BeiGene Ltd (NASDAQ:BGNE) shares recently rose by as much as 16% during pre-market trading after the Biopharmaceutical company announced that it has reached an agreement with Celgene Corp (NASDAQ:CELG) to develop and sell a research for a tumor cancer treatment. The deal is expected to be finished during the third quarter of the year.
BeiGene will be paid $263 million in upfront license fees and $150 million in equity investment while Celgene will acquire 5.9% of BeiGene shares at $4.58 each which means that the company will receive around 32 million BeiGene shares. BeiGene will also be eligible in receiving development, regulatory, and sales milestone payments worth $980 million.
The deal would allow the two companies to work together in developing and commercializing BeiGene BGB-A317 cancer drug for solid tumor cancers for the most parts of the world. Although most of the rights for the drug under development and commercialization will be kept by BeiGene.
Most investors and analysts commented on the agreement and stated that that deal would be good for the company as it will allow BeiGene to make money as one of the biggest players in the cancer field.
The agreement includes BeiGene acquiring the commercial operations of Celgene China and getting an exclusive license for China-approved Celgene drugs. On the other hand, BeiGene in preparation for the possible approvals of the BGB-A317 drug and other innovative therapies in the future currently has plans to expand its manufacturing and commercial operations in China.
The BGB-A317 is an advanced clinical-stage investigational tumor cancer treatment. It is also classified as a type of antibody belonging in the immuno-oncology agent class known as immune checkpoint inhibitors.
According to the two companies, the treatment has been tested in more than 500 patients. The test has reportedly revealed initial clinical data that suggests that the drug is being well tolerated and showed an anti-tumor activity across a range of solid tumor types. BeiGene is also testing out the BGB-A317 with their experimental PARP inhibitor BGB-290. Celgene, on the other hand, has partnered with seven other clinical-phase solid tumor candidates that will further the study.
After closing around Wednesday at $52.27, shares of the biopharmaceutical company rallied by 12.6% during Thursday’s pre-market trading and has jumped by almost 30% at an all-time high of $68.67 during Thursday’s afternoon trading. BeiGene shares have risen by 72% this year.