Shares in junior biotech company Starpharma Holdings Ltd (ASX: SPL) are up more than 63% after the firm announced a collaboration and license agreement with major drug company Genentech, which could lead to success payments of up to US$564 million.
Starpharma will work with Genentech, which is part of the Roche Group, on potential cancer therapies, to be developed using its proprietary DEP drug delivery technology.
Starpharma specialises in "dendrimer" technology, which involves manufacturing nanoscale molecules for use in pharmaceutical applications, as it explains on its website.
To construct dendrimers, Starpharma utilises a process of adding successive layers, or 'generations', of the amino acid lysine around a central core. This amino acid composition yields advantages such as making them biocompatible and biodegradable. Through this process, the physical and chemical properties of the dendrimers can be precisely controlled and tailored to meet specific requirements for various medical, pharmaceutical, and other applications.
Starpharma Chief Executive Officer Cheryl Maley said in a statement to the ASX on Monday that Starpharma and Genentech had already been working together over the past three years, and this new agreement would build on that relationship.
Genentech's world-class scientific expertise makes them an ideal collaborator, and we look forward to working together to improve patient outcomes and realise the advantages presented by Starpharma's DEP technology platform.
Image source: Getty Images
Major milestone payments possible
Under the agreement, Starpharma will receive an upfront payment of US$5.5 million and is eligible to receive up to US$564 million in success-based payments at specified development, regulatory, and commercial milestones.
In addition to this amount, Starpharma is eligible for tiered royalties on global net sales of products resulting from the collaboration.
Starpharma has granted Genentech an exclusive worldwide licence to commercialise products resulting from the collaboration.
Ms Maley said the two companies were confident of executing well, given their three years of experience working together.
A key strategic priority for Starpharma is to build new, high-impact partnerships that unlock the full potential of our DEP platform. By actively pursuing licensing opportunities and collaborating with leading organisations, we aim to expand market reach and enable our partners to deliver significantly improved therapies to patients worldwide.
By noon on Monday, more than 15 million Starpharma shares had been traded, compared with the usual daily trade volume of 388,309.
The stock is changing hands for 21.2 cents, up 63.5%, after hitting a high of 25 cents in early trade.
