Sanofi, Translate Bio Ramp Up Billion-Dollar mRNA Vaccine Collaboration

Sanofi (SNY) and Translate Bio (TBIO) have announced that they are expanding their existing 2018 collaboration and license agreement to develop mRNA vaccines for infectious diseases.

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Under the expansion agreement, Translate Bio will receive a total upfront payment of $425 million, and will also be eligible for future milestones and payments of up to $1.9 billion. Of these potential payments, $360 million are anticipated over the next several years, including COVID-19 vaccine development milestones. That’s as well as tiered royalty payments based on global sales.

Sanofi Pasteur will pay for all costs during the collaboration term and receive exclusive worldwide rights for infectious disease vaccines.

“We are excited by the novel technology and expertise Translate Bio brings, and we believe that adding this mRNA platform to our vaccines development capabilities will help us advance prevention against current and future infectious diseases” cheered Thomas Triomphe, Executive Vice President, Sanofi Pasteur.

Under the collaboration, Translate Bio is using its mRNA platform to discover, design and manufacture vaccine candidates and Sanofi Pasteur is advancing the vaccine candidates into and through further development. Translate Bio will also transfer technology and processes to allow Sanofi Pasteur to develop and manufacture mRNA vaccines for infectious diseases.

The teams are currently evaluating multiple COVID-19 vaccine candidates in vivo for immunogenicity and neutralizing antibody activity to support lead candidate selection. Their goal is to initiate a first-in-human clinical trial in the fourth quarter of 2020.

Also in the pipeline is an mRNA vaccine development candidate against influenza currently in preclinical studies with clinical trial initiation anticipated in mid-year 2021. Additional mRNA vaccine development programs under the collaboration include another viral pathogen and a bacterial pathogen.

Shares in Translate Bio have almost doubled year-to-date, while Sanofi stock is up just 5%. And encouragingly, analysts have a bullish Strong Buy consensus on TBIO stock with an average analyst price target of $20 (23% upside potential). (See Translate Bio stock analysis on TipRanks)

Jefferies’ Eun Yang reiterated his Translate Bio buy rating and $17 price target after Moderna (MRNA) announced dose-dependent immunogenicity in interim Ph1 data for its COVID-19 vaccine candidate (mRNA-1273).

He interpreted the data as “a positive readthrough for TBIO’s mRNA-based COVID-19 vaccine candidate in collaboration with SNY.” TBIO continues to build out manufacturing capability to accommodate multiple 250g batches/month towards the goal of producing 90M-360M doses annually by 1H21, the analyst added.