Coronado Biosciences Jumps on Agreement with NeuPharma - Analyst Blog

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Coronado Biosciences, Inc.CNDO was up 30.8% after it announced an exclusive worldwide license agreement with NeuPharma, Inc. to develop and commercialize novel irreversible and third generation epidermal growth factor receptor (EGFR) inhibitors outside certain Asian countries.

NeuPharma has a portfolio of third generation inhibitors with the most advanced candidate expected to enter into phase I studies in the first half of 2016. The program is currently in pre-clinical stage.

As per the terms of the agreement, Coronado will make an upfront licensing fee payment to NeuPharma. Additionally, NeuPharma will be eligible to receive development and sales-based milestone payments and a tiered single digit royalty on net sales.

Meanwhile, Coronado Biosciences also announced the formation of a new development stage oncology company, Mustang Therapeutics, Inc. Mustang Therapeutics will initially focus on the preclinical and clinical development, as well as commercialization of the proprietary Chimeric Antigen Receptor (CAR-T) technology.

Our Take

We are positive on Coronado Biosciences' deal with NeuPharma, given that the third generation EGFR inhibitors have demonstrated clear activity in patients with non-small cell lung cancer carrying specific EGFR mutations while avoiding the toxicity seen with first and second generation inhibitors. The deal is in line with Coronado Biosciences' growth strategy using approaches including licensing, joint venture and partnerships among others. Last year, Coronado formed a subsidiary, Journey Medical Corporation, to acquire and license dermatology products.

Coronado Biosciences currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Affymetrix Inc. AFFX and Cytokinetics, Incorporated CYTK and Lannett Company, Inc. LCI . All three carry a Zacks Rank #1 (Strong Buy).

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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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