Merus NV (NASDAQ: MRUS)
Shares of Merus(MRUS) are spiking higher by over 43% (10:00est) on news that MRUS has signed a collaboration agreement with Incyte Corporation (INCY), entering into a global, strategic, and collaboration agreement focused on the research, discovery, and development of bispecific antibodies utilizing MRUS technology platform. Our friends at Trade Ideas provided a real-time alert to the news.
MRUS And INCY
The collaborative effort grants INCY the exclusive rights to up to eleven bispecific antibody research programs, inclusive of two of MRUS’s current pre-clinical immuno-oncology discovery programs.
Ton Logtenberg, Ph.D. and CEO of MRUS, said, “This transformative, global collaboration further underscores the potential of Merus’ Biclonics®technology platform and establishes a strong relationship with Incyte, a leader in innovative drug development.” He further added, “We look forward to expanding our pipeline under this agreement, as we efficiently exploit our preclinical discovery engine and progress our most advanced, proprietary assets in the clinic.”
MRUS Receives Huge Upfront Payment
Terms of the deal provide MRUS with an upfront payment of a whopping $120 million dollars. In addition to that windfall, INCY has further agreed to purchase 3.2 million shares of MRUS stock at $25 dollars per share, approximately $6.00 higher than current levels, providing an equity investment of $80 million dollars.
Additionally, following any regulatory approval of a product candidate for this particular program, each company has agreed to pay the other tiered royalties ranging from 6 to 10 percent on net sales of products in their respective territories. MRUS will retain the rights to both of its on-going clinical candidates and retain the rights to MCLA-158 as well. The agreement also allows MRUS to retain all rights to any program that is outside the scope of the collaborative agreement.
Investors in MRUS should be quite pleased, and the stock is certainly responding well to the news, holding its opening gains as of 10:14EST. While INCY has not fared as well, the windfall to MRUS does provide enormous comfort to MRUS holders; and at these levels, especially with the $25.00 dollar price per share being paid by INCY as a suggested fair price, MRUS is a stock to watch going forward.
As always, investors should read the fine print on any deal, but with that said, this deal looks to be overwhelmingly supportive to MRUS, Never fear, though, the CNA Finance team will keep followers well appraised of any news regarding this deal, MRUS or INCY as it happens.
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