California-based biotech Cytokinetcs (CYTK -2.29%) finished the trading week in style, as its stock price outperformed many other titles by rising nearly 5% on Friday. News of a fresh licensing deal in a key market abroad was the catalyst for the increase, which well exceeded the slightly over 1% gain of the S&P 500 index.
A beneficial transfer
That morning, Cytokinetics announced that Sanofi has acquired the Greater China development and commercialization rights to aficamten from Chinese healthcare company Corxel. This is a drug targeting heart disease hypertrophic cardiomyopathy (HCM) that was developed by Cytokinetics. Details of the deal, including its price, were not disclosed.
Cytokinetics originally sold those rights to Corxel in 2020. The American biotech remains eligible to earn as much as $150 million in development and commercial milestone payments from the new rights holder. Additionally, it can reap royalties on future sales of the drug in Greater China. Cytokinetics said these payments range from the low-to-high-teen percentages of sales.
As if that's not enough, Cytokinetics may also be paid additional monies in connection with the execution of the Sanofi/Corxel transfer. The company did not provide further details.
Big hopes for China
In the press release trumpeting the latest aficamten arrangement, Cytokinetics waxed enthusiastic about the suitability of Sanofi as a partner. It quoted CEO Robert Blum as saying that " We now look forward to partnering with Sanofi with shared objective to leverage their cardiovascular expertise and expand the reach of aficamten to patients suffering from HCM throughout Greater China."
The company is right to be optimistic about the deal, and investors are right to be bullish on the future of its business. Aficamten has tested very well in clinical trials, and as such it has vast potential, especially in a massive market like China.
