Merck & Co. Inc. (MRK) has decided to pass on Evaxion A/S (EVAX)'s gonorrhea vaccine candidate EVX-B2, a setback that sends the Danish biotech company back into the market hunting for a new partner.
The decision means Evaxion retains global rights to EVX-B2 and will now pursue alternative licensing partners for a vaccine targeting a disease that infects more than 80 million people worldwide each year. Here's the thing: despite decades of research, no gonorrhea vaccine has ever made it to market. Preclinical studies suggest EVX-B2 could actually protect against the Neisseria gonorrhoeae bacteria, which causes this common sexually transmitted infection.
"Evaxion did not include a potential in-licensing of EVX-B2 by MSD in its cash-flow outlook. Thus, the decision by MSD does not impact our cash runway, which still extends to the second half of 2027," said Helen Tayton-Martin, CEO at Evaxion.
That's actually good news for investors worried about the company's financial stability. The rejection stings, but it doesn't change the math on how long the company can operate.
Merck's option specifically covered the protein-based version of EVX-B2. Meanwhile, Evaxion is separately developing an mRNA version of the same candidate in collaboration with Afrigen Biologics, giving them a second shot at the target with different technology.
This isn't Evaxion's first rodeo with Merck. In September, the companies actually completed a successful deal when Merck licensed Evaxion's EVX-B3 vaccine candidate under an option and license agreement from September 2024. That deal brought Evaxion $7.5 million upfront, with potential milestone payments reaching up to $592 million, plus royalties on net sales. Merck assumed full responsibility and costs for developing EVX-B3.
On a related note, GSK Plc (GSK) received FDA approval last week for gepotidacin as an oral treatment for uncomplicated urogenital gonorrhea, expanding options for treating the infection even as the vaccine race continues.
Price Action: EVAX stock dropped 14.61% to $4.91 on Friday following the announcement.
