Shares of medical technology microcap Valeritas Holdings (NASDAQ: VLRX) have run ahead in morning trading on Tuesday after the New Jersey-based company struck a deal to have its diabetes treatment distributed to patients in Australia and New Zealand. Entering Tuesday, Valeritas had a market cap under $9 million.
That has changed with the news that an exclusive distribution agreement has been signed with AMSL Diabetes and NZMS Diabetes for the affiliated private companies to commercialize Valeritas V-Go wearable insulin delivery device for patients with type 2 diabetes. Diabetes is a chronic condition where the body either doesn’t produce enough insulin or doesn’t utilize the insulin it produces properly. Insulin is critical to regulating glucose (sugar) levels in the blood.
Insulin-dependent patients today have different alternatives to maintain healthy insulin levels, with multiple daily injections a common practice. V-Go is an all-in-one basal-bolus insulin delivery option that is worn like a patch.
In a basal-bolus regimen, the system attempts to emulate the natural action of the body to use lower doses of insulin (basal dose) during periods of fasting and shorter-acting insulin (bolus dose) during times when food is eaten to prevent a spike in blood glucose levels.
The V-Go device accomplishes this by administering a continuous preset basal rate of insulin across 24 hours, while providing on-demand bolus dosing at mealtimes.
Per the pact, AMSL and NZMS will have the rights to promote, market and sell V-Go to clinics and patients across Australia and New Zealand, countries where the companies have exclusively focused for over three decades.
"Adding V-Go to our portfolio is a significant step towards addressing the needs of Australian and New Zealand patients with type 2 diabetes who want simple and effective insulin management that doesn’t interfere with their way of life," said Richard Plowright, Managing Director of AMSL and NZMS, in a statement today.
The news probably couldn’t have come at a better time for Valeritas, as shares of VLRX had been under extreme pressure for six straight trading sessions. Despite a dearth of news during the span, the stock price had plunged from around $2.50 on April 9 to a low of $1.19 on Monday. Shares have catapulted back upward with the distribution deal, including surging on massive volume as high as $4.58, marking the highest level since December 27, 2017.
Only 90 minutes into the trading day, nearly 2-1/2 million shares have traded, compared to a three-month average of only 10,510 shares per day. The stock has not held the intraday high, but remains ahead an even 100% at $2.48.
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