OncoMed Roars on Partnership News
The biotechnology space has been a hot bed for investment over the last year as investors searched for undervalued growth in a market at all time highs. Many familiar names including Gilead, Celegene (NASDAQ:CELG) , and Amgen (NASDAQ:AMGN) have roared higher on strong pipeline data and acquisition. However, in recent weeks, some of the smaller, higher risk plays have made headlines. On Tuesday morning, shares of OncoMed roared higher despite broad market weakness following some bullish news regarding its pipeline. It was announced that the company will be launching a partnership with behemoth Celegene for research regarding a number of the company’s drugs.
In the agreement it was stated that OncoMed (NASDAQ:OMED) will be responsible for early clinical trials and will retain the rights to co-develop, co-commercialize and share in profits. For Celgene, the company now has an exclusive option to license demcizumab, OncoMed’s most advanced product which is in early-stage trials. As a result of the deal, OncoMed will be eligible to receive 50% of U.S. profits and royalties for sales internationally if demcizumab makes it to market. Moreover, OncoMed will receive $177.25 million in an upfront payment from Celgene.
In a statement following the deal, Chief Executive Officer Paul J. Hastings commented by stating “By retaining co-development and co-commercialization rights to up to five biologic product candidates in our pipeline, we expect to add commercial capabilities to our core research and development competencies as we continue to build a premier oncology biotherapeutics company”
At the time of this writing, shares of the company were higher by higher by an astounding 98 percent to $27.70 per share. Some traders have speculated the jump is overblown considering the uncertainty still left for the company. The next few days should be volatile to say the least.
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