Shares of Myovant Sciences rose 27% Monday after its parent Sumitovant Biopharma revealed a deal with Pfizer Inc. to jointly develop a treatment for prostate cancer and women’s health in a business worth up to $ 4.2 billion in initial and potential payments.
Myovant MYOV,
will receive a $ 650 million advance payment to develop and market relugolix, a once-daily gonadotropin-releasing hormone (GnRH) receptor antagonist, which was approved by the U.S. Food and Drug Administration in December as treatment for advanced prostate cancer.
If approved, the two companies will also develop and market combined relugolix tablets (relugolix 40 mg, estradiol 1.0 mg and norethindrone acetate 0.5 mg) aimed at women’s health in the US and Canada. They will start promoting co-treatment, which will be sold as Orgovyx, as a treatment for prostate cancer in early 2021.
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Companies will share profits and certain costs equally, while Myovant will record revenue. Myovant will also be responsible for interactions with the regulator and for drug delivery and clinical development. The company will be entitled to $ 200 million in potential regulatory steps for FDA approvals for the relugolix combined tablet in women’s health and in tiered sales stages to reach up to $ 2.5 billion in net sales for breast cancer. prostate and indications for women’s health.
“There is still a great unmet need among the millions of women who experience the common and debilitating symptoms associated with uterine fibroids and endometriosis,” said Nick Lagunowich, global president, Pfizer Internal Medicine PFE.
.
Evercore analyst Josh Schimmer said the deal is positive for Myovant.
“After we have had some time to digest it, we like it,” Schimmer wrote in a note to customers. “Although it is giving up half of the relugolix economy (which we had not modeled), it is adequately offset by the addition of PFE’s trade efforts, as well as the billions of benchmarks we believe are achievable.”
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He reiterated the quality of overcoming the action and the price target of 55 USD, saying that the action is one of his middle options.
“Investors were concerned that Sumitomo’s majority stake in MYOV could limit strategic partners along the way,” he said. “This business adds another strong company, with potentially valuable synergies.”
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Myovant is one of the five companies under the Sumitovant umbrella.
Prostate cancer is one of the most talked about comments among men, apart from skin cancer, according to Cancer.net. It is estimated that 191,930 men will be diagnosed with the disease this year, of which about 60% will be over 65 years old.
Myovant shares gained 84% in 2020, while SPDR S&P Biotech ETF XBI,
gained 57% and the S&P 500 SPX,
gained 16%.