Concert Pharmaceuticals Inc (NASDAQ:CNCE) shares surged more than 40% in the US after saying Vertex Pharmaceuticals Inc (NASDAQ:VRTX) is buying its cystic fibrosis treatment CTP-656 and other assets for $250mln.
Vertex will pay $160mln in cash for the selling rights and development of CTP-656 once the deal has been completed. CTP-656 is currently in phase II trials with data expected by the end of the year.
If the treatment receives regulatory approval in the US and is accepted for reimbursement in the UK, Germany or France, then Vertex will provide up to a further $90mln in milestone payments.
“I am very pleased that Vertex intends to integrate CTP-656 within their portfolio of investigational and approved cystic fibrosis medicines,” said Concert chief executive and president Roger Tung. ”We believe this agreement provides the optimal pathway to broadly and rapidly advance the development of CTP-656 for patients.”
Alongside the announcement, Concert reported a 2016 loss of $507mln, compared to earnings of $24.2mln a year earlier.
Revenue plunged to $174,000 from $66.7mln the prior year when it was bolstered by a one-time $50.2mln change of control payment from Auspex Pharma. The change of control payment came after Auspex was acquired by Teva Pharmaceuticals in 2015 and was part of a patent assignment agreement between Concert and Auspex.
Research and development expenses rose to $37.0mln in 2016 from $28.9mln the prior year, due to the costs associated with CTP-656 and its treatment for spot baldness CTP-543.
Concert expects to have enough cash to fund operations through the second quarter of 2018. The group finished 2016 with $96.2 mln in cash and cash equivalents, compared to $142.2mln at the end of 2015.
Shares in Concert jumped 41.97% to $13.70 each in early US trading. Vertex shares fell 0.29% to $89.85.
Story by ProactiveInvestors