Evaxion Biotech AS (NASDAQ:EVAX) surged 33% in premarket trading Thursday after announcing that MSD (NYSE:MRK) has exercised its option to license Evaxion’s vaccine candidate EVX-B3.
Under the agreement, Evaxion will receive $7.5 million upfront and could earn up to $592 million in future development, regulatory, and sales milestone payments, along with royalties on net sales. MSD, known in the U.S. as Merck & Co., will handle all further development of the preclinical vaccine candidate.
EVX-B3 targets a pathogen linked to recurrent infections and severe medical complications for which no vaccines currently exist. The candidate was discovered using Evaxion’s AI-Immunology™ platform, which the company says can identify novel targets that might otherwise go undetected.
“This has significant financial value for us, but equally important is the massive validation of our AI-Immunology™ platform by MSD, the world leader in vaccine development and commercialization,” said Birgitte Rønø, CSO and interim CEO of Evaxion.
The upfront payment extends Evaxion’s financial runway into the first half of 2027. In addition, Evaxion and MSD agreed to extend the evaluation period for another vaccine candidate, EVX-B2, targeting Gonorrhea, with a decision on potential licensing now expected in the first half of 2026.
The partnership between the two companies began in September 2023 and expanded a year later through this option and license agreement.
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