Biotechnology company Assembly Biosciences (NASDAQ:ASMB) is getting plenty of love from the market after the company announced on Tuesday a 12-year partnership with Gilead Sciences (NASDAQ:GILD) to research and develop novel antiviral therapies. The company’s shares traded over 80% higher at the time of writing.
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Assembly is expected to receive a $100 million upfront payment, including a $15.2 million equity investment from Gilead at an approximate 20% premium, which has also committed to buying up to 29.9% of Assembly Bio’s outstanding voting stock.
“Advancing the next wave of innovation in virology remains a core focus for Gilead as we seek to address the unmet needs of people affected by serious viral infections around the world,” said Tomas Cihlar, Senior Vice President of Virology Research, Gilead.
Under the terms of the agreement, Gilead is eligible to acquire exclusive rights to all of Assembly Bio’s present and future programs, including the two preclinical programs that the pharmaceutical company is licensing through ASMB.
The agreement also gives Gilead the right to take over Assembly Bio’s R&D and commercialization but will have to pay $45M if it chooses to do so. Likewise, Gilead has agreed to pay up to $330M in potential regulatory and commercial milestones per program it selects. In addition, Assembly Bio stands to gain as much as $75M in royalties through the agreement.
What is the Target for ASMB Stock?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ASMB stock based on one Buy, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average ASMB price target of $3.00 per share implies a 134.38% upside potential.
