Tesaro shares rise as J&J buys rights to prostate cancer drug for $85 million
pharmafile | April 6, 2016 | News story | Business Services, Research and Development, Sales and Marketing | Cancer, J&J, JJ, M&A, MA, Tesaro, drug, licence agreement, research
Shares in oncology-focussed Tesaro Inc (Nasdaq: TSRO) jumped Wednesday after the company said pharma major Johnson & Johnson (NYSE: JNJ) will pay $85 million for rights to develop and sell its trial-drug to treat prostate cancer.
Under the terms of the deal J&J will invest $50 million in Tesaro’s stock, paying $44.24 a share. In addition, the company will pay $35 million in cash up front for rights to the cancer drug, niraparib, Tesaro said in a statement.
US-based Tesaro will also receive as much as $415 million in potential milestone payments from J&J.
Tesaro’s stock was up 10.2% at $47. 71 in morning trade on the Nasdaq.
J&J will gain rights to develop and sell the prostate cancer pill everywhere except Japan, the company said. Tesaro will receive royalties for those sales.
Niraparib is also being tested in other indications and is in late stage trials for ovarian cancer, breast cancer and mid-stage trials for ovarian cancer. Further, the drug candidate is also in early combination trials with Keytruda (pembrolizumab) for breast cancer or ovarian cancer.
According to National Institutes of Health, prostate cancer is the third-most common cancer in the US, with 2.8 million men living with the disease in 2012.
Anjali Shukla
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