DURECT Soars On Out-Licensing Deal With Gilead For Up To $170M

Penny stock DURECT Corporation DRRX is advancing strongly Monday following an out-licensing deal with Gilead Sciences, Inc. GILD.

The Deal

DURECT announced an agreement with Gilead, granting the latter exclusive worldwide rights to develop and commercialize a long-acting injectable HIV product using its SABER technology.

Additionally, Gilead gets exclusive access to the SABER platform for HIV and hepatitis B Virus. It has also received the exclusive option to license additional SABER-based products aimed at HIV and HBV.

"We're pleased to be working on this program with Gilead given their expertise and global leadership in the HIV and HBV fields," said James Brown, CEO of DURECT.

Financial Terms

The agreement provides for Gilead paying DURECT $25 million in upfront payment, and potential payments up to $75 million in development and regulatory milestones and up to an additional $70 million in sales-based milestones, as well as tiered royalties on product sales.

If Gilead chooses to exercise the exclusive option, then DURECT stands to gain an additional $150 million per product in upfront, development, regulatory and sales-based milestones as well as tiered royalties on sales.

The companies also said they will collaborate on specified development activities with Gilead controlling and funding the development programs.

Gilead recently struck a partnership with privately-held Lyndra Therapeutics to develop and commercialize ultra-long-acting HIV therapies.

In pre-market trading, DURECT shares were rallying 21.11% to 88 cents and Gilead was edging up 0.38% to $65.29.

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