Bavarian Nordic set to earn $975 million in Prostvac deal

Danish biotech firm Bavarian Nordic (OMX: BAVA) has granted US pharma major Bristol-Myers Squibb (NYSE: BMY) an exclusive option to license and commercialize Prostvac, its investigational Phase III prostate-specific antigen (PSA)-targeting cancer immunotherapy in development for the treatment of asymptomatic or minimally symptomatic metastatic castration-resistant prostate cancer (mCRPC).

Bavarian Nordic saw its share price rocket 27.7% to 36.95 Danish kroner this morning following the announcement,

Given that Prostvac gains regulatory approval, it will be the second prostate cancer vaccine to come to market, after that of US firm Dendreon’s Provenge (sipuleucel-T), but the Danish company’s product has shown greater efficacy, rights to which have recently been acquired by Canada’ Valeant Pharmaceutical International (TSX: VRX) from bankrupt Dendreon (The Pharma Letter February 11).

Under terms of the deal with B-MS, Bavarian Nordic could earn as much as $975 million, and will receive an upfront payment of $60 million. B-MS can exercise the option in its sole discretion within a designated time after data is available from the ongoing Phase III trial.