Opko Health (NYSE:OPK) stock was near 9, up 9% in morning trading — a more than three-month high — on the stock market today.
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The deal between Opko and Pfizer (NYSE:PFE) concerns hGH-CTP, a long-acting form of human growth hormone (hGH) intended to treat adults and children with stunted growth. The formula, currently in late-stage testing for adults and midstage testing for children, is injected once a week, in contrast to the daily injections required for conventional hGH.
Pfizer agreed to pay Opko $295 million upfront and up to $275 million in milestone payments if the drug passes through all the regulatory hurdles. If it hits the market, Pfizer will have exclusive worldwide marketing rights.
"We believe that the global growth hormone market is currently valued at more than $3 billion, and believe that hGH-CTP has the potential to be the best-in-class long-acting growth hormone product," said Opko CEO Philip Frost in a statement.
Pfizer, meanwhile, said that the deal helps build out its rare-disease portfolio, which already consists of 22 products worldwide.
The deal lifted Opko's flagging stock, which had been drifting downward with a worsening accumulation/distribution rating over the last four months. Since 2007, Opko has generated a modest but growing revenue stream from selling active pharmaceutical ingredients and lab services, but it's not expected to turn a profit until it starts launching its own drugs.
In September, Opko partner Tesaro (NASDAQ:TSRO), which licenses drugs from Opko, filed for FDA approval of oral rolapitant, an anti-nausea medicine for cancer patients. Opko has said that it expects to file its vitamin D compound Rayaldee in the current quarter. Analysts polled by Thomson Reuters expect it to go into the black in 2017, with a profit of 45 cents a share.
