Jounce Therapeutics Inc. (NASDAQ: JNCE) shares jumped on Wednesday after the company announced an update on its strategic collaboration with Celgene Corp. (NASDAQ: CELG). This collaboration was originally established in July of 2016.
Under the terms of a new license agreement, Celgene has licensed worldwide rights to JTX-8064. Jounce retains full worldwide rights to its pipeline beyond JTX-8064, including vopratelimab, JTX-4014 and all discovery programs, as Jounce and Celgene also have entered into a mutual agreement to terminate their original strategic collaboration agreement.
Also as per the new agreement for JTX-8064, Jounce receives a $50.0 million non-refundable license fee and is eligible to receive from Celgene up to $480 million in development, regulatory and commercial milestone payments, as well as royalties on potential worldwide sales. Celgene will be responsible for all development and commercialization of JTX-8064.
As a result of the changes to the Celgene strategic collaboration, Jounce now expects to record $50.0 million in cash revenue in 2019 related to the license of JTX-8064 and roughly $98.0 million in non-cash revenue in 2019 representing the remaining recognition of the upfront payment received in July 2016.
Richard Murray, Ph.D., CEO and president of Jounce, commented:
The discovery and development of JTX-8064 showcases the strength of our translational science platform, validating our approach to discovering novel immunotherapies for patients in need. We look forward to the advancement of JTX-8064 by Celgene. Most importantly, we retain full global rights to all of our other programs, including vopratelimab, giving Jounce greater flexibility to create value for patients and shareholders moving forward. In addition to our ongoing clinical development programs, we are also poised to expand our broader pipeline and advance additional novel immunotherapy programs based on our translational science platform.
Shares of Jounce were last seen up about 20% at $4.90, in a 52-week range of $2.66 to $8.57. The consensus price target is $12.50.
Celgene traded at $89.65 a share, in a 52-week range of $58.59 to $98.97. The consensus price target is $97.38.
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