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Oncobiologics Inc (NASDAQ:ONS) Explodes On GMS Tenshi Stock Purchase And Licensing Agreement

Oncobiologics Inc (NASDAQ:ONS)

Oncobiologics Inc (NASDAQ:ONS)

Shares of Oncobiologics Inc (NASDAQ:ONS) more than doubled in value after the company announced a new strategic partnership. The stock was up by 126.44%, to end the week at $2.04 a share.

Stock Rally

The rally pushed the stock above key resistance levels reversing, be it in the short term, a strong downtrend. The stock faces immediate resistance at the $2.3 mark, ahead of a potential run to April highs of $3 a share.

Oncobiologics Inc (NASDAQ:ONS)
One month ONS stock price chart.

Oncobiologics Inc (NASDAQ:ONS) is a clinical stage biopharmaceutical company focused on the development and commercialization of complex biosimilar therapeutics. The company’s pipeline boasts of eight biosimilar product candidates, including ONS-3010 – a Humira biosimilar.

Purchase Agreement

Renewed investor interest on the stock comes after Oncobiologics Inc (NASDAQ:ONS) confirmed a Stock Purchase Agreement with GMS Tenshi Holding. The agreement provides for the placement of 25 million Oncobiologics Series A Convertible Preferred stock. Oncobiologics Inc (NASDAQ:ONS) has also granted GMS Tenshi certain information rights, such as rights of the first offer for future securities offerings.

The transaction still needs stockholders approval as Oncobiologics Inc (NASDAQ:ONS) moves to file a proxy statement with the U.S Securities and Exchange Commission (SEC). In the event the transaction does not close, the clinical stage company has agreed to pay GMS Tenshi, $12.5 Million in liquidated damages.

Licensing Agreement

The two companies have also entered into a joint development and Licensing agreement. Under the licensing agreement, GMS Tenshi Holdings has acquired rights to ONS-3010 and 0NS-1045 rights for emerging markets excluding China, India, and Mexico. The deal replaces a previous strategic agreement for ONS-1045 that was consumated in July.

Oncobiologics Inc (NASDAQ:ONS) cash balance has also increased $1.5 million after the company entered into an agreement with an existing shareholder for its senior secured notes.

“This investment by GMS Tenshi represents the culmination of our efforts to align with a strategic financial partner with a global strategy to accelerate commercialization of our biosimilar candidates and enhance our partnering and licensing capabilities,” said CEO, Pankaj Mohan.

According to the Chief Executive Officer, the new investments provide the much-needed finances needed to bring to market affordable biologic drugs. Oncobiologics Inc (NASDAQ:ONS) intends to use part of the net proceeds to initiate a Phase 3 trial of its lead biosimilar candidate ONS-3010. The funds are also to be used for working capital and for general corporate purposes.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

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Monica has an undergraduate degree in Accounting and an MBA she earned - with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

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