Midatech Pharma PLC-ADR (NASDAQ: MTP) is climbing in the market today. However, if you’re digging for a press release or SEC filing, you’re not going to find anything. The company hasn’t issued a PR in the past 28 days.
Nonetheless, there’s a good reason for the gains. Today, we’ll talk about:
- Why MTP stock is climbing;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why MTP Stock Is Climbing
As mentioned above, Midatech Pharma is having a great day in the market today, but hasn’t issued any PRs or SEC filings. However, there is a document surfacing that clearly defines the reason fro the gains. At the top of the publication reads:
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE DIRECTLY OR INDIRECTLY
However, due to links on social making it public, I figured that it would be fair to share the link. Here it is.
In the document, MTP says that it is pleased to confirm that a license agreement with China Medical Systems has been finalized.
The agreement also came with a strategic investment made by CMS and A&B (HK). This investment came with an £8m subscription in Midatech, for in aggregate 207,792,206 Ordinary Shares at a price of 3.85 pence per share.
Under the terms of the agreement, CMS may identify its own potential product opportunities, and if agreed by MTP, CMS will be entitled to carry our such development in China with initial assistance from MTP which will be funded by CMS through a technology transfer fee.
This partnership is a huge move for the company as it provides the comapny with key strategic partnerships, giving it access to the Chinese market. In a statement, Dr. Craig Cook, CEO at MTP, had the following to offer:
We are delighted to finalise the licence agreement with China Medical Systems, a leading Hong Kong based Chinese pharmaceutical company. This is a key collaboration for Midatech that provides a strong endorsement of our technologies and pipeline whilst establishing a solid foundation for a successful and ambitious long-term partnership. The agreement will enable development of current and new products and extend our reach to the important markets of China and South East Asia. We look forward to developing this collaboration with CMS.
The above statement was followed up by Mr. Lam Kong, Chairman and CEO at CMS. Here’s what he had to say:
We are excited to work with Midatech and the strategic investment and licence agreement is testament to our confidence in the value of the Midatech product pipeline and technologies, and our commitment to the partnership. We look forward to a fruitful relationship with Midatech as we contribute to the development of its innovative pipeline of products as we incorporate them into the extensive CMS portfolio.
What We’re Seeing From The Stock
One of the first lessons that we learn as investors is that it’s important to follow the news closely. After all, the news moves the market, and with respect to Midatech Pharma, it proved to be overwhelmingly positive.
With the licensing agreements finalized, the company now has access to a vast audience in China. This is expected to greatly expand the company’s revenue, exciting investors who are sending the stock for the top.
As is normally the case, or partners at Trade Ideas were the first to alert us to the gains. Currently (11:52), MTP is trading at $0.28 per share after a gain of $0.16 per share or 137.42% 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 MTP. In particular, we’re interested in following the story surrounding the company’s continued work to expand its audience and provide value to its investors. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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