Navidea BioPharma (NASDAQ:NAVB) announced last night that it has entered into a licensing agreement with Alseres Pharmaceuticals (OTC:ALSE) for the development of ALSE’s Altropane imaging agent. Altropane is a radiolabeled agent being developed as an aid in the diagnosis of Parkinson’s disease and movement disorders. While NAVB incurs some upfront costs with the licensing, the long-term revenue potential will offset these side effects.
Navidea will initially pay $175,000 and issue 300,000 shares of NAVB common stock to Alsares, but the license agreement provides for contingent milestone payments of up to $2.9 million, and up to 1.15 million more shares of NAVB. Share price today reflects the initial loss and some dilution for Navidea, with NAVB down 9% while ALSE is up 100% on the news. Investors should look at the decline as a buying opportunity as NAVB, which has a strong balance sheet, increases its forward revenue with another developing product.