) recently entered into a drug discovery collaboration with
privately-held RQx Pharmaceuticals, Inc. through its wholly-owned
The collaboration is primarily for the discovery and
development of novel drug compounds for an undisclosed
As per the collaboration agreement, RQx will receive an
upfront payment along with being entitled to receive research and
development milestone payments for $111 million.
Additionally, RQx will also receive royalties on sales of
products resulting from the collaboration.
RQx develops broad-spectrum small molecule antibiotics to
combat serious life threatening infections including those caused
by multi drug-resistant Gram-negative bacteria.
We note that Genentech is a part of the Pharmaceuticals
Division of the Roche group with its primary focus on oncology
along with immunology, neuroscience, metabolism and infectious
Roche had inked a global licensing agreement with
biotechnology company Afraxis, Inc. in Jan 2013 for developing
candidates for an undisclosed novel target.
The licensing agreement provides Roche with exclusive rights
to develop and commercialize Afraxis' proprietary compounds on a
As per the agreement, Afraxis is eligible for an upfront fee
along with research, development and commercialization milestone
payments totaling $187.5 million.
Roche also obtained approval from the US Food and Drug
Administration (FDA) in Jan 2013 for Avastin (bevacizumab) for a
new indication in metastatic colorectal cancer (mCRC).
We are positive on the current developments at Roche. Roche
carries a Zacks Rank #4 (Sell).
However, other large cap pharma stocks, such as
Eli Lilly and Company
) currently look attractive with a Zacks Rank #2 (Buy).
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