JNCE stock is moving up sharply following an update from Jounce Therapeutics (NASDAQ:JNCE) regarding its partnership with Celgene (NASDAQ:CELG).
Investors Cheer the News
Manufacturing of predictive biomarkers and immunotherapies is big business in the biotech space, and Jounce Therapeutics is one of the players in that thriving industry. However, yesterday, the company made a major announcement that sent JNCE stock on fire. The company announced a significant update with regards to its strategic collaboration with Celgene Corporation.
The collaboration had been in place since 2016, but late Tuesday, the company announced the provisions of a new licensing agreement. According to the terms of the updated licensing agreement, Celgene will continue to sell Jounce’s receptor-targeting monoclonal antibody product JTX-8064. However, Jounce will retain the worldwide rights for medicine, in addition to other medicines in the pipeline, which will include JT-4014 and vopratelimab.
The development is rightly welcomed by investors as JNCE stock is up about 25% at $5.10 on hefty volume. It goes without saying that the new agreement adds a lot of value to Jounce, and the market has read it.
Such a deal gives Jounce much greater control over its own products in addition to allowing the company to enjoy the benefits of having a licensing agreement with a global company like Celgene. The old agreement, by way of which Celgene had the rights to vopratelimab, has been terminated. It marks a new chapter for Jounce Therapeutics as a company and also in its relationship with Celgene.
It is true that the new agreement is without question an excellent deal for Jounce and in addition to that, the company will also get upfront payments as well as ones based on reaching milestones. Celgene is going to pay Jounce $50 million upfront. However, it gets better. The milestone payments could eventually go up to $450 million in total, and Jounce will also collect royalties from the net sales done by Celgene. On the other hand, the responsibility for the development and marketing of JT-8064 will lie entirely with Jounce.
Following today’s rally, JNCE stock has gained about 32% since the beginning of this year.
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