Shares of Axovant Sciences AXON gained 160%, after the company announced that it has licensed the exclusive worldwide rights to develop and commercialize AXO-LentiPD from Oxford BioMedica for Parkinsons' disease.
AXO-LentiPD, formerly OXB-102, is an experimental gene therapy being developed for Parkinson's disease, which delivers three genes encoding a critical set of enzymes required for dopamine synthesis in the brain.
Axovant plans to initiate a phase I/II dose escalation study on AXO-LentiPD in patients with advanced Parkinson's disease, by the end of 2018.
Per the terms of the agreement, Axovant will make an initial payment of $30 million in cash to obtain rights to AXO-Lenti-PD, as well as its predecessor product, ProSavin. Out of the $30 million, $5 million is applied as a credit against the process development work and clinical supply that Oxford BioMedica will provide to Axovant. We note that Oxford BioMedica had successfully completed a phase I/II study for ProSavin, which met its primary endpoint.
In addition, Oxford BioMedica will also be entitled to receive additional development, regulatory, and commercial milestone payments, potentially in excess of $812 million and tiered royalties on net sales of AXO-Lenti-PD, if approved.
Meanwhile, Axovant will receive $25 million equity financing from Roivant Sciences to support clinical development of AXO-Lenti-PD and additional business development. The company also got a new chief technology officer, Fraser Wright, who was the co-founder and former chief technology officer at Spark Therapeutics ONCE .
The news comes as a major relief for the shareholders, who have bore brunt of the significant decline in share price, earlier in 2018. Axovant's stock has lost 9.4% in the last six months compared with the industry 's decline of 5.7%.
Shares plunged massively in January 2018, after the company announced disappointing results on its lead pipeline candidate, intepirdine. The candidate failed to meet the primary efficacy endpoints in studies that were conducted in patients with dementia with Lewy bodies ("DLB"), and patients with dementia and gait impairment.
Based on this, Axovant decided to discontinue the development of intepirdine. Thereafter, chief executive officer, David Hung, resigned. Last year in September, the company had said that intepirdine failed to meet its co-primary efficacy endpoints in a late-stage study, conducted in mild to moderate Alzheimer's disease patients.
Gene therapy has gained a lot of attention, of late. Earlier in 2018, Novartis NVS announced a licensing agreement with Spark Therapeutics, covering development, registration and commercialization rights to voretigene neparvovec outside the United States.
Voretigene neparvovec was approved by the FDA in December 2017, under the brand name Luxturna, as one-time gene therapy to restore functional vision in children and adult patients with biallelic mutations of the RPE65 (retinal pigment epithelial 65 kDa protein) gene.
uniQure QURE is another gene therapy company, which is advancing a pipeline of proprietary and partnered gene therapies to treat patients with liver/metabolic, central nervous system and cardiovascular diseases.
Axovant carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Novartis AG (NVS): Free Stock Analysis Report Spark Therapeutics, Inc. (ONCE): Free Stock Analysis Report Axovant Sciences Ltd. (AXON): Free Stock Analysis Report uniQure N.V. (QURE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research