Intrexon (XON), ZIOPHARM (ZIOP) Paid an Extra $15M to Ram Through MD Anderson Deal

After surging earlier in the week, Intrexon Corporation (NYSE: XON) and partner ZIOPHARM Oncology (NASDAQ: ZIOP) are trading in opposite directions today. Notably, XON is up 5.2% and ZIOP is down 9.3%.

Both stocks have surged since announcing late Tuesday that they have entered into a exclusive CAR T license deal with MD Anderson. XON is up 38.4% since the announcement, while ZIOP is up 41%.

Under the terms of the agreement, MD Anderson shall receive consideration of $100 million; $50 million from each Intrexon and ZIOPHARM, payable in shares of their respective common stock, as well as a commitment of $15 to $20 million annually over three years for researching and developing the technologies.

Today, traders are pointing to an "Accelerated Closing Incentive" paid to MD Anderson by the two companies, which some traders say suggests the deal may have been extra promotional in nature. A filing with the SEC shows that the companies paid an extra $7.5 million in stock each to get MD Anderson to sign-off on the deal before the J.P. Morgan Healthcare Conference.

According to the filing, "Consequently, the Licensee Group would like to induce and incentivize MD Anderson to undertake any and all extraordinary efforts to expedite and/or shorten its contracting, review and approval processes and to conclude and execute the license agreement on or before 8:00 am PST, on January 14, 2015 (the “Accelerated Closing Deadline”)."

Needless to say, it worked.

You May Also Be Interested In

• Fisker (FSR) files form 10-K, sees more job cuts, reiterates going concern doubts
• Exicure Inc. (XCUR) Received Nasdaq Delinquency Notice on Late Filing of its Form 10-K
• Momentus Inc. (MNTS) Receives Nasdaq Deficiency Notice