Shares of Jaguar Health (NASDAQ:JAGX) are surging at Monday’s market open as investors digest the impact of a royalty financing agreement announced late Friday afternoon. The JAGX stock price was up more than 20% at the time of writing.
The transaction, Jaguar’s third such pact, calls for the gastrointestinal treatments developer to receive $5 million for the future potential crofelemer sales for the proposed Covid-19 indication in long-hauler patients. The company is currently pursing conditional marketing authorization in the European Union.
Jaguar will use the proceeds from the proposed transaction to support regulatory activities associated with its development pipeline, including supporting the development program for crofelemer for the prophylaxis and/or symptomatic relief of inflammatory diarrhea. The company says it will initially study crofelemer in a long-hauler Covid-19 recovery patient population.
Long-hauler syndrome is a recognized condition in the United States, where Congress has provided $1.15 billion in funding over four years for the National Institutes of Health to support research into the prolonged health consequences of infection with SARS-CoV-2, the virus that causes Covid-19.
This financing transaction follows a $6 million royalty transaction finalized in October 2020 and a $6 million royalty transaction settled in December 2020.
JAGX Stock Has Been Biopharma Winner
JAGX stock has been one of the big winners in the recent boom in clinical-stage biopharma companies. The company focuses on sourcing its ingredients responsibly from rainforest-area plants.
Mytesi, the subject of this latest royalty financing deal, was approved in 2012 for patients with non-infectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. The oral plant-based prescription medicine was approved under FDA Botanical Guidance.
With this third, non-dilutive funding event, investors are getting positive news as the company has struggled in recent months to maintain its Nasdaq listing.
“We are very pleased to have entered this binding agreement of terms for an additional $5 million of non-dilutive financing to fund pipeline opportunities for crofelemer (Mytesi). We believe the proposed COVID-related indication of crofelemer has the potential to achieve accelerated conditional approval under emergency review — in particular in the EU, based on the stated requirements of the European Medicines Agency (EMA),” stated Lisa Conte, Jaguar’s founder, president and CEO.
“The COVID-related indication is the initial indication to be pursued by Napo EU, the exclusive target of the planned Dragon special purpose acquisition company (SPAC) which is anticipated to be listed on AIM Italia. We expect to issue additional updates regarding Napo EU next week,” Conte added.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.