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Vertex Pharmaceuticals Incorporated VRTX announced that it has entered into a strategic research and licensing agreement with Massachusetts-based privately held company, Skyhawk Therapeutics, Inc. The companies are looking to discover and develop novel small molecules that modulate ribonucleic acid (“RNA”) splicing for the treatment of serious diseases.
The collaboration will leverage Vertex’s research and development expertise with Skyhawk’s innovative technology – SkySTAR platform to develop small molecule therapeutics that modulate RNA splicing for addressing serious diseases.
Per the agreement, Vertex is entitled to pay an upfront payment of $40 million to Skyhawk. Vertex will also receive an exclusive option to in-license intellectual property rights to any candidates that may be discovered under the deal. Upon exercising the option, Vertex will be solely responsible for development and commercialization of such candidates.
Meanwhile, Skyhawk will be eligible to receive up to $2.2 billion as potential milestone payments, as well as potential royalties on future net sales, if a product is commercialized from the above collaboration.
Shares of Vertex have increased 7.3% so far this year compared with the industry’s rally of 10.2%.
We note that Vertex has entered into multiple agreements in the past couple of years to provide it with access to new external scientific technologies, programs and expertise in multiple diseases to complement its internal pipeline and diversify its portfolio. The company has such collaborations with small biotechs, CRISPR Therapeutics CRSP, Moderna MRNA, Kymera Therapeutics KYMR, Affinia Therapeutics and Arbor Biotechnologies, among others.
Notably, Vertex plans to pursue more business development transactions to bolster its pipeline for serious diseases with multiple modalities and technologies in the days ahead.
Meanwhile, Vertex is also looking for early-stage companies and products or intellectual property acquisitions that could help it broaden its pipeline beyond cystic fibrosis. The company invested approximately $1.6 billion in cash in external innovation through new acquisitions and collaborations in 2019.
Vertex 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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