Valeant Pharmaceuticals Intl Inc (NYSE:VRX) compensated payment of $4 million against the licensing privileges for Eyegate Pharmaceuticals Inc (NASDAQ:EYEG)‘s drop device. The former firm will also compensate amount of up to $99 million in form of royalties. Stephen From, the CEO, stated that the deal is worth over $100 million. Following this update, the biotech stock jumped over 200%, hitting $3.73 per share. However, in the coming trading session, the stock failed to sustain the gains and closed in red.
Both the biotech stocks are expected to remain volatile in coming sessions. Eyegate and Valeant closed an initial contract in 2015, which gave latter rights to EGP 407. The latest agreement is for a different symptom – cataract treatment, while the first deal focused on the treatment of uveitis. As per the company’s CEO, they intend to use royalties on developing other compounds, which can be an eye drop with hyaluronic acid as the major compound.
Eyegate will shift its energy on that aspect in the clinic. They’ll focus energy as well as resources on this eye drop. The agreement seems an interesting step provided what Papa cited at the J.P. Morgan Healthcare Conference earlier this year. He had said that they have achieved a lot of mergers and acquisitions in the past. That’s not working to be something the company is anticipating in the future.
Regarding assets growth, Papa added that the pharmaceutical firm would focus on specialty markets such as dermatology and eye care. This was in retort to the firm’s tussles, which started last March.
Valeant’s difficulties began in last March, when the firm pinned the blame on its previous CFO and ex controller, Howard Schiller, for wrong representation of earnings. The drug maker has since been inspected for its suspected accounting difficulties and sharp price hikes on medications it bought during years of deals fueled by debt.