Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) has signed a cooperation agreement with US biotechnology company Mersana Therapeutics Inc. for marketing rights to Mersana's cancer drug. Teva will pay up to $334 million, subject to the meeting of all development, regulatory and commercial milestones, for global marketing rights to XMT-1107, a molecule that is a long-acting treatment for various cancers.
Cambridge, Massachussetts-based Mersana plans to begin a Phase I clinical trial of XMT-1107 in the second quarter of the year.
Teva will also pay Mersana royalties on future sales of the drug, if any. Teva will pay all development costs of the drug, except in Japan, where Mersana retains full commercial rights.
XMT-1107 aims to compete against Roche AG's (SWX: RO) Avastin and Pfizer Inc's (NYSE: PFE; LSE: PFZ) Sutent.
Leader Capital Markets analyst Yoav Burgan said, "This is another milestone in Teva's strategic plan to develop a pipeline of brand drugs. Teva's primary objective is to reduce its dependence on Copaxone over time and to gradually change its business mix toward brand drugs. This looks like an interesting step, and for Teva, the amounts are standard and reasonable." He gives Teva a "Buy" recommendation with a target price of $67.
Teva's share closed at $63.17 on Nasdaq yesterday, giving a market cap of $56 billion. The share price fell 0.9% by mid-afternoon on the TASE today to NIS 231.80.
Published by Globes [online], Israel business news - www.globes-online.com - on April 13, 2010
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