Intercept Pharmaceuticals (NASDAQ:ICPT) stock is soaring higher on Thursday after the biopharmaceutical company revealed a deal with Advanz Pharma.
So what exactly is Advanz Pharma getting from this deal? Its purchase includes “certain foreign subsidiaries and rights regarding Intercept’s international operations.” That includes a license to commercialize Ocaliva outside the U.S.
Intercept Pharmaceuticals is getting $405 million upfront from Advanz Pharma as part of this deal. It’s also eligible for another $45 million from the company based on an extension of pediatric orphan exclusivity in Europe.
Intercept Pharmaceuticals is also retaining royalty rights to Ocaliva. That means any potential sales made by Advanz Pharma outside the U.S. will also generate revenue for the company.
The deal will have Intercept Pharmaceuticals still manufacturing Ocaliva but Advanz Pharma is taking over packaging, distribution, and commercialization outside the U.S. That comes from its acquiring a majority of Intercept employees outside the U.S. as part of the deal.
Jerry Durso, president and CEO of Intercept Pharmaceuticals, said the following in the news release boosting ICPT stock.
“We are committed to investing in our core focus areas in the U.S., including our PBC business, potential future activities in NASH, and our advancing and expanding pipeline. At the same time, we are confident that the strong international team will continue to build on our successful PBC business as they transition to Advanz Pharma.”
Heavy trading of ICPT shares follows today’s sale news. This has some 6 million shares on the move, as compared to its daily average trading volume of about 760,000 shares.
ICPT stock is up 14.2% as of Thursday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.