Myovant Pops 20% On Pfizer Drug Collaboration; Goldman Sticks To Buy

Shares of Myovant Sciences surged 20.5% after the biopharma company announced a collaboration with Pfizer (PFE) to jointly develop and commercialize ORGOVYX – a drug for the treatment of prostate cancer and women’s health disorders.

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Per the deal “Myovant will receive up to $4.2 billion, including an upfront payment of $650 million, $200 million in potential regulatory milestones for US Food and Drug Administration (FDA) approvals for relugolix combination tablet in women’s health, and tiered sales milestones upon reaching certain thresholds up to $2.5 billion in net sales for prostate cancer and also for the combined women’s health indications.” (See MYOV stock analysis on TipRanks).

Myovant (MYOV) said that ORGOVYX has been approved by the FDA on Dec. 18 for treating adults with prostate cancer. The company noted that, “ORGOVYX is the first and only oral GnRH antagonist for men with advanced prostate cancer.”

Myovant CEO Lynn Seely said, “Pfizer is the ideal partner for Myovant given its impressive capabilities and track record across both oncology and women’s health. This transformative collaboration will significantly strengthen the upcoming launch of ORGOVYX and the potential launches of relugolix combination tablet in women’s health, while substantially enhancing our financial position and enabling us to expand our pipeline of potential new medicines.”

Following the announcement, Goldman Sachs analyst Paul Choi reiterated a Buy rating and the price target of $30 (9.5% upside potential). Choi believes that the deal is “a positive strategic step” that should ease investors’ concern about its ability to self-commercialize the drug.

The analyst said that the deal terms are attractive, and collaboration with a larger partner should improve the commercial outlook of ORGOVYX.

The rest of the Street echoes Choi’s bullish sentiment, with a Strong Buy analyst consensus based on 6 unanimous Buys. With its shares down about 77% this year, the average price target of $36.17 suggests upside potential of about 32% to current levels.