Prima BioMed Ltd (ADR) (NASDAQ: PBMD)
Prima BioMed is having an incredible start to today’s trading session, and for good reason. Early today, the company announced that it has entered into an agreement with Sydys Corporation, Inc. (OTC: SYYC). Today, we’ll talk about the details of the agreement, how the market reacted to the news, and what we can expect to see from PBMD moving forward.
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PBMD Enters Into An Important Agreement
As mentioned above, it was announced this morning that Prima BioMed has entered into an agreement with Sydys Corporation. Under the terms of the agreement, Sydys will license PBMD’s CVac immuno-oncology program and oversee its future development. In exchange for receiving the license rights to the program, Sydys will be giving PBMD a 9.9% stake in the company. On top of their ownership stake, PBMD is also eligible to receive more than A$400 million (US $293 million) in milestone payments. In a statement, Marc Voigt, CEO at Prima BioMed, had the following to say:
“Following extensive discussions with a number of third parties, we have reached what we consider to be an entrepreneurial solution which we believe best positions CVac for clinical success and, hopefully, commercialization. Importantly, this partnership continues the CVac program development without further resource commitment from Prima, while providing the potential for considerable future milestone and royalty payments over time. The ongoing development will be contigent on further successful capital raising for subsequent trials but we are confident that the Sydys team has the ability and connections in the US to undertake this program.”
How The Market Reacted To The News
As investors, we know that the news moves the market. Any time positive news is released with regard to a publicly-traded company, we can expect to see gains in the value of the stock associated with that company. Adversely, negative news will generally lead to declines. In this particular case, the news surrounding PBMD is overwhelmingly positive. After all, the company will be able to continue research without having to worry about the costs of such research. On top of that PBMD will be receiving royalties and milestone payments should the drug do well in both the development and commercialization processes. With that said, Prima BioMed is having an incredible start to the day in the market today. Currently (9:31), the stock is trading at $1.04 per share after a gain of $0.10 per share or 10.20% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have a relatively mixed opinion of what we can expect to see from PBMD. First and foremost, the company has been struggling financially for some time, and that can put some downward pressure on the stock. However, in the long run, I have an incredibly bullish opinion of what we can expect to see. One of the reasons for this opinion is today’s news. You see, CVac has tremendous potential to bring in revenue, but developing the treatment is overwhelmingly expensive. Under the new agreement, it will no longer be on Prima BioMed to come up with the funds to cover research and development associated with the treatment, and that will go a long way. All in all, I’m impressed with what we’ve seen from the treatment thus far and expect continued work on it to be fruitful, helping PBMD grow in the market.
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What Do You Think?
Where do you think PBMD is headed and why? Let us know your opinion in the comments below!
[Image Courtesy of Pixabay]