Shares of Sarepta Therapeutics (SRPT) slumped Thursday after the biotech company announced a $48 million gene-therapy collaboration with StrideBio.
On the stock market today, Sarepta stock dropped 3.6%, to 97.41. The move came in lower-than-average volume. Still Sarepta stock remained above its 50-day moving average line.
Under the terms of the deal, Sarepta granted biotech company StrideBio a license to research, develop and manufacture up to eight gene therapies. StrideBio is an expert in adeno-associated viruses and capsids. Both are key ingredients in gene therapy.
“With our partnership with StrideBio, Sarepta continues to build on its leadership position in gene therapies to treat rare diseases,” Chief Executive Doug Ingram said in a written statement.
Sarepta Stock Dips On Gene-Therapy Deal
Adeno-associated viruses are used to create gene therapies. They are harmless on their own. So researchers are testing the theory they can use these viruses to insert genetic instructions at a specific site on the chromosome. Capsids are the outer coating of those viruses.
StrideBio will use its technology to develop gene therapies for Rett syndrome, Dravet syndrome, Angelman syndrome and Niemann-Pick. All four are central nervous system disorders. Sarepta also will have an exclusive option to four additional targets based on StrideBio’s technology.
CEO Ingram noted this expands the biotech company’s warehouse of gene therapy candidates by up to eight new targets. Sarepta won’t be responsible for preclinical development — also known as work that would enable the company to file an investigational new drug application.
This “ensures that we gain access to new technology and targets while not distracting Sarepta from its near-term priorities,” he said.
Biotech Companies Could Expand Partnership
The biotech company will make a $48 million payments to StrideBio in cash and Sarepta stock. StrideBio will also be eligible to receive payments for developmental, regulatory and commercial milestones, as well as royalties on potential sales.
If Sarepta uses the option to expand the collaboration by four additional targets to a total of eight, it will pay StrideBio an additional $42.5 million. StrideBio can partner on development and commercialization of one of the targets. In return, Sarepta will invest in StrideBio’s next financing round.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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