Idera Pharmaceuticals Inc (IDRA)

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Idera Signs Licensing Pact for Nixed GI Drug (IDRA) By Shobhit Seth | November 29, 2016 — 9:27 AM EST


Nasdaq-listed Idera Pharmaceuticals Inc. (IDRA) sold the licensing rights of its previously scrapped autoimmune drug IMO-9200 to privately-held Vivelix Pharmaceuticals Ltd.

Hamilton, Bermuda-based Vivelix was founded earlier this year by former Salix Pharmaceuticals employees.

The specialty drug company develops drugs for gastrointestinal and liver diseases. (See also: Valeant May Sell Salix Unit for $10 Billion.)

$15M Upfront and $140M Potential Milestones
As a part of the deal, Idera will receive an upfront payment of $15 million from Vivelix, with future potential milestone payments totaling up to $140 million and increasing royalties ranging from the mid-single digits to low double-digit percentage of global sales.

The deal also has provisions for the development of backup compounds in case IMO-9200 fails. Vivelix can ask Idera to develop back-up compounds to IMO-9200, which would be at Vivelix’s expense. Idera will be able to receive payments totaling up to $52.5 million for drug development, regulatory sales and milestones.

IMO-9200’s History
The IMO-9200 drug works by restraining a protein class called toll-like receptors, whose activation can lead to autoimmune disorders like rheumatoid arthritis and multiple sclerosis. (See also: Regeneron Rheumatoid Arthritis Drug Outperforms Humira.)

In the most recent quarterly filings, Idera said it will “not to proceed with the development of IMO-9200 because the large autoimmune disease indications for which IMO-9200 had been developed did not fit within the strategic focus of our company.”

Idera ended the third quarter with only $22.15 million cash and cash equivalents, so the upfront payment of $15 million from Vivelix will bolster its cash position.

Idera also raised money in a secondary public offering in October, but the development was not perceived positively by the market. The company's stock price tanked from $2.61 per share to $1.81 between October 5 and October 11, 2016. (For more, see Idera Announces $50M Public Offering.)

Following the Vivelix deal announcement, Idera's stock price hit $2.02 per share on November 28, and eventually closed at $1.80.

Read more: Idera Signs Licensing Pact for Nixed GI Drug (IDRA) | Investopedia http://www.investopedia.com/news/idera-signs-licensing-pact-nixed-gi-drug-idra/#ixzz4RPfsbcgs
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