Regulus Therapeutics Inc (NASDAQ: RGLS) is climbing in the pre-market hours this morning, and for good reason. The company announced the successful restructuring of a deal that it had in place with Sanofi. Of course, the news excited investors who are sending the stock on a run for the top. Today, we’ll talk about:
- The deal restructuring;
- what we’re seeing from RGLS Stock as a result; and
- what we’ll be watching for ahead.
RGLS Successfully Renegotiates The Agreement With SNY
As mentioned above, Regulus Therapeutics is having an incredibly strong start to the trading session this morning after announcing the restructuring of an agreement. In a press release issued early this morning, the company said that it has amended and restrucutred its Collaboration and License Agreement with Sanofi (SNY).
According to the terms of the Amendment, RGLS has granted SNY a worldwide exclusive license to develop and commercialize its investigational drug. The drug targets miR-21 and is currently being assessed as a treatment for Alport syndrome. As a result of the agreement, Sanofi will assume all future costs and development activities associated with the advancement of RG-012, currently in the midst of Phase 2 trials for Alport syndrome.
According to the agreement, RGLS is eligible to receive about $7 million in upfront and material transfer payments. The company will also be eligible to receive up to $40 million in development and milestone payments. Also, SNY will reimburse the company for certain out of pocket transition activities and assume upstream royalty license obligations.
In a statement, Jay Hagan, President and CEO at RGLS, had the following to offer:
We are pleased with Sanofi’s election to assume ongoing and future development of the RG-012 program in order to apply their expertise in rare diseases and to bring it forward as a potential new therapy for patients with Alport syndrome… We look forward to a rapid transition of the program to Sanofi and their ongoing clinical development, while we continue to focus on our stated near-term objectives. Specifically, we believe this restructuring will improve our net cash position, yielding near term cash proceeds, eliminating RG-012-related spend over the next several years, and will enable us to focus our resources on our other promising programs targeting significant unmet medical needs in Autosomal Dominant Polycystic Kidney Disease and Hepatitis B virus.
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 Regulus, the news proved to be overwhelmingly positive. The amendment to the Sanofi agreement will bring immediate funding through the doors. On top of that, the company has relieved itself of an expensive development process while opening the door to potential milestone payments of up to $40 million. So, it’s not surprising to see that excited investors are sending the stock screaming for the top. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:09), RGLS is trading at $2.22 per share after a gain of $0.34 per share or 18.09% 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 RGLS. In particular, we’re interested in following the performance of this agreement with Sanofi as well as the company’s continued work to develop various products in its relatively impressive pipeline. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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