NewLink-Roche Ink Deal for Oncology Candidate Development
NewLink Genetics Corporation (NLNK) announced that it has signed an exclusive worldwide license agreement with Genentech, a subsidiary of Roche (RHHBY), for the development of its oncology candidate NLG919. NLG919, an IDO inhibitor, is in phase I development for the treatment of patients suffering from recurrent advanced solid tumors.
Additionally, the companies will also collaborate for the discovery of next generation IDO/TDO pathway inhibitor compounds.
Terms of the Deal
While NewLink will focus on the development of NLG919 based on the HyperAcute vaccine platform, Roche will bear the costs associated with research, development, manufacturing and commercialization of NLG919. Roche will provide additional research funding to NewLink to support the IDO/TDO research collaboration.
NewLink will receive an upfront payment of $150 million from Roche apart from milestone payments of more than $1 billion upon the achievement of certain predetermined milestones. Additionally, the company will receive escalating double-digit royalties on the sales of multiple products by Roche.
NewLink retains the option for co-promotion rights for NLG919 and potential next generation IDO/TDO compounds in the U.S.
Our Take
We are positive on NewLink’s agreement with Roche. The agreement should be beneficial for NewLink, which is gaining a strong partner in the form of Roche, a company with commercial leadership and expertise in the field of oncology.
The terms of the deal also look favorable – costs associated with the development of NLG919 will be borne by Roche. This will accelerate and expand development of NLG919 and also provide NewLink with funds in the form of an upfront payment and milestone payments. NewLink’s shares were up 7.1% on the agreement.
NewLink carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the biotech sector are Halozyme Therapeutics, Inc. (HALO) and Medivation, Inc. (MDVN). Both carry a Zacks Rank #1 (Strong Buy).
Read the Full Research Report on RHHBY
Read the Full Research Report on NLNK
Read the Full Research Report on MDVN
Read the Full Research Report on HALO
Zacks Investment Research
