Shares of Chimerix (NASDAQ:CMRX) were on fire Friday, blasting 69% higher on the news that the struggling biotech is acquiring a complementary asset.
Chimerix announced it has purchased Oncoceutics, which like itself is a clinical-stage biotech actively developing cancer drugs. The price is $78 million, which will be divided evenly in a mix of cash and Chimerix stock. $25 million of the cash component was to be paid on the closing of the deal, with the remainder due one year thereafter.
As with any respectable deal in the biotech space, Oncoceutics shareholders will be eligible to earn milestone payments if the company hits certain development, regulatory, and sales targets. They can also earn product royalties.
Oncoceutics currently has five oncology therapies in its pipeline. Its lead product candidate certainly has potential -- this is ONC201, an orally administered treatment that, according to Chimerix, has demonstrated efficacy in inducing cell death in several types of cancer. The drug candidate is currently in clinical trials for the treatment of glioma, an aggressive type of brain tumor.
For Chimerix, Oncoceutics' pipeline dovetails nicely with its own efforts in the cancer realm -- specifically DSTAT, a drug currently being tested for treating acute myeloid leukemia in a phase 3 trial.
Chimerix has been on a downturn, both operationally and in terms of share price, after several clinical trials for its antiviral medication brincidofovir proved disappointing. It has high hopes for Oncoceutics' pipeline to help reverse its fortunes.