XBiotech Inc (NASDAQ:XBIT) agreed to sell True Human Antibody bermekimab targeting IL-1a to Janssen for $750 million in cash plus milestone payments up to $600 million.
Following the acquisition, XBiotech will use its proprietary manufacturing technology to produce clinical supplies of bermekimab for Janssen under a supply agreement. In addition, XBiotech will contract with Janssen to provide clinical trial operation services to complete two ongoing Phase II clinical studies evaluating bermekimab in Hidradenitis Suppurativa and Atopic Dermatitis.
Upon closing, Janssen will make a cash payment of $750 million to XBiotech. In addition, XBiotech may receive up to $600 million in potential milestone payments. XBiotech expects to generate additional revenue from the manufacturing supply agreement and clinical services agreement with Janssen over the next two years.
XBiotech plans to use a portion of the proceeds from this transaction to fund discovery and development of its next generation True Human anti-IL-1⍺ antibody program. Additionally, a portion of the revenue will be dedicated to advancing other antibody therapeutics in XBiotech’s pipeline.
The Company is also planning to use part of the proceeds in a capital transaction, such as a stock repurchase, subject to board review and approval.
CEO John Simard said "We are proud that Janssen has chosen bermekimab as an agent it believes could have an important impact. We believe their acquisition will enable recognition and increase awareness of the full potential of this first-in-class therapeutic."
XBIT shares rocketed $9.93, or 89.3%, to $21.05
