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By Chris Wack
XBiotech Inc. (XBIT) shares rose 37% to $15.20 after the company said it is selling its novel antibody bermekimab that neutralizes interleukin-1 alpha, or IL-1, to Janssen Biotech Inc., a Janssen Pharmaceutical company of Johnson & Johnson (JNJ)
The biopharmaceutical company said Janssen will acquire all rights to bermekimab under the terms of the agreement, and XBiotech will be free to use its True Human Antibody discovery program to develop new antibody therapeutics that target IL-1, which promotes disease-causing inflammation in a wide range of medical conditions, to treat non-dermatological diseases.
XBiotech said it plans to re-enter clinical development expeditiously with a next generation anti-IL-1 therapeutic.
XBiotech said it will use its proprietary manufacturing technology to produce clinical supplies of bermekimab for Janssen under a supply agreement. The company will also will contract with Janssen to provide clinical trial operation services to complete two ongoing Phase II clinical studies evaluating bermekimab in hidradenitis suppurativa and atopic dermatitis.
On closing, Janssen will make a cash payment of $750 million to XBiotech, which may also receive up to $600 million in potential milestone payments. XBiotech said it expects to generate additional revenue from the manufacturing supply agreement and clinical services agreement with Janssen over the next two years.
XBiotech plans to use a portion of the proceeds from this transaction to fund discovery and development of its next generation True Human anti-IL-1 antibody program. A portion of the revenue will be dedicated to advancing other antibody therapeutics in XBiotech's pipeline, and for a capital transaction, such as a stock repurchase.
Write to Chris Wack at email@example.com
(END) Dow Jones Newswires
December 09, 2019 06:40 ET (11:40 GMT)
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