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Jazz (JAZZ) Acquires Early-Stage Precision Oncology Asset

Zacks Equity Research

Jazz Pharmaceuticals plc JAZZ has acquired an early stage, innovative, precision oncology asset from London-based Redx Pharma for an upfront payment of $3.5 million.

Redx Pharma’s pan-RAF inhibitor program has the potential to be developed to treat RAF and RAS mutant tumors

In addition to the upfront payment, Jazz will pay additional $203 million in several milestone payments. Redx is also eligible to receive tiered royalties on any future net sales of drugs developed under this program.

Per a separate agreement, Redx will be responsible for pre-clinical development of the candidate while Jazz will be liable for clinical stage development, regulatory activities and commercialization.

The deal seems to be favorable for Jazz as the inclusion of the program will likely boost the company’s oncology pipeline going forward. The company has multiple pipeline candidates in pre-clinical to late-stage development. The company stated that this next generation precision oncology program will help to develop treatment for indications for which current selective B-RAF inhibitors remain ineffective.

Jazz’s shares have increased 15.2% so far this year compared with the industry’s rise of 8.7%.

 

Jazz has a history of boosting its portfolio of drugs/pipeline through acquisitions or collaborations. In January 2019, Jazz collaborated with Codiak BioSciences to develop and commercialize exosome therapeutics to treat cancer. The company added leukemia drug, Vyxeos to its portfolio with the acquisition of Celator in 2016. Moreover, recently approved sleep drug, Sunosi, was acquired from Aerial BioPharma in 2014.

Meanwhile, Jazz’s narcolepsy drug, Xyrem, which generated almost two-third of total revenues, will start facing generic competition as early as 2023. This may lead to significant decrease in the sales of the drug. Moreover, competition is increasing for Jazz as several companies are developing or marketing treatments for narcolepsy. Approved drugs for narcolepsy include Teva Pharma’s TEVA Provigil and Novartis’ NVS Ritalin-SR. Avadel Pharmaceuticals AVDL is also developing a narcolepsy candidate.

Successful commercialization of recently approved Sunosi and diversification into oncology indications will likely help the company offset any future decline in sales of Xyrem. The company already has two marketed oncology drugs, Vyxeos and Erwinaze.

Jazz Pharmaceuticals PLC Price

 

Jazz Pharmaceuticals PLC Price

Jazz Pharmaceuticals PLC price | Jazz Pharmaceuticals PLC Quote

Zacks Rank

Jazz currently has Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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