BioArctic surges over 27% on deal with BMS

Investing.com -- Shares of Swedish biotech company BioArctic AB (ST:BIOAb ) soared by more than 27% on Thursday after the company announced a collaboration with U.S. pharmaceutical giant Bristol Myers (NYSE:BMY ) Squibb.

The partnership centers on two of BioArctic’s next-generation Alzheimer’s disease programs, BAN1503 and BAN2803. 

The latter incorporates BioArctic’s innovative brain transporter technology, which analysts at RBC Capital Markets flagged as a potentially transformative approach in targeting amyloid beta plaques in the brain.

Under the terms of the agreement, BMS will pay BioArctic an upfront sum of $100 million, with the potential for up to $1.25 billion in milestone payments if the projects achieve key developmental and commercial goals. 

Additionally, BioArctic stands to receive low double-digit royalties on future sales should the programs eventually reach the market.

The collaboration is seen as a major endorsement of BioArctic’s technology, particularly its BTT platform, which aims to improve the delivery and safety profile of treatments for Alzheimer’s. 

RBC Capital Markets analysts noted that while BioArctic’s technology trails Roche’s trontinemab by several years, the support of BMS positions BioArctic to rapidly advance its programs and potentially deliver a best-in-class treatment.

One of the key innovations in BioArctic’s approach lies in targeting pyroglutamate amyloid beta subtypes. These forms of amyloid beta are particularly prone to aggregation, leading to the formation of harmful plaques that are a hallmark of Alzheimer’s disease. 

RBC analysts suggested that the focus on pyroglutamate subtypes, combined with the delivery advantages of the BTT platform, could set BioArctic’s candidates apart from existing therapies.

The deal marks a major step forward for BioArctic, which has gained a reputation for its focus on amyloid-targeting therapies. With BMS’s extensive resources and expertise now backing the development of BAN1503 and BAN2803, BioArctic is poised to challenge larger players in the Alzheimer’s treatment market.

BioArctic’s stock closed at SEK 170.00 on Thursday, reflecting a sharp increase from its previous levels, as investors responded positively to the news. 

RBC Capital Markets analysts maintained their “Outperform” rating on the stock with a price target of SEK 340.00, citing the importance of the BMS collaboration and the potential for long-term value creation.

Source: Investing.com