TORONTO (DOW JONES)--Shares of Canadian biotech Tekmira Pharmaceuticals Corp. (TKM.T) got a boost Monday from a drug-development agreement with pharma giant Roche Holding AG (RHHBY).
As reported, Tekmira is licensing its drug-delivery technology, called SNALP, to Roche for its first two products in the field of RNA interference, or RNAi, a promising new class of drugs that's believed to apply to many types of diseases.
If both products make it to Phase I testing, Tekmira would collect $18.4 million, with potential product-development payments of up to $32 million, plus sales royalties after approval.
In an interview, Tekmira's chief financial officer, Ian Mortimer, said the deal demonstrates that the company has leading technology in an important new field. He noted that Roche, which owns a 4% stake in Tekmira, had been studying the company's technology for about a year before committing to the agreement.
While Tekmira has its own RNAi drug candidates in development, with one expected to begin Phase I in the next couple of months, it's signed licensing deals with pharma companies to help finance development of its own pipeline. "We think there's lots of freedom to operate and lots of room for companies to advance products in the RNAi field," he said, adding that Roche isn't the only company that's taken an interest in Tekmira's drug-delivery technology.
Other companies that have licensed Tekmira's intellectual property include Alnylam Pharmaceuticals Inc. (ALNY), Takeda Pharmaceutical Co. (4502.TO), and Merck & Co. (MRK). Bristol Myers Squibb Co. (BMY) and Johnson & Johnson (JNJ) are evaluating the technology.
Mortimer said the company was in good shape financially before the deal, with enough cash to last through the second half of 2010. The Roche deal will "further strengthen" its balance sheet, and the company plans to give more detailed guidance when it reports quarterly results Wednesday.
In Toronto Monday, Tekmira is up 26 Canadian cents, or 27%, to C$1.23 on 231,000 shares. It traded as high as C$1.30 earlier in the session.
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