Newlink Genetics Corp. (NLNK) has inked a deal with Roche’s (RHHBY) Genentech for the development of NLG919, NewLink’s IDO pathway inhibitor, worth over $1 billion if NLG919 is a successful, marketed product. NLNK is a divisive name on the street with a short interest of over 6 million shares as of the end of September, nearly 20% of the company’s outstanding shares. The stock gapped higher by 30% on Monday morning, raising NLNK’s market cap to over 1 billion.
Roche has exclusive access to NLG919 worldwide and will collaborate with NewLink on the discovery of next generation IDO/TDO compounds. In exchange, Roche is coughing up $150 million in cash up front, up to $1 billion in development and regulatory milestones, and escalating double-digit royalty payments on potential commercial sales of NLG919, or any subsequent IDO/TDO inhibitors.
The deal comes on the heels early this year of both Astrazeneca (AZN) and Merck (MRK) pairing mid-stage immunotherapies with Incyte Therapeutics’ (INCY) IDO inhibitor, INCB24360.
NewLink should end the year with around $190 million in cash and equivalents, more if the company makes use of $13.9 million available at mid-year under an at-the-market financing arrangement.
