CymaBay Therapeutics Inc (Nasdaq: CBAY) Inks Licensing Deal with Kowa

CymaBay Therapeutics, Inc. – Nasdaq: CBAY

Shares of California-based CymaBay Therapeutics, Inc. are rocketing in pre-market trading. Traded on the Nasdaq under ticker symbol CBAY, the shares closed Tuesday at $1.90. In today’s pre-market trading CBAY has hit $3.00 on very heavy volumes.

Investors appear to be reacting to news that CymaBay has entered into a licensing deal with Kowa Pharmaceuticals for development and commercialization of CymaBay’s drug Arhalofenate – an oral, once-daily dual-acting drug candidate for the treatment of gout. Arhalofenate has been licensed to Kowa Pharmaceuticals America, Inc. for the U.S.A. market only – CymaBay Pharmaceuticals retains full development and commercialization rights for arhalofenate outside the U.S.A.

Under the terms of the agreement, CymaBay will receive up to $15 million in upfront and near-term milestone payments and is eligible to receive up to an additional $190 million in payments based upon the achievement of specific development, regulatory and sales milestones.  CymaBay is also eligible to receive tiered, double digit royalties on future sales of arhalofenate products.  Kowa will be responsible for all development and commercialization costs.

Harold Van Wart, Ph.D., President and CEO of CymaBay commented on the deal “We are extremely pleased to enter into this agreement with Kowa to develop and market arhalofenate in the U.S. Kowa has proven development capabilities as well as the resources to carry out a large Phase 3 development program. They also have an established primary care sales force to market arhalofenate products. As arhalofenate is a potential novel therapy for gout, a disease most often treated by primary care physicians, it is a very good fit with Kowa’s established strength in this area…”

Three firms cover CymaBay Pharmaceuticals Inc. Two analysts give CBAY a “”Strong Buy” rating while one rates CBAY as a “Hold”. Their consensus price target is $5.00.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

1/4/17
Ticker Symbol CBAY
Last Price a/o 8:00 AM EST $2.77
Average Volume 88,500
Market Cap $45 million
Sales
Shares Outstanding 23.7 million
Share Float 23.13 million
Shortable Yes
Optionable No
Inside Ownership 0.10%
Short Float 1.29%
Short Interest Ratio 3.36
Quarterly Return -0.52%
YTD Return 9.83%
Year Return 4.40%

Author: Marcus Anderson

Marc Anderson is a pseudonym. Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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