Calliditas Therapeutics AB (CALT) Gains on EU Licensing Deal

July 21, 2021 10:26 AM EDT
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Price: $30.05 +2.42%

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On July 21st, 2020, Calliditas Therapeutics AB (NASDAQ: CALT) announced that it has entered into a licensing agreement with STADA Arzneimittel AG ("STADA") for EU commercialization of Nefecon – CALT’s novel drug candidate with the potential to become the first EU approved treatment for Berger’s disease.

Under the terms of the agreement, Calliditas is entitled to receive an initial upfront payment of 20M EUR ($24m) upon signing and up to an additional 77.5M EUR ($91m) in future payments linked to pre-defined regulatory and commercialization milestones. STADA is also obligated pay tiered royalties on net sales expressed as a percentage between 20-30%.

Stifel analyst Anabel Samimy believes the partnership is the right move forward as it brings the “desired non-dilutive funding and strong royalty structure.” She views the agreement as a win for both sides, given that Nefecon is “fitting nicely into STADA’s specialty products portfolio, and CALT should benefit from its broad reach across the EU” and further highlights a strong royalty structure negotiated by the company “ranging from the low-20% range to low-30%. This is larger than our initial assumption of ~12% flat royalties in the region.”

On the Nefecon’s potential itself, the analyst remains highly optimistic about the drug’s prospects: “Nefecon still leads the competitive treatment landscape for IgAN, having demonstrated both proteinuria reduction (by a clinically meaningful and statistical level) AND eGFR stability at 9 months. Though we still await long-term data, CALT remains highly confident, pointing to an FDA, EMA, and NKF statistical analysis that determined a 97.5% probability of long-term renal benefit with a 1.13mL/min/1.73m2 eGFR differential over placebo at 12 months— Nefecon established more than 3x this level at 9 months (differential 3.9 mL).”

She currently models that Nefecon’s will be approved in the EU in 1H22 and keeps an eye on the US PDUFA date of 9/15/2021.

Stifel maintains a “Buy” rating on the shares and $29 price target.

CALT Shares are trading 2% higher following the announcement.

Written by Vlad Schepkov |

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