MEI Pharma Inc (NASDAQ: MEIP)
MEI Pharma is having an incredibly strong day in the market today, and for good reason. Early this morning, the company announced that it has entered into a key development and commercialization agreement. Today, we’ll talk about the details of the agreement, how the stock reacted to the news, and what we can expect to see from MEIP moving forward. So, let’s get right to it…
MEIP Enters Key Commercialization & Development Agreement
As mentioned above, MEI Pharma is having an incredibly strong day in the market today after announcing that it has entered into an agreement with Helsinn, a Swiss pharmaceutical group with a core focus on developing quality cancer care products. The agreement surrounds Pracinostat.
Pracinostat is a drug candidate that MEIP created for the treatment of acute myeloid leukemia as well as other indications. The treatment is ready to move into phase 3 trials and has proven to be overwhelmingly promising in recent studies.
Under the agreement, Helsinn will have excluseve worldwide rights to the treatment including both manufacturing and commercialization rights. In return, the company will cover the full cost associated with global development. On top of that, MEIP will receive near-term payments of $20 million. $15 million will be paid up front, while $5 million will be paid upon the dosing of the first patient in the upcoming Phase 3 trial. On top of the $20 million, the company has agreed to pay additional payments of to $444 million based on development, regulatory, and sales-based milestones. Finally, MEIP will receive tiered royalty payments in selected territories. In a statement, Riccardo Braglia, Vice Chairman and CEO at Helsinn had the following to say…
“Helsinn is delighted to be entering into this agreement with MEI Pharma for the exclusive rights to Pracinostat, a promising late-stage novel asset. In the first instance we will target acute myeloid leukemia, an area of hug unmet medical need. As part of the development, we will also target additional indications. Helsinn is committed to helping people to survive cancer and offer a better quality of living with cancer.”
The above statement was followed up by Daniel P. Gold, Ph.D., President and CEO at MEIP. Here’s what he had to say…
“Helsinn is an ideal strategic partner to entrust the development of Pracinostat… Helsinn has a strong commercial presence in the United States and, globally, has been able to create and skillfully coordinate a solid and significant network of 70 commercial parters in 90 countries. Helsinn’s antiemitc, Aloxi is a market leader and is often used by patients receiving azacitidine, so their commercial organization is well positioned to market Pracinostat for the treatment of AML and MDS. Helsinn shares our enthusiasm for bringing Pracinostat to patients in need, and we look forward to a successful partnership for the development of the program.
Including MDS along with AML in the development plans was a critical component to this deal, as it significantly increases the market opportunity for Pracinostat. With this agreement in place, we are now in a great position to move forward with this Phase III study in AML, optimize the development path in MDS, and maintain lucrative economics on future commercial success.”
How The Stock Reacted To The News
As investors, one of the first things that we learn is that the news moves the market. Obviously, the news that was released with regard to MEI Pharma today was overwhelmingly positive. As a result, we saw strong gains in the value of the stock. By the end of the trading session, MEIP climbed $0.45 per share or 27.95% to close the session off at $2.06 per share.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from MEIP. Previous studies of Pracinostat have been overwhelmingly positive. So, I’m expecting to see further positivity out of Phase III. With the new agreement in place, MEI Pharma is no well positioned to bring this treatment to the market. All in all, things are going overwhelmingly well for the company.
What Do You Think?
Where do you think MEIP is headed moving forward? Join the discussion in the comments below!