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Aligos (ALGS) Inks Collaboration With Merck for NASH Therapy

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Zacks Equity Research
·2 min read
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Aligos Therapeutics, Inc. ALGS announced that it has entered into an exclusive license and collaboration agreement with pharma giant Merck MRK for discovering and developing oligonucleotide candidates directed against a non-alcoholic steatohepatitis (“NASH”), using Aligos’ oligonucleotide platform technology. The companies have agreed to discover up to one additional target of interest in the cardiometabolic or fibrosis space under this deal.

Per the agreement, Aligos will receive an undisclosed upfront payment from Merck along with additional payment upon deciding on a second target therapy from the above collaboration. Aligos will also be eligible to receive up to $458 million as development-based milestones with respect to each target from the collaboration and tiered royalties on net sales, if a product is commercialized from the deal.

Notably, Aligos will evaluate the oligonucleotide molecules and deliver the optimized lead molecules, while Merck will carry out the subsequent research, clinical development and commercialization efforts.

Shares of Aligos were up 9.4% following the announcement of the deal on Monday. Meanwhile, the stock has increased 4.5% in the past month compared with the industry’s rally of 7.2%.

price chart for ALGS
price chart for ALGS

We note that, Aligos’ shares started trading recently on the Nasdaq Global Select Market following its initial public offering in October 2020.

While the NASH market promises potential, it is quite challenging as well. Quite a few companies are developing treatments for NASH, sparking competition in the space. Gilead Sciences GILD has collaborated with Novo Nordisk NVO for evaluating combination treatments to treat NASH.

Notably, Intercept Pharmaceuticals is developing obeticholic acid for the treatment of fibrosis due to NASH while clinical-stage biopharmaceutical company Galmed Pharmaceuticals Ltd. is developing Aramchol for patients with NASH and fibrosis.

Zacks Rank

Aligos currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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