Tetraphase Pharmaceuticals Inc (NASDAQ: TTPH) is having an overwhelmingly strong day in the market today, and for good reason. The company announced that it has entered into an exclusive license agreement, leading to excitement among investors and sending the stock screaming for the top. Today, we’ll talk about the licensing agreement, what we’re seeing from the stock, and what we’ll be watching for with regard to TTPH ahead.
TTPH Gains Big On Licensing Agreement
As mentioned above, Tetraphase Pharmaceuticals is having an incredibly strong day in the market today, and for good reason. The company announced that it has entered into an exclusive licensing agreement with Everest Medicines Limited. The company, based in china, will develop and commercialize eravacycline in mainland China, Taiwan, Hong Kong, Macau, South Korea, and Singapore.
In the release, TTPH said that it will receive an initial upfront payment in the amount of $7.0 million. Moving forward, the company may receive clinical and regulatory milestone payments of up to $16.5 million as well as sales milestones of up to $20 million. Under the terms of the agreement, Everest will be solely responsible for the development and commercialization of the treatment in the territories mentioned above. Finally, TTPH will be eligible to receive double digit tiered royalties on net sales made through Everest. In a statement, Guy Macdonald, President and CEO at Tetraphase, had the following to offer:
Our agreement with Everest marks an important step in our plans to bring eravacycline to market on a global level… With positive Phase 3 data evaluating IV eravacycline in cIAI, our NDA under review by the FDA in the U.S. and our Marketing Authorization Application also under review in Europe, both for cIAI, we are expanding our commercialization strategy to China and other Asian territories and countries. With new regulations in place in China to accelerate development and approval, along with high levels of multidrug-resistant infections there, we believe there is a significant opportunity for their eravacycline to become an important new treatment in China and other territories. We are excited to have Everest as a partner and expect their development and commercialization expertise, as well as strategy for leveraging changes in the regulatory environment, will be invaluable in maximizing the value of eravacycline in the Chinese market. We look forward to working with Everest to bring eravacycline to patients and addressing a critical unmet need in a region where viable treatment options are scarce.
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 causes moves. In this particular case, the news proved to be overwhelmingly positive. After all, this license agreement will expand the reach of eravacycline and provide funding to the company in the process. So, it’s no surprise to see that Tetraphase Pharmaceuticals is making a run for the top. At the moment (11:06), TTPH is trading at $2.17 per share after a gain of $0.09 per share or 4.33% 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 TTPH. In particular, we’re interested in following the regulatory process surrounding eravacycline in the United States and Europe, and we’re excited to follow the progress of the treatment in China following this new agreement. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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