Humanigen (HGEN) has announced the execution of its first licensing transaction in the Asia-Pacific Region with Telcon RF Pharmaceutical, Inc. and KPM Tech Co., Ltd for development and commercialization rights to lenzilumab for COVID-19 for South Korea and the Philippines.
Shares in HGEN are rising 4.2% in Tuesday’s pre-market trading.
Telcon is an affiliate of KPM Tech and both companies recently invested in the Humanigen June 2020 PIPE offering.
Mr. Ji-Hoon Kim, CEO of Telcon and KPM Tech, said, “We… see lenzilumab as an excellent therapeutic solution for the hyperinflammation seen in COVID-19 hospitalized patients. Lenzilumab has a significant part to play in the treatment of patients in the pandemic and beyond.”
The licensing agreement includes payments of up to $20 million with $6 million as an upfront payment upon execution of the licensing agreement and the balance of $14 million in two payments based on achievement by Humanigen of specified milestones in the US.
Telcon and KPM Tech will be responsible for gaining regulatory approval and subsequent commercialization of lenzilumab in its territories. Humanigen will earn double-digit royalties following receipt of those approvals on net sales subsequent to commercialization.
According to Humanigen, the number of COVID-19 cases in South Korea and the Philippines is more than 412,000.
Humanigen believes that its GM-CSF neutralization and gene-editing platform technologies have the potential to reduce the inflammatory cascade associated with coronavirus infection.
It says its immediate focus is to prevent or minimize the cytokine release syndrome that precedes severe lung dysfunction and ARDS in serious cases of SARS-CoV-2 infection.
Shares in HGEN have soared 339% year-to-date, and analysts currently have a unanimous Strong Buy consensus rating on the stock, based on 3 Buys and no Holds or Sells. At $27, the average analyst price target implies 151% upside potential.
H.C. Wainwright’s Joseph Pantginis recently initiated coverage of HGEN with a Buy rating and $31 price target (188% upside potential), arguing investors “are not fully aware that lenzilumab could be on the market this year through an EUA and how advanced the company really is.”
Pantginis further commented, “We believe the shares should be attractive to a broader set of investors based on: (1) commercialization is on the horizon; (2) upcoming positive data news flow should be abundant; and (3) development in several indications continues, which could significantly expand the overall market potential.” (See Humanigen stock analysis on TipRanks)
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