Regeneron Pharmaceuticals, Inc (REGN) and Intellia Therapeutics, Inc. (NTLA) announced an expansion of their partnership to jointly develop potential products for the treatment of hemophilia A and B.
Under the terms of the partnership Intellia will receive an upfront payment of $70 million, and Regeneron will make an additional equity investment in Intellia of $30 million at $32.42 per share. Intellia shares jumped 19% to $20.92 at the close on Monday.
The collaboration will provide Regeneron with rights to develop products for additional 5 in vivo gene edited targets. The biotech company will also get non-exclusive rights to independently develop and commercialize ex vivo gene edited products.
“We are excited to work with Regeneron on what could potentially be a cure for hemophilia A and B in this expansion of our successful collaboration that builds on our leading insertion capabilities,” said Intellia’s CEO and President John M. Leonard. “We believe that our CRISPR/Cas9-based technology addresses the limitations of current replacement and gene therapy approaches, and importantly, may provide a durable, potentially life-long solution to these genetic diseases.”
In addition, the term of the companies’ existing collaboration will be extended until April 2024, with Regeneron having an option to renew for an additional two years.
After Monday’s rally, Intellia’s shares are up now 42% year-to-date.
Following the news, five-star analyst David Nierengarten at Wedbush raised Intellia’s price target to $20 from $16, while maintaining a Hold rating on the stock, saying that the expanded deal is a “favorable” extension of the existing collaboration.
“The financial terms for Intellia are attractive and alleviates a meaningful degree of dilutive financing risk for the company,” Nierengarten wrote in a note to investors.
However, the analyst views Intellia’s programs as fully valued at these levels.
The rest of Wall Street analysts are evenly divided between 2 Buy and 2 Hold ratings adding up to a Moderate Buy consensus. In comparison to Nierengarten, the analyst community sees room for more gains in the shares in the coming year. The $33.17 average price target implies 59% upside potential in the next 12 months. (See Intellia stock analysis on TipRanks).
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