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Foghorn (FHTX) Surges on Oncology Collaboration With Lilly
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Shares of Foghorn Therapeutics Inc. (FHTX - Free Report) surged 54.96% after the company announced a collaboration with Loxo Oncology at Lilly, a research and development group of pharma giant Eli Lilly and Company (LLY - Free Report) .
Both the companies announced a collaboration to create novel oncology medicines by applying Foghorn's proprietary Gene Traffic Control platform. The partnership includes a co-development and co-commercialization agreement for Foghorn's selective BRM oncology program and an additional undisclosed oncology target. In addition, the collaboration includes three additional discovery programs using Foghorn's proprietary Gene Traffic Control platform.
Per the terms, Foghorn will receive an upfront consideration of $300 million in cash for the agreement. Lilly will also make an equity investment of $80 million in FHTX’s common shares at a price of $20 per share.
Foghorn will lead discovery and early research activities. Lilly will lead development and commercialization activities with participation from FHTX in operational activities and cost-sharing for the BRM-selective program and the additional undisclosed target program.
Foghorn and Lilly will share equally in the U.S. economics. FHTX is eligible to receive royalties on ex-U.S. sales starting in the low double-digit range and increasing into the twenties based on revenue levels.
Foghorn will lead discovery and early research activities and may earn up to a total of $1.3 billion in potential development and commercialization milestones for the additional discovery programs. Further, the company will have an option to participate in a percentage of the U.S. economics and is eligible to receive tiered royalties from the mid-single-digit to low-double-digit range on sales outside the United States that may be exercised after the successful completion of the dose-finding toxicity studies.
Shares of Foghorn are down 7.1% in the year so far compared with the industry’s decrease of 25.8%.
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The deal with a giant like Lilly bodes well for the company, given the former’s financial prowess and expertise. The BRM-selective program is being developed to address BRG1 mutated cancers utilizing two distinct approaches — protein degradation and enzymatic inhibition.
Foghorn is systematically studying, identifying and validating potential drug targets within the chromatin regulatory system using its proprietary scalable Gene Traffic Control platform. The company is also developing multiple product candidates in oncology, with two currently being investigated in clinical studies.
Loss per share estimates for Sarepta have narrowed from $6.95 to $4.99 for 2021 and from $4.78 to $3.61 for 2022 in the past 60 days. Sarepta delivered an earnings surprise of 11.06%, on average, in the last four quarters.
Loss per share estimates for Viking Therapeutics have narrowed to 74 cents from 81 cents for 2021 and to $1.08 from $1.18 for 2022 in the past 60 days. Viking delivered an earnings surprise of 2.06%, on average, in the last four quarters.
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Foghorn (FHTX) Surges on Oncology Collaboration With Lilly
Shares of Foghorn Therapeutics Inc. (FHTX - Free Report) surged 54.96% after the company announced a collaboration with Loxo Oncology at Lilly, a research and development group of pharma giant Eli Lilly and Company (LLY - Free Report) .
Both the companies announced a collaboration to create novel oncology medicines by applying Foghorn's proprietary Gene Traffic Control platform. The partnership includes a co-development and co-commercialization agreement for Foghorn's selective BRM oncology program and an additional undisclosed oncology target. In addition, the collaboration includes three additional discovery programs using Foghorn's proprietary Gene Traffic Control platform.
Per the terms, Foghorn will receive an upfront consideration of $300 million in cash for the agreement. Lilly will also make an equity investment of $80 million in FHTX’s common shares at a price of $20 per share.
Foghorn will lead discovery and early research activities. Lilly will lead development and commercialization activities with participation from FHTX in operational activities and cost-sharing for the BRM-selective program and the additional undisclosed target program.
Foghorn and Lilly will share equally in the U.S. economics. FHTX is eligible to receive royalties on ex-U.S. sales starting in the low double-digit range and increasing into the twenties based on revenue levels.
Foghorn will lead discovery and early research activities and may earn up to a total of $1.3 billion in potential development and commercialization milestones for the additional discovery programs. Further, the company will have an option to participate in a percentage of the U.S. economics and is eligible to receive tiered royalties from the mid-single-digit to low-double-digit range on sales outside the United States that may be exercised after the successful completion of the dose-finding toxicity studies.
Shares of Foghorn are down 7.1% in the year so far compared with the industry’s decrease of 25.8%.
The deal with a giant like Lilly bodes well for the company, given the former’s financial prowess and expertise. The BRM-selective program is being developed to address BRG1 mutated cancers utilizing two distinct approaches — protein degradation and enzymatic inhibition.
Foghorn is systematically studying, identifying and validating potential drug targets within the chromatin regulatory system using its proprietary scalable Gene Traffic Control platform. The company is also developing multiple product candidates in oncology, with two currently being investigated in clinical studies.
Foghorn currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the biotech sector are Sarepta Therapeutics (SRPT - Free Report) and Viking Therapeutics (VKTX - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Loss per share estimates for Sarepta have narrowed from $6.95 to $4.99 for 2021 and from $4.78 to $3.61 for 2022 in the past 60 days. Sarepta delivered an earnings surprise of 11.06%, on average, in the last four quarters.
Loss per share estimates for Viking Therapeutics have narrowed to 74 cents from 81 cents for 2021 and to $1.08 from $1.18 for 2022 in the past 60 days. Viking delivered an earnings surprise of 2.06%, on average, in the last four quarters.