NewLink Genetics Corp. (NASDAQ: NLNK) shares backed off early on Thursday after the company announced that it had regained the rights to GDC-0919 across multiple cancer designations. Newlink shareholders are obviously not happy after missing out on that sweet licensing revenue.
Genentech, a member of the Roche Group, informed NewLink Genetics that it intends to return the rights to IDO inhibitor GDC-0919 (navoximod) pursuant to the license agreement dated October 16, 2014.
As a consequence of such decision and pursuant to the terms of the agreement, the rights that NewLink Genetics had licensed to Genentech with respect to GDC-0919 will revert to NewLink Genetics when the termination becomes effective.
However, it is worth pointing out that the research collaboration with Genentech for the discovery of next generation IDO/TDO (tryptophan 2,3-dioxygenase) inhibitors continues.
Excluding Thursday’s move, the stock is up about 3% year to date. Over the past 52 weeks, the stock is actually down close to 9%.
Charles J. Link Jr., M.D., CEO of NewLink Genetics, commented:
We are obviously disappointed in this decision. We remain committed to advancing our IDO pathway inhibitor indoximod, which continues to generate exciting data in combination with anti-PD-1 agents, cancer vaccines, and chemotherapy in multiple cancer types including melanoma, prostate cancer, acute myeloid leukemia, and pancreatic cancer.
Shares of NewLink closed Wednesday down 3.7% at $10.62, with a consensus analyst price target of $26.80 and a 52-week range of $9.66 to $25.17. Following the release, the stock was down over 30% at $7.39 in early trading indications Thursday.