Portola, HealthCare Royalty Partners Ink $150 Million Deal

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Portola Pharmaceuticals, Inc. 's PTLA shares were up 2.7% after the company announced that it has signed a royalty agreement with HealthCare Royalty Partners (HCR), a private investment firm, for $150 million.

A look at Portola's share price movement over the past one year shows that the stock has underperformed the Zacks classified Medical-Drugs industry. Specifically, the company's stock increased 0.6% during this period, while the industry gained 2.1%.

Terms of the Agreement

Portola received $50 million on the closing of the agreement. In addition, the company is eligible to receive $100 million upon the U.S. approval of AndexXa (andexanet alfa) in exchange for tiered, mid-single-digit royalty based on worldwide sales.

The agreement is subject to a maximum total royalty payment of 195% of the $150 million funding by HCR.

Portola stated that it will use the proceeds for clinical and regulatory activities, and planned development and commercialization of AndexXa (EU trade name: IndexXa). Note that AndexXa is in development as a potential antidote for Factor Xa inhibitors.

We remind investors in Aug 2016, the FDA issued a complete response letter (CRL) for AndexXa, which was being developed as an antidote for Factor Xa inhibitors, in cases where reversal of anticoagulation is needed due to life-threatening bleeding or when urgent surgery is required. Portola plans to resubmit the biologics license application for AndexXa in the first half of 2017.

Meanwhile, AndexXa is currently under review in the EU. Note that with no currently approved antidote for Factor Xa inhibitors, there is high unmet need for the same in the market.

Interestingly, Portola had been signing collaborations for quite a while now for the potential development of AndexXa. In Dec 2016, the company signed a $50 million loan agreement with Bristol-Myers Squibb Company BMY and Pfizer Inc. PFE , under which Bristol-Myers and Pfizer will each loan Portola $25 million for development and clinical studies on AndexXa.

Going ahead, we expect investor focus to remain on further details on the regulatory aspect of AndexXa.

Portola Pharmaceuticals, Inc. Price and Consensus

Portola Pharmaceuticals, Inc. Price and Consensus | Portola Pharmaceuticals, Inc. Quote

Zacks Rank & Key Picks

Portola currently carries a Zacks Rank #3 (Hold). Sucampo Pharmaceuticals, Inc. SCMP is a better-ranked stock in the health care with a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Sucampo's earnings estimates were stable at $1.22 for 2016 but have increased from $1.58 to $1.74 for 2017 over the last 60 days. The company posted a positive earnings surprise in all of the four trailing quarters with an average beat of 35.5%.

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Bristol-Myers Squibb Company (BMY): Free Stock Analysis Report

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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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