Athersys, Inc. (NASDAQ: ATHX) is having an overwhelmingly strong start to the trading session in the pre-market hours this morning, and for good reason. The company announced that it has entered into an agreement to expand its collaboration with HEALIOS K.K. (Healios). Of course, the news excited investors, sending the stock screaming for the top. Today, we’ll talk about:
- The expanded relationship;
- what we’re seeing from ATHX; and
- what we’ll be watching for with regard to the stock ahead.
ATHX Heads Up On Expanded Collaboration
As mentioned above, Athersys is having an incredibly strong start to the trading session this morning after the company announced that it has expanded its collaboration with Healios. In a press release issued early this morning, the company announced that it has expanded the collaboration into additional therapeutic areas. Under the terms of the agreement, ATHX has provided Healios with exclusive licenses to develop and commercialize MultiStem® therapy for the treatment of acute respiratory distress syndrome in Japan, as well as MultiStem cells used in combination with iPSC-derived for the treatment of certain organs. ATHX also provided Healios with an exclusive global license to develop and commercialize MultiStem cells, either as a standalone therapy or in combination with retinal pigmented epithelial (RPE) cells for certain opthalmological indications. Finally, an expansion of the license to use Athersys technology to support Healios’ organ bud program to include other transplantation areas was provided.
On the financial side of the coin, under the terms of the agreement, ATHX will recieve $20 illion in licensing fees. This comprises of $10 illion paid from an escrow account established with the letter of intent signed in March and four installments of $2.5 million each. The installments are expected to be paid in this and the next three quarters. The company is also eligible to receive up to $360 illion in development and commercialization milestone payments as well as tiered double-digit royalties on MultiStem therapies developed for ARDS and single digit royalties for other licensed products. In a statement, Dr. Gil Van Bokkelen, Chairman and CEO at ATHX, had the following to offer:
We are excited about completing this collaboration expansion with Healios… It creates exciting opportunities in meaningful therapeutic areas where there is substantial unmet medical need and tangible value for both companies, building off of the work already conducted by Athersys in certain areas, including ARDS.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dive into the market is that the news causes moves. With the expanded licensing agreements, Athersys released overwhelmingly positive news. So, it’s no surprise to see that excited investors are sending the stock screaming for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (7:47), ATHX is trading at $3.55 per share after a gain of $0.76 per share or 27.24% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ATHX. In particular, we’re interested in following the continued development of MultiStem therapy, both by the company and by Healios under the agreements outlined above. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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