This article was originally published on TipRanks.com
Shares of Sutro Biopharma, Inc. (NASDAQ: STRO) rallied 2.3% on Monday and a further 6.4% in the extended trading session after the company signed a license agreement with Tasly Biopharmaceuticals Co., Ltd. for the development and commercialization of STRO-002 in Greater China.
STRO-002 is a FolRα-targeting antibody-drug conjugate, currently in clinical studies for patients with ovarian and endometrial cancers in the U.S. and Europe.
As per the agreed terms, Sutro is entitled to an upfront payment of $40 million and is eligible to receive up to $345 million in development and commercial milestone payments. Also, the company will be carrying development and commercial rights of STRO-002 outside of Greater China.
Sutro will also be liable for the clinical trial and initial commercial supply of STRO-002 for trials in the licensed territory pursuant to a supply agreement. Upon commercialization, the company will receive tiered, double-digit royalties based on annual net sales.
Meanwhile, Tasly will undertake the clinical development, regulatory approval and commercialization of STRO-002 in Greater China for ovarian and endometrial cancers.
The CEO of Sutro, Bill Newell, said, “Tasly is an excellent partner for our Greater China collaboration, with a history of successful execution for developing and commercializing therapeutics. We are delighted to broaden the geographical footprint of STRO–002 and allow greater access for cancer patients to a new possible treatment option.”
Last month, Berenberg Bank analyst Zhiqiang Shu initiated a Buy rating on the stock with a price target of $30, implying upside potential of 105.9% to current levels.
The rest of the Street is optimistic about the stock with a Strong Buy consensus rating based on 4 unanimous Buys. The Sutro price target of $30.75 implies 111.1% upside potential to current levels.
TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on Sutro, with 9.2% of investors decreasing their exposure to STRO stock over the past 30 days.
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