Proteostasis Therapeutics Inc. (NASDAQ: PTI) shares jumped on Monday after the company announced that a new licensing agreement. Some of the details were disclosed but the full financial terms, the therapeutic target and disease areas of focus were not disclosed.
Specifically, the company announced a worldwide, exclusive license agreement with Genentech, a member of the Roche Group, for rights to potential therapeutic small molecule modulators of an undisclosed target within the Proteostasis network.
The important distinction to make is that this agreement does not include cystic fibrosis transmembrane conductance regulator modulators and is unrelated to Proteostasis’s investigational medicines or other ongoing research programs in cystic fibrosis.
Under the terms of the agreement, in exchange for rights to these small molecule modulators, Proteostasis is eligible to receive upfront and milestone payments of over $100 million. Additionally, Proteostasis is eligible to receive tiered royalties on sales of medicines resulting from the license agreement. Genentech is responsible for all further research and development expenses related to the program.
Note that Proteostasis only has a market cap of roughly $254 million. Also, the stock is up 113% in the past quarter alone, although it is down 17.5% year to date.
Meenu Chhabra, president and CEO of Proteostasis, commented:
We are thrilled to enter into this agreement with Genentech, an industry leader with a proven record of success in small molecule research and development. PTI’s platform revolves around the modulation of protein homeostasis pathways within the cell, either restoring its normal state or enhancing its capacity to control or delay the progression of disease. We look forward to working with Genentech to leverage discoveries from this platform to potentially address unmet medical needs.
Shares of Proteostasis were last seen up over 8% at $5.23, with a consensus analyst price target of $13.80. The stock has a 52-week trading range of $1.71 to $10.38.
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