Alkermes PLC (NASDAQ: ALKS) shares made a handy gain to start the week, after the firm announced that it has entered into a global license agreement with Biogen Inc. (NASDAQ: BIIB). Specifically, the agreement is to commercialize ALKS 8700, which is in Phase 3 development for the treatment of relapsing forms of multiple sclerosis (MS).
Under the terms of the agreement, Biogen will receive an exclusive, worldwide license to commercialize ALKS 8700 and will pay Alkermes a mid-teens royalty on worldwide net sales of the drug.
Biogen will reimburse Alkermes for 50% of the 2017 ALKS 8700 development costs, with Alkermes receiving an upfront payment of $28 million, representing Biogen’s share of development expenses already incurred in 2017. At the beginning of 2018, Biogen will be responsible for all development expenses related to ALKS 8700.
Also Alkermes may also receive milestone payments for ALKS 8700 with a maximum aggregate value of $200 million upon certain clinical and regulatory achievements. Biogen anticipates the initial milestone payment of $50 million will be recorded as an expense in 2017.
Michel Vounatsos, CEO at Biogen, commented:
This partnership is further evidence of Biogen’s ongoing commitment to multiple sclerosis and builds upon our deep experience in neuroscience and particularly in MS. We aim to provide patients with a new oral therapy which may bring differentiated benefits.
Richard Pops, CEO at Alkermes, added:
This collaboration has the potential to provide important benefits to patients with multiple sclerosis and immediately increases the value of ALKS 8700 to Alkermes. Biogen has a broad product portfolio and a highly experienced commercial team. In Biogen’s hands, we believe that patients will have broader and more rapid access to this important medicine. Meanwhile, we will focus our growing commercial capabilities on our expanding portfolio of medicines in psychiatry, including addiction, schizophrenia and depression.
Shares of Alkermes were about 5% at $53.72 in early trading Monday, with a consensus analyst price target of $60.33 and a 52-week range of $46.43 to $63.40.
Biogen shares traded at $309.20, in a 52-week range of $244.28 to $348.84. The consensus price target is $357.53.