Life sciences group Abzena (ABZA:AIM) has sealed a licensing agreement with the potential to generate $300m in licence fees and milestone payments. That compares to the £9.85m of revenue chalked up last year, to 31 March 2016.
Having struck the deal with an undisclosed San Diego-based biopharma firm, Abzena is set to receive royalties on sales of approved products that use its ThioBridge technology, the second major licensing deal for the platform in a year.
ThioBridge allows drugs to be attached to antibodies that can be then specifically targeted at various diseases. Abzena also signed a master services agreement to allow multiple programmes of work to be undertaken over an extended period.
The deal caused wild reactions from investors, with the share price rocketing a staggering 72% to 61.5p.
Broker Numis analyst Stefan Hamill says the $300m deal will underpin Abzena’s near, mid and long-term revenue.
Still, investors should remember the drug development cycle is a long process with high failure rates, so potential licence income is not guaranteed.
But N+1 Singer analyst Jens Lindqvist remains upbeat. He believes the life science group’s share price could even rally further if it can maximise its opportunity pipeline.
