Clinical-stage drug discovery, development and manufacturing company Sutro Biopharma, Inc. (STRO) recently announced that it has entered into an option agreement with BioNova Pharmaceuticals Limited to develop and commercialize STRO-001, a CD74-targeting Antibody-Drug Conjugate (ADC), for patients with hematologic cancers, in Greater China, including mainland China, Hong Kong, Macau and Taiwan.
Following the news, shares of the company appreciated 3.3% to close at $19.22 on Tuesday.
Under this agreement, BioNova will pay Sutro an initial licensing option payment of $4 million and potential payments totaling up to $200 million, subject to the achievement of certain milestones.
Notably, Sutro will provide STRO-001 to BioNova under certain clinical and commercial supply service agreements. For its commercialization, Sutro will receive tiered, double-digit royalties based on annual net sales of STRO-001 in Greater China.
The CEO of Sutro, Bill Newell, said, “We believe BioNova is an ideal partner, having demonstrated success in business and clinical development and backed by marquee healthcare investors, to realize the potential for STRO-001 in multiple hematological cancers in Greater China, where there is a large unmet medical need.” (See Sutro stock chart on TipRanks)
Recently, Wells Fargo analyst Nick Abbott reiterated a Buy rating on the stock with a price target of $30, which implies upside potential of 56.1% from current levels.
Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average Sutro price target of $31 implies upside potential of 61.3% from current levels. Shares have gained 61% over the past year.