Kalvista Pharmaceuticals Inc.
Shares of Kalvista Pharmaceuticals (NASDAQ:KALV) gained 38.64% after the clinical-stage pharmaceutical company unveiled a collaboration pact with Merck & Co., Inc. (NYSE:MRK). The two companies have joined forces to accelerate the development of KVD001, a novel intravitreal (IVT) injection candidate for the treatment of diabetic macular edema.
Investors had initially pushed the stock up 116% to $16 in premarket trading, before it dropped to end Tuesday’s trading session at $10.19 a share. The stock is currently rated as a ‘strong buy’ by one investment firm according to data compiled By Zacks Research.
The Merck deal has strengthened investor’s confidence on the stock as most believe it has the potential to accelerate the development of the company’s pipeline. Under the terms of the deal, Merck is entitled to certain rights including an option to acquire KVDOO1 after the completion of the Phase 2 proof of concept.
Kalvista Pharmaceuticals Inc. (NASDAQ:KALV) has also granted the global healthcare company an option to acquire certain orally delivered molecules for DME that the company will continue to develop as part of R&D activities. The company is to retain full rights to its oral hereditary angioedema portfolio. It will also have the opportunity to select and develop other oral HAE portfolio.
“We have always believed that development and commercialization of our DME therapies would require the resources of a large pharmaceutical company, and we believe Merck has the wherewithal and resources to help us advance the development of our DME drug candidates. Importantly for Kalvista, this collaboration also meets our strategic objectives,” said CEO Andrew Crockett.
KALV Stake Acquisition
Merck is to pay Kalvista a $37 million non-refundable upfront fee as part of the pact. Kalvista Pharmaceuticals Inc. (NASDAQ:KALV) is also entitled to milestone payments that could total as much as $715 million. The Cambridge, MA-based firm is also eligible to royalty payments on net sales of any therapeutic candidates commercialized under the agreement
In addition, KalVista has agreed to a $9.1 million private placement transaction with Merck. Under the deal, the pharmaceutical company is to acquire 1.1 million shares of Kalvista at a price of $8.50 a share, representing a 9.9% ownership stake.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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