What happened

Shares of Autolus Therapeutics (AUTL -5.82%), a clinical-stage biopharmaceutical company, are on the move after the company announced a new deal with Moderna (MRNA -1.75%). Investors excited about Autolus Therapeutics' potential role in Moderna's commercialization of RNA-based therapeutics drove the stock more than 25% higher when the market opened, but the gains have subsided as investors pick apart the details. Autolus Therapeutics' stock price was 13% higher as of 11:18 a.m. EDT on Monday.

So what 

Autolus is developing a whole new class of reprogrammed T-cell therapies to treat cancer and not RNA-based drugs like Moderna. Under the terms of a new exclusive access agreement, though, Moderna could incorporate some of Autolus' proprietary binders into new cancer therapy candidates.

Scientist working under a fume hood.

Image source: Getty Images.

It appears Moderna wants to combine its RNA technology with Autolus' proprietary binders to train harvested T-cells to recognize and bind to targets found on cancer cells. All of Moderna's drug candidates rely on RNA, but RNA can spur dangerous inflammatory reactions that will keep its usage in new drugs limited to products that don't require repeat dosing. 

Now what

Granting larger drugmakers exclusive rights to license a new drug target is a big deal if your new partner is willing to pay a significant sum upfront for those rights. Autolus Therapeutics is eligible to receive payments each time Moderna actually licenses a new target, which hasn't happened yet. In other words, Autolus gave up its ability to retain ownership of up to four new cancer drug targets for the ability to tell investors it's partnered up with a big-name biotech company.

Autolus Therapeutics' lead candidate, AUTO1, is a CD19-directed CAR-T therapy that could be better than similar therapies that have been available since 2017. Instead of trying to follow it higher, it's probably best to tread lightly around this risky biotech stock for the foreseeable future.