It’s shaping up to be a big day for medical news, as Entrada Therapeutics (NASDAQ:TRDA) shot up over 17% going into Thursday afternoon’s trading. The biggest reason? A whole new partnership was set up between itself and Vertex Pharmaceuticals (NASDAQ:VRTX).
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The market seemed happy with the move, sufficiently so to even drive Vertex up 1.6% in trading. The partnership calls for the duo to work on new treatments for Steinert’s disease, or Myotonic Dystrophy Type 1.
In aid of that, Entrada will land a hefty new supply of cash. Entrada will be paid $224 million upfront, and Vertex will take on an equity investment of $26 million.
That’s just for starters, though; ultimately, Entrada could land as much as $485 million in future payments, depending on various conditions that need to be met later.
Some might be concerned that pursuing Myotonic Dystrophy Type 1 may be too much of a niche product; reports suggest fewer than 200,000 people in the United States actually have the disease to treat in the first place.
As a result, Wall Street isn’t too enthusiastic about Entrada. Only one analyst is offering coverage on TRDA stock so far, Goldman Sachs’ Chris Shibutani. Worse, he only considers Entrada a Hold so far, with a price target of $18 per share, implying a downside risk of 13.46%.