LPTX Stock Soars 60% After a Licensing Deal With BeiGene

LPTX stock

Licensing agreements are generally great news for pharmaceutical companies, which is why such a development almost always proves to be a positive for the stock price. That is what happened with LPTX stock this morning after Leap Therapeutics Inc (NASDAQ:LPTX) announced a license agreement with Beigene Ltd (NASDAQ:BGNE) for the commercialization and clinical development of one of its medicines. The company announced that BeiGene will also get an exclusive option for the medicine.

Big Boost for LPTX Stock Investors

The medicine in question is DKN-01, which is a form of anti-Dickkopf-1. As per the terms of the agreement, BeiGene will get exclusive rights for the markets in New Zealand, Australia, and Asia (excluding Japan). Leap will hold the rights for all other markets.

Leap Therapeutics is going to receive payment of $3 million straightaway owing to the deal and will be entitled to further payments if BeiGene decides to exercise its option. Milestone payments could end up totaling $132 million.

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It is a significant development, and it is no surprise that LPTX stock soared by as much as 60% to $1.69 in the morning session.

The Chief Executive Officer and President of Leap, Christopher K. Mirabelli, said of the deal that was signed between the two companies: “Securing a collaboration to further develop DKN-01 has been our top strategic priority, and we are excited to begin working with BeiGene, a global leader in oncology.”

Leap is also going to get a total equity investment of $27 million from BeiGene and two other institutional investors, one of which is Perceptive Advisors.

Perceptive and BeiGene are going to be issued 1,137,442 shares of Series B mandatorily convertible preferred stock. The other institutional investor is going to be issued 1,421,801 shares of Series A mandatorily convertible preferred stock. Those units are going to be sold at $0.55 each.

LPTX stock has gained about 195% since mid-October.

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Featured image: DepositPhotos © kwanchaidp

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