Epix Pharmaceuticals, a small biotech based in Lexington, MA, saw its shares shoot up 46 percent this morning after it announced a $1.2 billion development pact with GlaxoSmithKline. Epix gets $35 million up front, half of it to buy three percent of its stock. And Glaxo gets access to Epix' work with a family of proteins called G-protein coupled receptors. The deal covers development of new therapies for Alzheimer's and other diseases. Epix, which earned $1.3 million in the third quarter, stands to gain $1.2 billion in milestone payments. Those milestones reflect the potential upside of a successful new therapy for Alzheimer's.
The deal marks a big endorsement for Epix and another indication that Glaxo intends using licensing and acquisitions to convince analysts that it has control of some future blockbusters. Glaxo announced just last week that it is buying Domantis and analysts say that more deals are likely in the near future.
- see the press release on the deal
- read the AFX report