Vancouver-based RNA interference developer Tekmira Pharmaceuticals (
TSX:T.TKM,
Stock Forum) has signed an option agreement with chemical giant Monsanto (
NYSE:MON,
Stock Forum) granting them the right to obtain a license to use Tekmira’s delivery tech and IP for agricultural use.
Tekmira will receive a near-term payment of $16.5 million as part of the deal, and sees potential value of up to $86.2 million if milestones are hit.
Shares in Tekmira rallied from the open, starting the day at $13.54, up from a previous close of $10.79. At the time of writing, shares were up 27.9% from the previous day at $13.80.
Tekmira was trading at $5 in early July of last year and was sub-$8 in early December.
“The agreement announced today follows Monsanto's initial testing of Tekmira's proprietary delivery technology and the demonstration of initial positive results from use of that technology in the field of agriculture,” said a
company news release Monday. “The companies' agreement and research collaboration will now focus on the development of new innovative biological solutions for farmers, which have the potential to provide new options for sustainable pest, virus and weed control.”
Tekmira will provide lipid formulations for Monsanto's research and development activities. Monsanto may elect to terminate this option at their discretion.
"Our proprietary delivery technology is enabling the most advanced applications of RNAi therapeutics in the clinic. This new agreement points to the broad applicability of Tekmira's delivery platform, and underscores the promise of applying this science within the field of agriculture. We are pleased to have this additional validation of our technology," said Dr. Mark J. Murray, Tekmira's President and CEO.
"As a core pillar of our business strategy, we continue to seek out a wide range of partnerships where our technology can enable the programs of our collaborators," he added.