ASRT stock has been on a tearing rally this morning on the back of a significant announcement this morning.
Big Development
Assertio Therapeutics Inc (NASDAQ:ASRT) made an announcement with regards to a crucial asset sale, and that has triggered a rally that saw ASRT stock soar by more than 52% in morning trade today. Late Thursday, the company announced through a press release that it has signed a definitive agreement with Collegium Pharmaceutical (NASDAQ:COLL) regarding the asset sale. The asset in question is the NUCYNTA range of products that are made by Assertio.
Assertio also revealed that it expects the deal to be closed by February 14. According to the terms of the agreement, Assertio will be paid $375 million after the deal is closed. However, Collegium will deduct whatever has already been paid in the form of royalties in 2020 so far. Assertio will also get paid for equipment and accessories that are associated with the NUCYNTA brand.
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The company revealed that it is going to use the proceeds from this deal to take care of its debts and also take care of further business development efforts.
At the time of writing, ASRT stock is trading higher by 52% at $1.58. COLL stock is also up by 19% at $24.18.
In the press release, the Chief Executive Officer and President of Assertio Therapeutics, Arthur Higgins, said, “We will use this new flexibility to pursue business development, strategic partnerships and investment opportunities with the goal of having our remaining business becoming cash flow and EBITDA positive by the end of the year.”
The reason behind the excitement of this deal is not only because Assertio is going to earn hundreds of millions of dollars from the sale. The company is also going to wipe off its debts completely and pursue new business activities. It goes without saying that the balance sheet is also going to be strengthened considerably.
Despite today’s big rally, ASRT stock is still down over 60% over the past year.
Featured image: DepositPhotos © leungchopan
