Healthcare company Opko Health (NASDAQ:OPK) shot up over 7% at the time of writing, and it’s all thanks to a big new move from Merck (NYSE:MRK) that could see it license a new vaccine from Opko. Investors are definitely happy about it, and the specifics of the deal look sharp as well.
Opko Health—or rather, its branch known as ModeX Therapeutics—established a deal that would have Merck develop its new Epstein-Barr Virus (EBV) treatment under a worldwide licensing agreement. The treatment, known as MDX-2201, addresses EBV, which is part of the herpes family. Those who get Epstein-Barr can also develop mononucleosis, a fairly common disease. With no treatments for EBV currently approved by the FDA, that could mean a huge new potential market.
The agreement calls for Opko to land a $50 million payment directly from Merck and then potential milestone payments and royalties that could reach upward of $872.5 million. The vaccine is said to attack EBV by specifically targeting four different proteins contained in the disease. This “multitargeting” aspect is actually a hallmark of ModeX Therapeutics and may be seen in future disease treatments to come.
Despite these very positive developments, hedge funds aren’t particularly pleased with Opko Health. Hedge fund sentiment is currently negative, as they sold off 1.5 million shares in the last quarter. This is also the eighth consecutive quarter that hedge funds have reduced their holdings of Opko Health.
