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Ultragenyx & Arcturus Therapeutics Expand Existing Agreement

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Ultragenyx Pharmaceutical, Inc. (RARE - Free Report) and Arcturus Therapeutics Holdings Inc. (ARCT - Free Report) expanded their existing collaboration to discover and develop mRNA, DNA and siRNA therapeutics for up to 12 rare disease targets. Pursuant to the agreement, Ultragenx will pay $30 million of upfront payments to Arcturus, including $6-million cash for collaboration agreement amendment and a $24-million equity investment at $10 per share. Ultragenyx has an option to purchase an additional 600,000 shares of Arcturus’ common stock at $16 per share

Arcturus is entitled to preclinical, clinical, regulatory and sales milestone payments for each product developed under the collaboration. Under the amended license agreement, certain early-stage milestone payments are reduced and the total potential milestone payments are increased due to the expanded number of targets. Arcturus is also entitled to reimbursement of related research expenses and royalties on commercial sales.

With the agreement, Ultragenyx becomes Arcturus’ largest shareholder. With the expansion in agreement, Ultragenyx’s mRNA platform will strengthen and be further expanded to potentially treat more diseases. The company’s most advanced mRNA program, UX053, for the treatment of Glycogen Storage Disease Type III is expected to move into the clinic in 2020.  

Shares of Ultragenyx have surged 45.5% year to date compared with the industry’s growth of 6.2%.

The original collaboration and license agreement between the companies was signed in October 2015. The companies have been working together to develop mRNA therapeutic candidates for certain rare disease targets. 

Arcturus is an RNA medicines company with enabling technologies — LUNAR lipid-mediated delivery and Unlocked Nucleomonomer Analog (UNA) chemistry — and mRNA drug substance along with drug product manufacturing.

 

Zacks Rank and Stocks to Consider

Ultragenyx currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Anika Therapeutics Inc. (ANIK - Free Report) and Applied Genetics Technologies Corp. . Both the stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anika’s earnings per share estimates have moved up from $1.21 to $1.31 for 2019 and from $1.21 to $1.33 for 2020 in the past 60 days. The company delivered a positive earnings surprise in the trailing four quarters, with average beat of 72.00%.         

Applied Genetics’ loss per share estimates have narrowed from $1.25 to 1 cent for 2019 and from $2.39 to $2.15 for 2020 in the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with average beat of 83.47%.    

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