Molecular Templates Inc (NASDAQ: MTEM) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced that it has entered into an agreement with Takeda Pharmaceutical Company, exciting investors and sending the stock screaming for the top. Today, we’ll talk about:
- The agreement;
- what we’re seeing from MTEM as a result; and
- what we’ll be watching for with regard to the stock ahead.
MTEM Announces Agreement With Takeda
As mentioned above, Molecular Templates is having an incredibly strong start to the trading session this morning after announcing an agreement with Takeda. In a press release issued early this morning, the company said that it has entered into an agreement with Takeda Pharmaceutical surrounding the joint development of CD38-targeted engineered toxin bodies (ETBs). The treatment is being designed for patients with diseases like multiple myeloma.
CD38-targeted ETB is the lead development candidate at MTEM and was discovered in collaboration between the two comapnies. The two companies developed preclinical stage ETBs targeting CD38 under its previous discovery collaboration. So, the two companies will no work together to further develop ETBs for the treatment of multiple myeloma under the new license, development, and commercialization agreement.
Under the terms of the agreement, MTEM will receive an upfront payment of $30 million. The company is also eligible to receive development, regulatory and commercial milestone payments amounting to a potential $632.5 million total. Takeda has also agreed to pay royalties on sales of the product should it be approved. The two companies have agreed to equally share development costs. In a statement, Philip Rowlands, Ph.D., Head of the Oncology Therapeutic Area Unit at Takeda, had the following to offer:
This collaboration builds on Takeda’s deep history and commitment to the study of blood cancers, including multiple myeloma… Throughout our research collaboration with Molecular Templates, we have seen the promise of its ETB platform for the discovery and development of new therapies. As we expand our relationship and continue to explore next-generation modalities, our hope is to bring forth new and important treatment options for patients.
The above statement was followed up by Eric Poma, Ph.D., CEO and CSO at MTEM, here’s wha the had to offer:
We have worked closely with Takeda’s scientific team since October 2016 to develop CD38-targeted ETBs with substantial improvements over our own internal program, MT-4019… Takeda’s expertise in multiple myeloma and strong antibody capabilities allowed us to develop CD38-targeted ETBs that, of the ones tested to date, are the most potent ETBs we have created with our platform. We look forward to moving this program into the clinic.
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. In the case of Molecular Templates, the news proved to be overwhelmingly positive. Not only will the agreement lead to an immediate injection of funds, the company is also eligible to receive further payments in the future. So, it comes as no surprise that excited investors are sending the stock up in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:20), MTEM is trading at $6.13 per share after a gain of $2.03 per share or 49.51% 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 MTEM. In particular, we’re interested in following the production of the expanded collaboration with Takeda. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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