(Alliance News) - Mereo BioPharma Group PLC shares surged on Monday, after the company sealed a development & commercialisation licensing agreement with Massachusetts-based Oncologie Inc for the navicixizumab ovarian cancer treatment drug.
Shares in the company climbed 33% to 43.75p in London on Monday.
As part of the agreement, Mereo will receive USD4 million upfront, and in exchange, Oncologie will receive an exclusive worldwide license to develop and commercialise navicixizumab. London-based Mereo could receive another USD2 million, subject to the passing of chemistry, manufacturing & controls milestones, the biopharmaceutical firm said.
What's more, Mereo could be entitled to a further USD300 million related to commercial milestones.
Mereo said: "Oncologie will be responsible for all future research, development and commercialization of navicixizumab. Additionally, Mereo will be eligible to receive up to USD300 million in future clinical, regulatory and commercial milestones, tiered royalties ranging from the mid-single-digit to sub-teen percentages on global annual net sales of navicixizumab, as well as a negotiated percentage of sublicensing revenues from certain sublicensees."
In October, navicixizumab was given fast track designation in the US by the Food & Drug Administration as a treatment for heavily pretreated ovarian cancer.
Mereo acquired navicixizumab in its April merger with OncoMed Pharmaceuticals Inc.
"We believe Oncologie is expertly positioned to further advance navicixizumab through clinical development and towards potential commercialisation.
"While we believe navicixizumab is an exciting oncology asset, we continue to focus our primary efforts on the development of our innovative rare disease portfolio including our lead product candidate setrusumab for the treatment of osteogenesis imperfecta, which continues to advance towards a pivotal phase 3 pediatric study."
In November, Mereo unveiled promising results from a study on setrusumab, a drug for the treatment of bone disease osteogenesis imperfecta. The study met both its primary and secondary endpoints.
By Eric Cunha; ericcunha@alliancenews.com
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