Spero Therapeutics (NASDAQ:SPRO) stock is rocketing higher on Thursday after the company signed a licensing agreement with GSK (NYSE:GSK).
This deal covers the rights to tebipenem HBr, which is an antibiotic asset in late-stage development by Spero Therapeutics. That has GSK agreeing to an upfront payment of $66 million for exclusive rights to the medicine.
Adding to this, there are several milestone payments available to Spero Therapeutics. In total, this allows for up to an additional $225 million in payments from GSK. Investors will also note a low-single-digit to low-double-digit royalty agreement on sales of the asset.
The Deal Comes with an Investment
To go along with this, GSK is investing $9 million in Spero Therapeutics through a stock purchase. This has it acquiring 7.45 million shares of SPRO stock for $1.20805 each. The agreement doesn’t allow for more than a 19.99% stake in the company.
Ankit Mahadevia, M.D., CEO of Spero Therapeutics, said the following about the news.
“Tebipenem HBr’s potential as an at-home, oral option can potentially be of significant benefit by reducing hospital resource utilization. In addition, our partnership with GSK strengthens our balance sheet and shareholder base.”
Spero Therapeutics and GSK are expecting the deal to close during the fourth quarter of 2022. This has Spero Therapeutics expecting funds from the deal to fund its business beyond 2024.
Heavy trading of SPRO stock follows the licensing deal today. As of this writing, more than 61 million shares of the company’s stock have changed hands. For perspective, the company’s daily average trading volume is about 2.8 million shares.
SPRO stock is up 136.7% as of Thursday morning.
Investors seeking out more recent stock market news are in the right place!
InvestorPlace has all of the hottest stock market news traders need to know about for Thursday! That includes what’s happening with Novavax (NASDAQ:NVAX) stock, this morning’s biggest pre-market stock movers, and more. You can find out more about this at the following links!
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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.
