Shares of Inovio Pharmaceuticals (NASDAQ: INO), a clinical-stage biotech focused on vaccines, rose 14% as of 3:25 p.m. EST on Tuesday. Investors can thank an amended partnership agreement with ApolloBio Corporation for today's jump.
Inovio Pharmaceuticals and ApolloBio Corporation -- a biotech based in China -- announced that they have tweaked the terms of their previously announced agreement. The updated deal provides ApolloBio with the exclusive right to develop and commercialize Inovio's DNA immunotherapy VGX-3100 within Greater China, which includes China, Hong Kong, Macau, and Taiwan. The agreement also provides a provision that could add in the Republic of Korea during the next three years.
As part of the new deal, ApolloBio has agreed to make an upfront payment of $23 million to Inovio, which is an $8 million bump over its prior agreement. In addition, ApolloBio agreed to make up to $20 million in future payments if certain milestones are hit and Inovio is entitled to receive double-digit tiered royalty payments on any product sales. Finally, the updated deal terminates ApolloBio's right to purchase Inovio stock.
The deal is expected to close in the first quarter.
Here's what Inovio's CEO Dr. J Joseph Kim had to say about the agreement:
Given the news, it is easy to understand why shares are soaring today.
We knew that Inovio's financial situation was growing worrisome, so it is great to see that the company has found a way to build up its cash balance without needing to dilute shareholders (at least for now). However, investors are still going to have to wait until sometime in 2019 before they get another look at how VGX-3100 is performing in the clinic. For that reason, my plan is to root for this company's success from the sidelines and keep my capital invested elsewhere.
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