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Oruka Therapeutics, Inc. (NASDAQ:ORKA), a biopharmaceutical company specializing in diagnostic substances with a market capitalization of $492 million, announced on Monday an exclusive licensing agreement with Paragon Therapeutics, Inc. The deal grants Oruka Therapeutics worldwide rights to develop, manufacture, and commercialize certain antibodies targeting IL-17A/F, a protein complex involved in inflammatory processes. The company’s stock has shown recent momentum, gaining over 17% in the past week, according to InvestingPro data.
As per the agreement, Oruka Therapeutics will pay Paragon up to $22.0 million based on the achievement of specific developmental and regulatory milestones. This includes a $1.5 million payment upon the nomination of a development candidate or initiation of a study essential for Investigational New Drug (IND) application, and an additional $2.5 million upon the first dosing of a patient in a Phase 1 clinical trial. While analysts maintain optimistic price targets ranging from $20 to $49 per share, InvestingPro subscribers can access detailed financial health metrics and additional insights about the company’s growth potential.
The agreement also stipulates that Paragon will provide Oruka with an exclusive license to its patents related to the antibodies, including their methods of use and production. Paragon has agreed not to generate any new anti-IL-17A/F monospecific antibodies for at least five years within the same field.
Oruka Therapeutics is obligated to pay Paragon royalties on sales of antibody products, calculated as a low single-digit percentage of net sales. The royalty payment obligation will decrease if there are no effective Paragon patents during the royalty term. The royalty term is set to end on the later of the last-to-expire licensed patent or 12 years from the first sale of a product by Oruka Therapeutics.
The agreement can be terminated by Oruka Therapeutics with 60 days’ notice, in the event of a material breach that remains uncured, or due to insolvency or bankruptcy to the extent allowed by law.
This strategic move by Oruka Therapeutics, Inc., based in Menlo Park, California, aims to strengthen its position in the market of in vitro and in vivo diagnostic substances. With a current Financial Health rating of "Fair" and analysts not anticipating profitability this year, investors should closely monitor the company’s development progress. The information provided in this article is based on a press release statement and InvestingPro data.
In other recent news, Oruka Therapeutics has made significant strides in its drug development and business operations. The company has initiated a Phase 1 study for its leading drug candidate, ORKA-001, and has plans to release interim data from this study in the latter part of 2025. H.C. Wainwright has maintained a Buy rating for Oruka, showing confidence in the company’s progress.
Oruka Therapeutics has also entered into a significant licensing agreement with Paragon Therapeutics, securing exclusive rights to develop and commercialize certain antibodies. This move is expected to strengthen Oruka’s portfolio in the biopharmaceutical space.
Additionally, the company has received approval from its shareholders for the conversion of Series A Non-Voting Convertible Preferred Stock into common stock. This decision is expected to increase the number of Oruka’s common shares in the market.
Oruka has also adjusted its financial statements to reflect a reverse stock split and an exchange ratio established during a recent merger. This adjustment is part of Oruka’s ongoing efforts to manage its financial and corporate structure effectively.
These recent developments indicate robust growth and potential for Oruka Therapeutics.
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