REPH

Recro Pharma Inc (NASDAQ:REPH) investors have a smile on their faces Monday evening, after the drug maker announced that they have entered into an exclusive license and collaboration agreement granting Vivelix worldwide rights to develop and market IMO-9200, an antagonist of TLR 7,8 and 9, for non-malignant gastrointestinal disorders.  As part of the agreement, Idera has agreed to create and characterize potential back-up compounds for Vivelix.

Recro Pharma reacted to the news, jumping nearly 22% in early trading Monday.

“We are excited to acquire an asset as innovative and potentially transformational as IMO-9200,” stated Bill Forbes, President & CEO at Vivelix Pharmaceuticals Ltd. “All of us at Vivelix look forward to developing this potentially life-changing therapy for patients suffering from gastrointestinal diseases.”

“The team at Vivelix has a tremendous track record in successful development and marketing of products in the gastrointestinal disease category,” stated Vincent Milano, Idera’s Chief Executive Officer. “We are pleased to be able to enter into this agreement with a team that we are confident can guide IMO-9200 through the next phases of development and ultimately into the hands of physicians and patients suffering from these severe, debilitating conditions.”

Under the terms of the agreement, Idera will receive an upfront fee of $15 million.  In addition, Idera will be eligible for future IMO-9200 related development, regulatory and sales milestone payments totaling up to $140 million, and escalating royalties ranging from the mid single-digits to low double-digits of global net sales.  Additionally, under the terms of the agreement and if requested by and at Vivelix’s expense, Idera is responsible for developing potential back-up compounds to IMO-9200.  As it relates to back-up compounds Idera will be eligible for related development, regulatory sales and milestone payments totaling up to $52.5 million and escalating royalties ranging from the mid single-digits to low double-digits of global net sales. (Original Source)

On the ratings front, Recro has been the subject of a number of recent research reports. In a report issued on November 14, H.C. Wainwright analyst Ed Arce reiterated a Buy rating on REPH, with a price target of $19, which represents a potential upside of 145% from where the stock is currently trading. Separately, on November 10, Roth Capital’s Scott Henry reiterated a Buy rating on the stock and has a price target of $24.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ed Arce and Scott Henry have a yearly average return of 4.6% and a loss of 2.0% respectively. Arce has a success rate of 35% and is ranked #1055 out of 4245 analysts, while Henry has a success rate of 38% and is ranked #3668.

Sentiment on the Street is mostly bullish on REPH stock. Out of 4 analysts who cover the stock, 4 suggest a Buy rating . The 12-month average price target assigned to the stock is $20.00, which implies an upside of 158% from current levels.

Recro Pharma, Inc. is a clinical stage specialty pharmaceutical company, whcih focused on products for hospitals and ambulatory care settings. The company is developing non-opioid products for treatment of serious acute pain. It offers drug solutions for cancer, musculoskeletal disorders and peripheral neuropathy, cancer breakthrough and acute post-operative pain. The company’s products include Dex-INR and Fadolmidine, which is under development.