardiovascular diseases.
Zydus will work to discover and develop potential molecules against a novel drug target in the area of cardiovascular research. As part of the agreement, Lilly will have an option to license any resulting molecules at different stages. Zydus would receive potential milestone payments of up to $300 million and royalties on sales upon the launch of any compounds derived from the research programme.