DUBLIN and ALDERLEY PARK, United Kingdom - Jazz Pharmaceuticals plc (NASDAQ: NASDAQ:JAZZ) has entered into a definitive agreement to acquire the KRAS inhibitor program from Redx Pharma plc (AIM: REDX (LON:REDX)). The deal, announced today, involves an upfront payment of $10 million by Jazz to Redx, with additional potential payments that could total $870 million based on developmental, regulatory, and sales milestones. Moreover, Redx is set to receive royalties on future net sales.
This acquisition is poised to expand Jazz Pharmaceuticals' portfolio of targeted oncology therapies. The KRAS inhibitor program includes preclinical candidates designed to target specific mutations in the KRAS gene, which is frequently mutated in various cancer types including colorectal, pancreatic, and lung cancers. The collaboration between Jazz and Redx aims to advance these candidates through Investigational New Drug (IND)-enabling studies, with Jazz overseeing the clinical development, regulatory affairs, manufacturing, and commercialization.
Robert Iannone, M.D., M.S.C.E., the executive vice president and global head of research and development at Jazz Pharmaceuticals, highlighted the high unmet need for innovative treatments targeting KRAS mutations. He expressed the company's anticipation to leverage combined oncology development expertise to progress promising molecules toward clinical trials.
Lisa Anson, Chief Executive Officer of Redx, remarked on the significance of the partnership with Jazz, which aligns with Redx's strategy to advance molecules in areas of high unmet need while also creating value for shareholders. The upfront payment from Jazz is expected to extend Redx's cash runway into 2025.
Jazz Pharmaceuticals is a global biopharmaceutical company focused on developing medicines for serious diseases with limited treatment options. Redx Pharma is a clinical-stage biotechnology company specializing in the discovery and development of targeted therapeutics for fibrotic diseases and cancer.
The transaction terms also include a separate collaboration agreement in which Jazz will fund Redx's research and preclinical development activities to complete IND-enabling studies for the KRAS inhibitor profiles. The next milestone for Redx will be IND clearance from the U.S. Food and Drug Administration for this program.
This news is based on a press release statement from Jazz Pharmaceuticals plc.
InvestingPro Insights
Jazz Pharmaceuticals' strategic acquisition of the KRAS inhibitor program from Redx Pharma not only strengthens its oncology portfolio but also reflects the company's solid financial position and commitment to growth. Key metrics from InvestingPro shed light on the company's financial health and market performance.
InvestingPro Data indicates a robust gross profit margin of 91.92% over the last twelve months as of Q3 2023, illustrating Jazz Pharmaceuticals' efficiency in managing production costs and generating revenue. This is particularly relevant as the company prepares to expand its oncology offerings, where high margins can support the costs associated with research and development, as well as commercialization efforts.
The company's market capitalization stands at $7.85 billion, and it has been trading at a low P/E ratio relative to near-term earnings growth, with an adjusted P/E ratio of 10.36. This suggests that investors may find the stock attractively valued, especially considering the potential for earnings growth highlighted by InvestingPro Tips. Additionally, the PEG ratio of 0.19 points to earnings growth outpacing the share price, potentially indicating an undervalued stock.
InvestingPro Tips for Jazz Pharmaceuticals reveal that management has been aggressively buying back shares, a sign of confidence in the company's future prospects. Furthermore, analysts predict the company will be profitable this year, which could be reassuring for investors considering the financial commitments involved in the recent acquisition.
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