AVEO is having an incredible day in the market today after announcing a licensing agreement that surrounds AV-380 and related antibodies. Today, we’ll take a look at the licensing agreement to see what has investors so excited, talk about what we’re seeing in the market as a result of the agreement, and discuss what we can expect to see moving forward. So, let’s get right to it…
The Licensing Agreement That Has Investors Excited
Earlier today, AVEO announced an exclusive, worldwide license agreement with Novartis. The agreement is based on the commercialization and development of AVEO’s first-in-class, potent, humanized inhibitory antibody targeting growth differentiation factor 15. The antibody is known as AV-380. The agreement also includes related antibodies which include any modified or derivative forms of AV380.
According to the agreement, AVEO will receive an upfront payment of $15 million. From there, the company will be eligible to receive reimbursement, clinical, sales and regulatory-based milestone payments that could get as high as $311 million if the drug advances successfully. Finally, AVEO will be entitled to low double-digit royalties if AV-380 reaches the market. Following the announcement of the news, AVEO’s president, Michael Bailehy had the following to say…
“AV-380 holds great promise as a potential treatment for cachexia secondary to multiple disease states, including cancer, chronic kidney disease, congestive heart failure and chronic obstructive pulmonary disease… Novartis brings resources and expertise to bear on advancing this program, which we believe provides the optimal path forward toward realizing its full potential.”
How The Market Reacted To The News
As we’ve come to expect any time positive news comes out in relation to a biotechnology company, AVEO is having a great day in the market today. Currently (12:01) AVEO is trading at $1.77 per share after a gain of 51.44% so far today.
What We Can Expect To See Moving Forward
Moving forward, I’m expecting to see overwhelmingly positive news from AVEO. While it’s likely that we see declines tomorrow, following today’s massive gains, those declines are also likely to be a great opportunity to get in on future gains at a discount. So, keep your eyes peeled as this is likely to turn into a great opportunity.
What Do You Think?
Where do you think AVEO is headed and why? Let us know in the comments below!