Caelum, a subsidiary of Fortress Biotech (NASDAQ:FBIO) has signed a pact with Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) to advance the development of CAEL-101 that help to eliminate or reduce Amyloid deposits in patients. The new formulation improves the functioning of organs in patients suffering from AL amyloidosis, a rare systemic disorder. If it is not cured in time, misfolded immunoglobulin light chain protein would be accumulated around the tissues causing damage to kidneys and heart. Fortress closed its last trading session at $2.11 on a volume of 367.5K shares.
Alexion to acquire an equity stake in Caelum
Alexion would acquire an equity stake in Caelum as agreed in the deal. It also has an option to purchase a balance stake in Caelum depending on the progress of the Phase 2 data at a prenegotiated financial deal. The company would make a payment of up to $60 million that includes regulatory, upfront and commercial milestone payments for the entire stake.
Value addition to shareholders
CEO, President, and Chairman of Fortress, Lindsay A Rosenwald said the deal with Alexion shows the expertise of Fortress in detecting and developing most promising treatments. The company established Caelum in 2017 on realizing the potential of CAEL-101 to prevent damage to kidneys and heart in patients suffering from AL amyloidosis. It provides value addition to the shareholders of Fortress. The company will continue to develop a robust line of products while it watches what the collaboration between Caelum and Alexion would bring in. The share prices of Fortress have surged past 53% on announcing the deal with Alexion. The wall street analysts have put a price target of $10.67 from the current level of $2.27. It indicates an upside potential of 430.68%. However, investors need to do their analysis before investing the funds in the stock.
Late stage development projects in progress at Fortress
Some late-stage developments in a pipeline at Fortress include Triplex to treat citomegalovirus, CK-301 to treat metastatic or recurrent cancers, CUTX-to cure Menkes disease, Intravenous tramadol to reduce post-surgical acute pain, CK-101 to cure frontline small cell lung cancer, and MB-107 for X-SCID. Fortress also markets its products like Luxamend, Triderm, Exelderm, Targadox, Ala-Quin, Cercade, and Ala-Scalp.