vTv Therapeutics Inc . (NASDAQ:VTVT), a biopharmaceutical company, announced on Monday that its subsidiary vTv Therapeutics LLC has amended its licensing agreement with Newsoara Biopharma Co., Ltd. The amendment, signed on June 26, 2024, enhances the original agreement from May 31, 2018, by upgrading the previously granted license to a global scale.
The updated agreement stipulates that Newsoara will pay an upfront fee of $20 million to vTv LLC. This payment allows Newsoara up to one year from the amendment date to secure the global license rights; if the payment is not made within this timeframe, the amendment will become void.
In addition to the upfront fee, Newsoara is obligated to pay vTv LLC up to $41 million in development milestones and $35 million in sales-related milestones. Furthermore, Newsoara will pay royalties on sales, which are expected to be in the mid to upper single digits, contingent on sales volume.
The specifics of the second amendment to the License Agreement, which detail the expansion of Newsoara's rights and the financial terms, will be included as an exhibit in vTv Therapeutics' forthcoming Quarterly Report on Form 10-Q for the quarter ending June 30, 2024.
This strategic move is significant for vTv Therapeutics, as it potentially broadens the market reach of its pharmaceutical preparations. The agreement with Newsoara, a company that has shown interest in vTv's offerings since 2018, now takes a step further by granting global access under the new terms.
The financial implications for vTv Therapeutics are substantial, with the deal bringing in a sizable upfront fee along with the promise of future milestone payments and royalties. This influx of capital is likely to support the company's ongoing research and development initiatives.
Investors and stakeholders in the pharmaceutical industry may view this expansion as a positive development for vTv Therapeutics, indicating the company's proactive approach to leveraging its intellectual property on a global scale. The information provided is based on a recent SEC filing by the company.
In other recent news, vTv Therapeutics has made significant strides in its diabetes treatment research. The company's drug, cadisegliatin, has been granted Breakthrough Therapy designation by the FDA and has begun pivotal trials. The drug, designed to treat type 1 diabetes, could be a first-in-class oral liver selective glucokinase activator.
The CATT1 trial will assess the drug's efficacy and safety over 12 months in adults with type 1 diabetes. The trial's focus is on reducing the incidence of severe hypoglycemic events, a critical measure for diabetes treatments. Cadisegliatin will also be evaluated as an adjunct therapy to insulin for type 2 diabetes patients in a planned Phase 2 trial in the Middle East.
These are recent developments for vTv Therapeutics, which is also planning to launch a trial to assess cadisegliatin as a treatment for type 2 diabetes. The company's focus remains on developing oral small molecule drug candidates, with cadisegliatin leading its clinical pipeline.
In other recent news, vTv Therapeutics has regained compliance with the Nasdaq Stock Market's minimum market value requirement, ensuring its common stock will continue to be listed on the Nasdaq Capital Market.
InvestingPro Insights
In light of vTv Therapeutics Inc.'s (NASDAQ:VTVT) recent licensing agreement expansion with Newsoara Biopharma, certain financial metrics and InvestingPro Tips provide additional context for investors evaluating the company's prospects. vTv Therapeutics holds more cash than debt on its balance sheet, which could provide financial flexibility for their ongoing research and initiatives. The company has liquid assets that exceed its short-term obligations, indicating a solid position to meet its immediate financial commitments.
Still, investors should note that vTv Therapeutics has not been profitable over the last twelve months, and it suffers from weak gross profit margins, which could impact future financial performance.
While the stock has seen a large price uptick over the last six months, it has fared poorly over the last month, reflecting market volatility or investor reactions to company-specific events. Importantly, vTv Therapeutics does not pay a dividend to shareholders, which is a consideration for those seeking income-generating investments.
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