SurModics New Licensing Deal (NASDAQ:SRDX)

On early Tuesday morning, SurModics announced their new licensing deal with Roche. SurModics Inc. said that they have licensed their drug delivery technology to Roche and Roche’s Genentech unit for a deal that could be worth around US$ 200 million. The news about the new licensing deal by SurModics gave a great boost to the shares of SurModics and they started climbing in the morning trading itself.  The shares were around $5.97, or 24.6 percent, to $30.24 in the morning trade, but it quickly moved up and halted at $29.04. SurModics shares have normally traded between $15.96 to $30.75 in the previous years.

Roche is based in Switzerland and is one of the world’s biggest drugmakers. However, it has been acquired by a San Francisco biotechnology company called Genentech in 2008. This licensing deal agreement provides Roche and Genentech exclusive rights to use biodegradable microparticles that are developed by SurModics Inc. In return SurModics will receive an upfront payment of US$3.5 million and around US$ 200 million as fees and milestone payments. Roche and Genentech will use these microparticles in their macular degeneration drug Lucentis.

Additionally, as per the agreement SurModics will also receive royalties on the sales of the product, if approved.