A strategic collaboration has today’s traders talking about Arcturus Therapeutics (NASDAQ:ARCT) and CSL (OTCMKTS:CSLLY). Reportedly, the two companies will work together on mRNA technology for a wide variety of applications. ARCT stock shot up 30% as investors celebrated this joint venture and the revenue-generation potential for Arcturus Therapeutics.
California-headquartered Arcturus Therapeutics is primarily a vaccine developer, while CSL is a more diversified Australian pharmaceutical business. There may be a vast geographical distance between these two companies, but now they’ll be working together closely to advance mRNA vaccines.
To be more precise, Arcturus is collaborating with CSL Seqirus, a unit of CSL. Arcturus, according to the press release, will “provide CSL Seqirus with a license to their self-amplifying mRNA technology” for a broad variety of applications.
The resulting vaccine candidates could target Covid-19, influenza and a number of “other globally prevalent respiratory infectious diseases.” They may also aim for “pandemic-preparedness.”
What’s Happening with ARCT Stock?
Even while CSL stock is going nowhere fast, ARCT stock is much higher than it was yesterday. This morning, Arcturus Therapeutics shares gained 30% in value.
Why did Arcturus’s investors celebrate more than CSL’s did? Perhaps it’s because of the way the deal is structured, financially speaking. Here’s what Arcturus Therapeutics can or may receive from this agreement:
- $200 million will be received upfront.
- It’s eligible to receive more than $1.3 billion in development milestones.
- Also, it’s eligible to receive over $3 billion in commercial milestones.
- Finally, Arcturus is eligible to receive “a 40% net profit share for COVID-19 vaccine products and up to double-digit royalties for vaccines against flu, pandemic preparedness, and three other respiratory pathogens.”
Thus, Arcturus Therapeutics will definitely gain hundreds of millions of dollars, and could possibly earn several billions of dollars on top of that.
Plus, Arcturus will have access to CSL Seqirus’s vaccine-focused commercial and manufacturing infrastructure. It’s a notable deal for both companies, no doubt, and clearly a win for Arcturus and its shareholders today.
On the date of publication, David Moadel 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.
