Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) announced that it has completed the sale of its European operations to Incyte Corporation and entered into the previously announced license agreement for Incyte to exclusively license Iclusig®(ponatinib) in Europe and other select countries.
ARIAD transferred all rights to its EU operations to Incyte, which has acquired all shares of ARIAD Pharmaceuticals (Luxembourg) S.a.r.l., the parent company of ARIAD’s European subsidiaries responsible for the commercialization of Iclusig in the licensed territory, for a payment to ARIAD at the closing of approximately $140 million (subject to customary post-closing adjustments). In addition, Incyte has now been granted an exclusive license to develop and commercialize Iclusig in the European Union and 22 other countries, including Switzerland, Norway, Turkey, Israel and Russia.
“With the closing of this transaction, we have completed a key outcome from our strategic review,” stated Paris Panayiotopoulos, president and chief executive officer of ARIAD. “This agreement puts ARIAD in a strong financial position. It will allow us to focus our resources on our promising R&D initiatives and our efforts to achieve the full commercial potential of Iclusig and brigatinib, if approved, in the highly valuable U.S. market, while also maintaining future strategic flexibility through the buy-back provision for the licensed Iclusig rights.”
In connection with the closing of the Incyte transaction, the previously disclosed amendments to ARIAD’s royalty financing agreement with PDL BioPharma, Inc. (PDL), entered into on May 9, 2016, became effective. ARIAD and PDL agreed to amend the agreement to, among other things, include net sales of Iclusig made by Incyte in the calculation of net sales under the PDL agreement and to restructure ARIAD’s option to receive additional funding so that ARIAD may require PDL to fund up to an additional $40 million (instead of the original $100 million) in July 2017, rather than between January and July 2016. (Original Source)
Shares of Ariad Pharmaceuticals closed yesterday at $8.83, down $0.02 or -0.23%. ARIA has a 1-year high of $10.07 and a 1-year low of $4.37. The stock’s 50-day moving average is $7.48 and its 200-day moving average is $6.31.
On the ratings front, Ariad has been the subject of a number of recent research reports. In a report issued on May 24, Jefferies Co. analyst Eun Yang reiterated a Buy rating on ARIA, with a price target of $13, which represents a potential upside of 47.2% from where the stock is currently trading. Separately, on May 23, William Blair’s Y Katherine Xu reiterated a Buy rating on the stock and has a price target of $10.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Eun Yang and Y Katherine Xu have a total average return of -2.9% and 4.3% respectively. Yang has a success rate of 59% and is ranked #3371 out of 3986 analysts, while Xu has a success rate of 47% and is ranked #1048.
The street is mostly Bullish on ARIA stock. Out of 5 analysts who cover the stock, 4 suggest a Buy rating and one recommends to Sell the stock. The 12-month average price target assigned to the stock is $10.00, which implies an upside of 13.3% from current levels.
ARIAD Pharmaceuticals, Inc. operates as an oncology company which engages in the discovery, development, and commercialization of small-molecule drugs for the treatment of cancer. Its products include Iclusig and Caregivers. The company was founded by Harvey J. Berger in April 1991 and is headquartered in Cambridge, MA.