Shares of KalVista Pharmaceuticals Inc. (KALV) jumped 116.8% to $16 in premarket trading on Tuesday, Oct. 10, after the Cambridge, Mass.-based firm unveiled a collaboration pact with Merck & Co. Inc. (MRK) .
As part of the deal, KalVista has granted to Merck certain rights including an option to acquire KVD001 through a period following completion of the Phase 2 proof-of-concept study that KalVista plans to start later this year. KalVista is developing KVD001 as a potential treatment of diabetic macular edema (DME). In addition, KalVista has given Merck a similar option to acquire investigational orally delivered molecules for DME that KalVista will continue to develop as part of its research and development efforts.
Terms of the deal call for Merck to make a $37 million upfront payment to KalVista plus potential payments of up to $715 million associated with the exercise of the options and the achievement of milestones for each program. KalVista also will receive tiered royalties on net sales for product candidates commercialized under the pact.
In addition, KalVista has signed a $9.1 million private placement transaction with Merck under which Merck has acquired 1.07 million KalVista shares, representing a 9.9% stake, at $8.50 apiece.
Merck shares were trading at $64.56, up 0.4%.
Meanwhile, shares of Ovid Therapeutics Inc. (OVID) rose nearly 8% to $9.10 after the U.S. Food and Drug Administration gave orphan drug designation to the New York firm's OV101 for the treatment of Fragile X syndrome.
The syndrome is the most common inherited form of intellectual disability and autism, according to Ovid.
The FDA in September 2016 gave orphan drug designation for OV101 for patients with Angelman syndrome, a genetic disorder that causes developmental disabilities and neurologic problems.
Among the other biotech stock movers was Editas Medicine Inc. (EDIT) , up 1.6% to $25.42per share. The Cambridge, Mass.-based genome editing company is scheduled to participate at the Chardan Gene Therapy Conference on Tuesday.