MEI Pharma (MEIP) Stock Rockets On Collaboration Agreement

MEI Pharma MEIP Stock News

MEI Pharma Inc (NASDAQ: MEIP) is running for the top in the market this morning, trading on gains of around 75% early on. The gains come after the company announced that it has entered a collaboration agreement and will receive an upfront payment of $100 million. Here’s what’s happening:

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MEIP Stock Is Flying On A New Collaboration

In the press release, MEI Pharma said that it has entered an agreement with Kyowa Kirin Co., Ltd. The agreement is a global license, development, and commercialization agreement surrounding ME-401.

ME-401 is an oral, once-daily, investigational drug candidate that is being developed by MEIP for the treatment of B-cell malignancies. Under the terms of the new agreement, the two companies will now co-develop and co-promote ME-401 in the United States.

Moreover, the company said that Kyowa Kirin has received the exclusive commercialization rights to the potential cancer treatment outside of the United States.

At the moment, ME-401 is the subject of an ongoing Phase 2 clinical trial in patients with relapsed or refractory follicular lymphoma. Should all go well with the study, the results may support an accelerated approval within the United States.

There are also ongoing Phase 1 and Phase 1 b clinical studies centered around the treatment as a potential option for cancer patients.

As part of the agreement, MEIP said that it will receive an upfront payment of $100 million. The company is also eligible to receive up to $582.5 million in potential milestone payments. Once approved, the companies have agreed to share costs and profits on a 50-50 basis in the United States. Outside of the United States, Kyowa Kirin will be in charge of development and pay prenegotiated tiered royalties on sales.

In a statement, David M. Urso, J.D., COO and General Counsel at MEIP, had the following to offer:

This global partnership with Kyowa Kirin is a key step to achieving our goal of broadly developing and commercializing ME-401, optimizing the opportunity to benefit patients across multiple B-cell malignancies inside and outside the U.S., and also building value for our shareholders. The decision to expand our alliance with Kyowa Kirin is based on the successful relationship we’ve built working together to date under our 2018 Japan license agreement, and the respect we have for Kyowa Kirin and their ability to jointly execute our shared vision of ME-401 in the U.S. and around the world.

This Is Very Exciting News

At the end of the day, this news is huge for MEI Pharma. The upfront payment involved in this agreement is about equal to the company’s market cap as of the close of business yesterday. Of course, that market cap has skyrocketed this morning.

Moreover, there is the potential for quite a bit of money to come down the line in the future. Not only is there potential for more than $500 million in milestone payments, 50% of US sales and tiered royalties outside of the US could prove to be the goose that lays the golden eggs.

The bottom line here is that this agreement drives funds and opens up doors for MEIP, making the stock hard to ignore!

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