Pulmatrix (NASDAQ:PULM) was the big winner of the biopharmaceutical space on Monday and possibly the rest of the week as the company’s stock went through the roof early in the day off the heels of a “binding term sheet” surrounding one of its most asthma treatments.
The Lexington, Mass.-based drug maker said that it had entered into the aforementioned term sheet with Cipla Ltd, a subsidiary of Cipla Technologies LLC, in regards to the development and commercialization of its asthma treatment Pulmazole.
The terms of the deal will require Cipla to make an upfront payment to Pulmatrix of $22 million, giving it access to all rights of Pulmazole. However, the deal also states that Pulmatrix will retain the right to garner 50% of the free cash flow from future sales of the asthma treatment.
The Mass.-based business said that once the deal is done and dusted, the company sees itself in a good position to complete the phase 2 study of Pulmazole, which it plans to make a reality during the second quarter of 2019.
PULM stock had a day to remember as the stock went gangbusters, gaining 81.9% by day’s end. The deal also led to a massive spike in trading volume for Pulmatrix as 48.2 million shares traded hand, compared to only 834,000 shares as the full-day average before today.
Share retraced about 1.7% during after-hours trading.