Oasmia Pharmaceutical AB rose the most on record after it signed a license and distribution agreement with Abbott Laboratories for two canine cancer drug candidates, “significantly” expanding a 2009 deal.
Oasmia shares surged as much as 43 percent, the biggest intraday advance since January 2006, and were up 38 percent at 6.90 kronor at 1:59 p.m. in Stockholm, giving the Uppsala, Sweden-based company a market value of 564 million kronor ($86.3 million). Trading volume of about 304,000 shares was more than nine times the three-month daily average.
Abbott will get exclusive rights to Paccal Vet and Doxophos Vet in “essentially” the entire world, while Oasmia receives an upfront payment and is eligible for further performance payments of as much as $21.5 million, the company said in an e-mailed statement today. If the products are commercialized, Oasmia will get tiered royalties based on sales, it said.
“This agreement shows that Abbott really has faith in our products and their potential,” Oasmia Chief Executive Officer Julian Aleksov said in a telephone interview. “This is a new market, but it’s a large one.”
Cancer is the leading cause of dogs’ disease-related death, with as many 3 million new cases diagnosed annually, Oasmia said. The company lost 25 percent of its value on March 3, reaching the lowest price since the stock started trading in early 2006, after withdrawing a marketing approval application in Europe for Paccal Vet. The retraction followed concern expressed by the European Medicines Agency’s veterinary medical products committee regarding the treatment’s risks.
The Swedish biotechnology company intends to re-submit the European application with additional data, and it has filed for U.S. market authorization for the drug, Aleksov said.
Doxophos Vet has been granted Minor Use and Minor Species designation by the U.S. Food and Drug Administration, a label intended to make more treatments available to veterinarians and pet owners to treat minor animal species and uncommon diseases in major animal species.
The drugmaker, which doesn’t yet have products on the market, sold 123 million kronor of shares before costs in November to help fund drug development and the registration of Paccal Vet. Oasmia stock lost 45 percent of its value last year.
Today’s agreement with Abbott Park, Illinois-based Abbott doesn’t include rights to Paccal Vet in Russia, Japan and the Commonwealth of Independent States, which is comprised of former Soviet republics, while the rights to Doxophos Vet don’t include Russia and the CIS, Oasmia said.