Regulus Therapeutics Inc. (NASDAQ: RGLS) shares shot up on Tuesday after the company announced that it had amended and restructured its collaboration and license agreement with Sanofi.
Under the terms of the amendment, Regulus has granted Sanofi a worldwide exclusive license to develop and commercialize its investigational drug targeting miR-21 for all indications, including Alport syndrome. Under the amendment, Sanofi will assume all future costs and development activities associated with the advancement of RG-012, currently in Phase 2 for Alport syndrome.
Separately, Regulus is eligible to receive roughly $7 million in upfront and material transfer payments. It is also eligible to receive up to $40 million in development milestone payments. Additionally, Sanofi will reimburse Regulus for certain out-of-pocket transition activities and assume Regulus’s upstream license royalty obligations.
While $7 million might not seem like a lot of cash in the grand scheme, Regulus only has a market cap of just over $16 million. With this deal, Regulus could see explosive growth from Sanofi’s payments.
Jay Hagan, president and CEO of Regulus, commented:
We are pleased with Sanofi’s election to assume ongoing and future development of the RG-012 program in order to apply their expertise in rare diseases and to bring it forward as a potential new therapy for patients with Alport syndrome. We look forward to a rapid transition of the program to Sanofi and their ongoing clinical development, while we continue to focus on our stated near-term objectives. Specifically, we believe this restructuring will improve our net cash position, yielding near term cash proceeds, eliminating RG-012-related spend over the next several years, and will enable us to focus our resources on our other promising programs targeting significant unmet medical needs in Autosomal Dominant Polycystic Kidney Disease and Hepatitis B virus.
Shares of Regulus were up about 18% to $2.22 just after the opening bell. The consensus analyst price target is $3.62, and the 52-week trading range is $1.71 to $17.28.