Shares of Compugen Ltd. soared in premarket trading Monday after the Israeli drug developer said it could receive more than $500 million through a development agreement it reached with Bayer over two potential cancer treatments.
The company will receive an upfront payment of $10 million and could receive more than $500 million in milestone payments, plus royalties on any sales if the drugs eventually make it to market.
The deal focuses on antibody-based cancer immunotherapies. These treatments aim to stimulate the body's own immune cells to fight cancer cells.
The potential treatments have not started testing in humans, and the companies will collaborate on a preclinical research program. Bayer AG, which is based in Germany, then will gain full control over development and worldwide commercialization rights for the drugs.
U.S.-traded shares of Compugen gained 59 percent, or $3.24, to $8.69 Monday before the market open. The stock has traded from $2.96 to $6.60 in the past 12 months.