Shares of Myovant Sciences rose 27% on Monday after its parent Sumitovant Biopharma entered into an agreement with Pfizer Inc. unveiled to jointly develop a treatment for prostate cancer and women’s health in a deal worth up to $ 4.2 billion in advance and potential milestone payments.
Myovant MYOV,
will receive a $ 650 million prepayment for the development and marketing of relugolix, a single, oral gonadotropin-releasing hormone (GnRH) receptor antagonist, which was approved by the U.S. Food and Drug Administration in December as a treatment for advanced prostate cancer .
If approved, the two companies will also develop and market a combination tablet relugolix (relugolix 40 mg, estradiol 1.0 mg and norethindrone acetate 0.5 mg) aimed at the health of women in the US and Canada. They will start promoting the treatment, which will be sold as Orgovyx, in early 2021 as a treatment for prostate cancer.
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The companies will share profits and certain costs equally, while Myovant will generate revenue. Myovant will also be responsible for interactions with the regulator and for the provision of drugs and clinical development. The company is entitled to $ 200 million potential regulatory milestones for FDA approvals for the relugolix combination tablet in women’s health, and a low level of sales milestones when it reaches $ 2.5 billion in net sales for prostate cancer and health guidelines for women reach.
“There is still a great unmet need among the millions of women experiencing the common and debilitating symptoms associated with fibroids and endometriosis in the womb,” said Nick Lagunowich, global president, Pfizer Internal Medicine PFE.
.
Josh Schimmer, an analyst at Evercore, said the deal was positive for Myovant.
“After a while of digesting it, we like it,” Schimmer wrote in a note to customers. “While it gives up half of relugolix’s economy (which we did not model), it is adequately compensated by adding the commercial efforts of PFE as well as the billions of milestones we think are achievable.”
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He reiterates his superiority over the $ 55 price target and the $ 55 price target, saying the stock is one of its best mid-cap stocks.
“Investors were concerned that Sumitomo’s majority stake in MYOV would limit strategic partners,” he said. “This agreement adds another strong company with potentially valuable synergies.”
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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 common causes among men, besides skin cancer. It is estimated that 191,930 men are diagnosed with the disease, of which about 60% are older than 65.
Myovant shares rose 84% in 2020, while the SPDR S&P Biotech ETF XBI,
achieved 57% and the S&P 500 SPX,
achieved 16%.