NEW YORK—Shares of Immunomedics Inc. jumped Monday after the biotechnology company licensed its antibody candidate to privately held Nycomed for $40 million upfront and up to $580 million in potential milestone and royalty payments.
The stock rose 21 cents, or 10 percent, to $2.41 in afternoon trading. Shares have traded between $1.92 and $4.58 over the last 52 weeks.
The upfront payment alone marks a massive jump in the company's normal revenue intake. In the company's 2007 fiscal year, which ended in June, Immunomedics had revenue of about $7.9 million. It had less than half that revenue in each of the previous fiscal years.
Under the deal, Morris Plains, N.J.-based Immunomedics will license the antibody veltuzumab to Nycomed, who will initially develop the antibody as a rheumatoid arthritis treatment. The worldwide license covers non-cancer uses.
"Nycomed is the ideal partner for veltuzumab," said Immunomedics President and Chief Executive Cynthia L. Sullivan, in a statement. "We believe their new research and development strategy that focuses on target areas outside of the field of oncology means that Nycomed will vigorously develop the full potential of veltuzumab in the field of autoimmune and inflammatory diseases."
Nycomed is a privately-owned, European developer of medicines for hospitals, specialists and general practitioners. It focuses on gastroenterology, respiratory diseases, inflammation, pain management, osteoporosis and surgical management. The company will be responsible for all costs associated with current and future development of veltuzumab for non-cancer uses.
Meanwhile, Immunomedics will continue funding an ongoing early-to-midstage study of the drug as a treatment for the bleeding disorder immune thrombocytopenic purpura.
