Shares of Precigen (NASDAQ:PGEN) had skyrocketed by 26.3% as of 11:30 a.m. EDT on Friday. That jump came after Precigen announced that German drugmaker Merck KGaA (OTC:MKKGY) (not to be confused with the U.S.-based Merck) is increasing its stake in the biopharmaceutical company.
Merck KGaA already owned around 11.6% of Precigen. That stake will increase to 14.8% because its wholly owned subsidiary, Ares Trading, is converting a convertible note into stock. Merck KGaA will remain the second-largest shareholder in Precigen.
This move is a major vote of confidence in Precigen's clinical program. Its lead candidate, AG09, is being evaluated in a phase 2 clinical study for treating type 1 diabetes. The company has four early-stage candidates, two of which are chimeric antigen receptor T-cell (CAR-T) programs targeting ovarian cancer and a pair of blood cancers, acute myeloid leukemia and myelodysplastic syndrome (MDS).
Merck KGaA is especially interested in those CAR-T programs: It reassigned development rights for then to Precigen in late 2018.
The primary potential catalysts for the biotech company moving forward will be its clinical updates. Precigen announced encouraging results from a phase 1b study of AG019 and from a phase 1 study of INXN-4001 in treating chronic heart failure earlier this year. The company expects to report further clinical trial results for these and other programs over the next several months.