CV Therapeutics shares jump on drug rights deal
Wednesday April 16, 1:42 pm ET
CV Therapeutics shares surge as company expects $185 million in drug rights sale
NEW YORK (AP) -- Shares of CV Therapeutics Inc. jumped Wednesday following the biotechnology company's move to sell half its North American rights to the stress agent drug Lexiscan.
The stock gained $1.11, or 14.9 percent, to reach $8.56 in afternoon trading, on more than double its average trading volume. The shares have traded between $5.41 and $13.74 over the last 52 weeks, and are off nearly 18 percent since the start of the year.
After the closing bell Tuesday, the company said it would sell half the North American rights for the recently approved Lexiscan to TPG-Axon Capital for $175 million upfront and up to $10 million in future milestone payments. The drug is used in patients unable to exercise sufficiently for a coronary stress test and CV Therapeutics' partner is Astellas Pharma.
"The magnitude of this deal is much bigger than we would expect, since physicians we have queried seem relatively uninterested in a novel cardiac stress agent," said Leerink Swann & Co. analyst Joseph Schwartz, reaffirming a "Market Perform" rating.
The deal doubles the cash CV Therapeutics has on hand and could strengthen the company's bargaining position when speaking with potential partners on its chronic angina drug Ranexa, he added.
Lehman Brothers analyst Dr. Jim Birchenough also approved of the deal, reaffirming an "Overweight" rating, saying it reduces financial risk, enhances balance sheet strength and highlights the potential value of Lexiscan.
Meanwhile, Oppenheimer & Co. analyst Bret Holley reaffirmed a "Perform" rating for CV Therapeutics, citing the company's financial flexibility following the deal. |
