Rally on! Here’s Why Acasti Pharma Inc (ACST) Stock Skyrockets Today

Can you feel the ground moving beneath your feet? Shares of Acasti Pharma Inc (NASDAQ:ACST) skyrocket nearly 70% today after the omega-3 product maker announced that it has recently entered into a non-binding term sheet with a leading China-based pharmaceutical company.

If a definitive agreement is reached and signed, the term sheet contemplates that Acasti would receive an upfront payment of US$8 million upon signing, plus potential additional regulatory and commercial milestone payments in excess of US$125 million, and tiered double-digit royalties on net sales. The term sheet is preliminary and non-binding at this stage and the license, upfront payment, possible milestone payments, and royalties contemplated by it will only become operative if definitive documents are executed. It is possible that no definitive agreement will be reached or, if a definitive agreement is reached, that its terms or conditions may differ from those described above.

Completion of the transaction is subject to further negotiation and execution of a definitive agreement, which once signed would grant an exclusive license to the Chinese pharmaceutical company to commercialize CaPre in certain Asian countries, including China. With the high prevalence of hypertriglyceridemia in Asia, this potential partnership presents a significant opportunity for Acasti and CaPre.

Acasti is a biopharmaceutical innovator advancing a potentially best-in-class cardiovascular drug, CaPre (omega-3 phospholipid), for the treatment of hypertriglyceridemia, a chronic condition affecting an estimated one third of the U.S. population. The company’s strategy is to initially develop and commercialize CaPre for the 3 to 4 million patients in the U.S. with severe hypertriglyceridemia. Since its founding in 2008, Acasti Pharma has focused on addressing a critical market need for an effective, safe and well-absorbing omega-3 therapeutic that can make a positive impact on the major blood lipids associated with cardiovascular disease risk. 

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