Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Myovant Sciences Stock Is Soaring Today

By Keith Speights - Dec 28, 2020 at 11:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors are cheering a big collaboration with Pfizer.

What happened

Shares of Myovant Sciences ( MYOV -5.17% ) were soaring 26.7% as of 11:17 a.m. EST on Monday. The big gain came after Myovant and Pfizer ( PFE 2.32% ) announced a collaboration to develop and market relugolix in the U.S. and Canada in women's health and as a treatment for prostate cancer.

So what

Investors liked the financial impact for Myovant. The company will receive an up-front payment from Pfizer of $650 million. It's also eligible for $200 million in payments contingent on achieving regulatory milestones. Myovant also will receive tiered sales milestone payments based on reaching specified thresholds of up to $2.5 billion in net sales for relugolix. The two companies will split profits equally on sales of the drug.

Two jigsaw pieces showing part of a $100 bill

Image source: Getty Images.

Pfizer also has an exclusive option to market relugolix in cancer indications outside the U.S. and Canada (except for some Asian countries). If Pfizer exercises this option, Myovant will receive another $50 million payment. It will also stand to receive double-digit royalties on Pfizer's sales of the drug.

There's definitely a great fit between Pfizer and Myovant. The former has been a key player in both the prostate cancer and women's health markets. The big drugmaker's sales force will almost certainly make relugolix a bigger commercial success more quickly than Myovant would have been able to do on its own.

Now what

Myovant will begin jointly marketing relugolix with Pfizer in treating advanced prostate cancer in early 2021. What's the next potential catalyst for the biotech stock? The Food and Drug Administration is scheduled to make an approval decision on relugolix combination tablet in treating uterine fibroids by June 1, 2021. Myovant also expects to file for FDA approval of the drug in treating endometriosis in the first half of the new year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Myovant Sciences Ltd. Stock Quote
Myovant Sciences Ltd.
$14.66 (-5.17%) $0.80
Pfizer Inc. Stock Quote
Pfizer Inc.
$54.27 (2.32%) $1.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/06/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.