Shares of Myovant Sciences rose 27% on Monday, after its parent Sumitovant Biopharma unveiled an agreement with Pfizer Inc. to jointly develop prostate cancer and a treatment for women’s health, including The deal took place $ 4.2 billion in upfront and potential milestone payments.
Develop and market relugolix will receive an upfront payment of $ 650 million for the once-daily, oral gonadotropin-releasing hormone (GnRH) receptor antagonist, which received approval from the US Food and Drug Administration in December to treat advanced prostate cancer. did.
If approved, the two companies will also develop and market relugolix combination tablets (relugolix 40 mg, estradiol 1.0 mg, and norethindrone acetate 0.5 mg) targeting the health of women in the US and Canada. They will begin to co-promote the treatment, which will be sold in early 2021 as a treatment for prostate cancer as Orgovyx.
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Companies will share profits and some costs equally, while MyoVent will record revenue. Myovant will also be responsible for interactions with the regulator and for drug supply and clinical development. The company will be entitled to $ 200 million in potential regulatory milestones for FDA approval for relugolix combination tablets in women’s health, and sales milestones when it reaches $ 2.5 billion in net sales for prostate cancer and women’s health testing Will encourage
Nick Lagunovich, global president of Pfizer Internal Medicine FEF, said, “One in a million women continue to be abused who experience common and debilitating symptoms associated with uterine fibroids and endometriosis.”
Evercore analyst Josh Shimer said the deal was positive for MyoVent.
“Having some time to digest it, we like it,” Shimmer wrote in a note to customers. “While this leaves half the economics of relugolix (which we did not modeling), that is sufficiently offset by the commercial efforts of the PFE as well as adding billions of milestones that we think are achievable is.”
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He reiterated his superior rating on the stock and the $ 55 price target, stating that the stock is one of his stop mid-cap pics.
“Investors were concerned that Sumitomo’s multinational stake might limit strategic partners down the road,” he said. “This deal adds another strong company with potentially valuable synergy.”
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Myovant is one of five companies under the Sumitovant umbrella.
According to Cancer.net, prostate cancer is one of the most frequent observations in men other than skin cancer. An estimated 191,930 men will be diagnosed with the disease this year, of which around 60% will be over 65.
Myovant shares have increased 84% in 2020, while SPDR S & P Biotech ETF XBI,
57% and S&P 500 SPX,