NewLink Genetics Sinks After Regaining Licensing Rights for Its Cancer Treatment
NewLink Genetics shares backed off early on Thursday after the company announced that it had regained the rights to its cancer treatment. Newlink shareholders are obviously not happy after missing out on that sweet licensing revenue.
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.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
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