Fibrocell Science Inc (NASDAQ: FCSC) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced news with regard to a strategic collaboration, exciting investors and sending the stock running for the top. Today, we’ll talk about:
- The collaboration news;
- what we’re seeing from FCSC stock as a result; and
- what we’ll be watching for ahead.
FCSC Stock Climbs On Collaboration
As mentioned above, Fibrocell Science is having a great day in the market today after announcing a collaboration agreement. The announcement came by way of press release early this morning.
In the release, the company said that it has entered into an agreement with Castle Crrek Pharmaceuticals. The goal of the agreement is to develop and commercialize the lead gene therapy candidate at FCSC, known as FCX-007.
FCX-007 is currently under development as a potential treatment for recessive dystrophic epidermolysis bullosa (RDEB). This is a rare, life-threatening genetic disorder that is diagnosed at infancy. Unfortunately, there are no currently approved treatments in the United States for this condition.
According to the terms of the agreement, Castle Creek will receive an exclusive license to commercialize FCX-007 in the United States. Castle Creek will be responsible for all development and manufacturing expenses up to $20 million prior to the initial BLA filing with the FDA.
Should development expenses climb above $20 million, Castle Creek will pay 70% of excess costs with FCSC paying 30%. Also, Castle Creek will be responsible for commercialization activities associated with the treatment.
In exchange, Fibrocell will receive an upfront payment of $7.5 million. The company will also receive $2.5 million for the first patient enrolled in the Phase 3 trial and $30 million upon BLA approval.
The company is also eligible to receive up to $75 million in sales-based milestones. $25 million will be paid once the treatment achieves $250 million in cumulative net sales and an additional $50 million upon achieving $750 million in cumulative net sales. Finally, the company will receive a 30% share of the gross profits from sales.
In a statement, Greg Wujek, CEO at Castle Creek, had the following to offer:
We believe our collaboration with Fibrocell is synergistic and serves both of our long-term objectives well. It increases the breadth of Castle Creek’s potential epidermolysis bullosa therapies by combining our clinical trial evaluating our investigational topical therapy (CCP-020) for epidermolysis bullosa simplex (EBS) with Fibrocell’s gene therapy to potentially treat RDEB.
Castle Creek values the contributions of the Fibrocell team in progressing development of FCX-007, and we are excited to work with them to continue advancing this novel EB therapy that offers the potential to bring relief to patients suffering from this chronic, painful and debilitating disease.
The above statement was followed up by John Maslowski, President and CEO at FCSC. Here’s what he had to say:
We are proud to partner with Castle Creek Pharmaceuticals, a company recognized for its innovation in drug development for rare skin diseases and its commitment to the epidermolysis bullosa community. This agreement provides resources and non-dilutive capital to continue the development and, if approved, commercialize FCX-007, a potentially transformative treatment for RDEB patients.
With Castle Creek Pharmaceuticals providing funding for the development of FCX-007, Fibrocell can allocate additional resources to advance clinical development of FCX-013 for the treatment of moderate to severe localized scleroderma.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Fibrocell, the news proved to be overwhelmingly positive.
After all, the collaboration will bulster the company’s balance sheet while giving it support in the development of FCX-007. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:59), FCSC is trading at $2.68 per share after a gain of $0.90 per share or 50.56% 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 FCSC. In particular, we’re interested in following the story surrounding the company’s continued work to bring FCX-007 to market as the treatment now has the support of a strong partner. Nonetheless, we’ll keep a close eye on the story and bring the news to you as it breaks!
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