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Affimed (AFMD) Surges on Collaboration Contract with Roche (revised)

Shares of Affimed Inc.AFMD were up a massive 246.8% post announcement of a cancer collaboration agreement with Roche Holding's RHHBY subsidiary, Genentech, on Monday Aug 27.

In fact, the stock has skyrocketed 327% year to date, comprehensively outperforming the industry's increase of 2.4%.

Both companies have entered into a strategic collaboration deal to commercialize and develop a host of immunotherapeutic treatments for multiple cancers.

Financial Details of the Deal

Per the terms of the contract, Affimed will receive an upfront payment of $96 million with potential for an additional $5 billion in milestone payments and royalties on sale. The transaction is expected to close in the third quarter of 2018, subject customary closing conditions and a clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

Other Details

Affimed will discover and advance innate immune cell engager-based immunotherapeutics of interest to Genentech, using its proprietary Redirected Optimized Cell Killing platform, which utilizes both NK cells (natural killer cells) and T-cells.

The agreement will include other pipeline candidates from Affimed's ROCK platform, which are under evaluation for multiple solid and hematologic tumors. While Affimed and Genentech will carry out early-stage and late-stage research phases, Genentech will be solely responsible for clinical development and commercialization worldwide.

The transaction looks to be a strategic fit for Affimed as it will boost its cashflow to a great extent. The influx of $96 million will be a great drive for the company. Moreover, Affimed has potential back load of milestone payments worth $5 billion. Hence, the company will not need to raise cash.

Affimed N.V. Price and Consensus

Affimed N.V. Price and Consensus | Affimed N.V. Quote

Zacks Rank & Stocks to Consider

Affimed currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the pharma sector are Illumina, Inc. ILMN and Gilead Sciences, Inc. GILD , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Illumina's earnings estimates have been raised 12.1% for 2018 and 10% for 2019 over the past 60 days. The stock has soared 57.8% so far this year.

Gilead Sciences' earnings estimates have been moved 7.5% north for 2018 and 1.9% for 2019 over the past 60 days. The stock has gained 4.6% year to date.

(We are reissuing this article to correct a mistake. The original article, issued August 29, 2018, should no longer be relied upon.)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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