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Coronado Amends Ovamed Agreement

Zacks Equity Research

Coronado Biosciences (CNDO) recently amended its existing license and supply agreements with Ovamed GmbH. Coronado now has the manufacturing rights to its lead product TSO (Trichuris suis ova or CNDO-201) from Ovamed for North America, South America and Japan.

Although Coronado has the rights to TSO in its licensed territory, Ovamed will be retaining its manufacturing rights outside Coronado’s territory. Ovamed’s exclusive supply rights for TSO will be terminated soon after Coronado’s planned manufacturing facility in Woburn, MA, is operational. The new manufacturing facility’s build out and site preparation is expected to commence soon.

The new manufacturing site will ensure production of phase III supplies of TSO throughout the year. Ovamed will provide assistance in building the manufacturing facility and will continue to provide with clinical supplies to Coronado until the new facility is ready.

Coronado will be paying a total of $1.5 million in three equal installments in the years 2014, 2015 and 2016 as per the amendment. This payment is in exchange of the product supply payments that would have been payable to Ovamed for exclusive supplies and certain fees for product manufactured and sold by Coronado.

In March 2012, Coronado entered into an agreement with Falk and Ovamed to develop TSO for the treatment of Crohn’s disease. In August 2012, a phase II study on TSO was initiated in the US in patients suffering from Crohn’s disease. Coronado expects to complete the phase II study in the second half of 2013.

We remind investors that the Crohn’s disease market currently has players like Abbott Labs (ABT).

Coronadocurrently carries a Zacks #2 Rank (Buy). Meanwhile other pharma stocks such as Targacept, Inc. (TRGT) and Repligen Corporation (RGEN) carry a Zacks #1 Rank (Strong Buy).

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