Infinity Pharmaceuticals Inc. (NASDAQ: INFI) is running for the top in the market this morning, and for good reason. The company announced news with regard to royalty monetization, exciting investors and sending the stock on a run for the top. Today, we’ll talk about:
- The royalty news;
- what we’re seeing from INFI stock as a result; and
- what we’ll be watching for ahead.
INFI Announces Royalty News
As mentioned above, Infinity Pharmaceuticals is having a strong day in the market today after the company announced royalty news. In a press release issued early this morning, the company said that it entered into an agreement with HealthCare Royalty Partners.
In the release, the company said tha tthe agreement that the agreement surrounds the right to receive certain royalty payments based on worldwide annual net sales of COPIKTRA, payable by Verastem.
As a result of the agreement, HCR will pay INFI $30 million upfront. The company is also eligible to recieve up to $20 million in milestone payments.
In the release, the company said that it expects that the transaction will come to a close by March 11, 2019.
Under the terms of the agreement, the right to receive royalty payments will revert back to Infinity if HCR receives a multiple of its total investment amount and certain reasonably incurred expenses paid by HCR.
In a statement, Adelene Perkins, CEO at INFI, had the following to offer:
This non-dilutive financing provides Infinity with immediate and substantial capital to support our expansion of the breadth and depth of IPI-549 development.
We continue to be focused on creating value for patients and shareholders as we continue to progress the development of IPI-549 into additional combinations, indications, lines of therapy and later-stage trials.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. When it comes to Infinity Pharmaceuticals, the news proved to be overwhelmingly positive.
After all, the transaction will drive don-dilutive funding into the company immediately. Moreover, once certain pre-specified caps are met, royalty payments will revert back to the company and before the cap is met, it is eligible for another $20 million in milestone payments.
Considering this, it’s not surprising to see that the stock is making its way for the top, riding the wave of investor excitement. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:22), INFI is trading at $1.77 per share after a gain of $0.13 per share or 7.93% 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 INFI. In particular, we’re interested in following this transaction and the use of the funding that it will generate. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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