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Affimed (AFMD) Surges on Collaboration Contract with Roche (revised)

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Shares of Affimed Inc. AFMD were up a massive 246.8% post announcement of a cancer collaboration agreement with Roche Holding’s RHHBY subsidiary, Genentech, on Monday Aug 27.

In fact, the stock has skyrocketed 327% year to date, comprehensively outperforming the industry’s increase of 2.4%.

 

Both companies have entered into a strategic collaboration deal to commercialize and develop a host of immunotherapeutic treatments for multiple cancers.

Financial Details of the Deal

Per the terms of the contract, Affimed will receive an upfront payment of $96 million with potential for an additional $5 billion in milestone payments and royalties on sale. The transaction is expected to close in the third quarter of 2018, subject customary closing conditions and a clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

Other Details

Affimed will discover and advance innate immune cell engager-based immunotherapeutics of interest to Genentech, using its proprietary Redirected Optimized Cell Killing platform, which utilizes both NK cells (natural killer cells) and T-cells.

The agreement will include other pipeline candidates from Affimed’s ROCK platform, which are under evaluation for multiple solid and hematologic tumors. While Affimed and Genentech will carry out early-stage and late-stage research phases, Genentech will be solely responsible for clinical development and commercialization worldwide.

The transaction looks to be a strategic fit for Affimed as it will boost its cashflow to a great extent. The influx of $96 million will be a great drive for the company. Moreover, Affimed has potential back load of milestone payments worth $5 billion. Hence, the company will not need to raise cash.

Affimed N.V. Price and Consensus

Affimed N.V. Price and Consensus | Affimed N.V. Quote

Zacks Rank & Stocks to Consider

Affimed currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the pharma sector are Illumina, Inc. ILMN and Gilead Sciences, Inc. GILD, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Illumina’s earnings estimates have been raised 12.1% for 2018 and 10% for 2019 over the past 60 days. The stock has soared 57.8% so far this year.

Gilead Sciences’ earnings estimates have been moved 7.5% north for 2018 and 1.9% for 2019 over the past 60 days. The stock has gained 4.6% year to date.

(We are reissuing this article to correct a mistake. The original article, issued August 29, 2018, should no longer be relied upon.)

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Roche Holding AG (RHHBY) : Free Stock Analysis Report
 
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