Why Axovant Shares More Than Doubled

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Axovant Sciences Ltd. (NASDAQ: AXON) shares more than doubled early on Wednesday after the company announced a new licensing agreement. The firm said it has licensed the exclusive worldwide rights to develop and commercialize OXB-102, now AXO-Lenti-PD, from Oxford BioMedica.

AXO-Lenti-PD is an investigational gene therapy for Parkinson’s disease that delivers three genes encoding a critical set of enzymes required for dopamine synthesis in the brain. And Oxford BioMedica is a world leader in lentiviral vector product development and manufacturing, and it will be the clinical and commercial supplier of AXO-Lenti-PD.

Axovant expects to initiate a Phase 1/2 dose escalation study of AXO-Lenti-PD in patients with advanced Parkinson’s disease by the end of 2018.

Under the terms of the agreement, Axovant obtained rights to AXO-Lenti-PD, as well as its predecessor product, ProSavin, for an initial payment of $30 million in cash, $5 million of which will be applied as a credit against the process development work and clinical supply that Oxford BioMedica will provide to Axovant.

Oxford BioMedica is also eligible to receive additional development, regulatory and commercial milestone payments, potentially in excess of $812 million, and tiered royalties on net sales of AXO-Lenti-PD, if approved. Roivant has agreed to purchase $25 million of Axovant common shares, which will support the clinical development of AXO-Lenti-PD and additional business development activities.

Pavan Cheruvu, M.D., CEO of Axovant, commented:

Axovant remains committed to developing innovative treatments for serious neurodegenerative conditions such as Parkinson’s disease, and we are excited to partner with Oxford BioMedica, a recognized global leader in cell and gene therapy. We are also pleased to welcome Fraser to our leadership team. He brings over two decades of experience in gene therapy manufacturing, and will be committed to building world-class gene therapy capabilities at Axovant. We will continue to pursue promising new therapeutic approaches based on transformative science, and will further expand our pipeline with high-quality assets like AXO-Lenti-PD. This is part of our long-term goal of building Axovant into a leader in the development and commercialization of innovative new medicines for neurological indications.

Shares of Axovant were last seen up about 115% at $3.75, with a consensus analyst price target of $11.14 and a 52-week range of $1.02 to $27.98.