Cerulean Pharma Inc (NASDAQ:CERU), a microcap developing nano-particle drug conjugates (NDCs) as therapies for cancer, and focused on ovarian cancer, entered into a strategic collaboration with Novartis.
Shares leapt 39.54% to close Wednesday at $0.95, with 16.41 million traded. Average volume for the stock is only 661.48K.
Also fanning bullish fervor in the stock was the announcement of Cerulean’s common stock purchase agreement with Aspire Capital Fund, LLC (Aspire), a Chicago-based institutional investor, worth $20 million.
Cerulean Pharma Inc (NASDAQ:CERU) enters a technology platform collaboration with Novartis
Cerulean will develop NDC product candidates combining Cerulean’s proprietary Dynamic Tumor Targeting technology with Novartis’ proprietary compounds directed at up to five targets.
Cerulean will create NDC candidates, and Novartis is responsible for further development and commercialization of NDC products resulting from the collaboration.
Novartis will pay an upfront amount of $5 million to Cerulean, and funding for five full-time equivalents. Milestone payments based on clinical and regulatory developments, as well as royalties on regulatory approval, are also payable to Cerulean.
“This collaboration is further validation of our powerful technology platform, and we are excited that Novartis is including NDCs in its drug discovery and development efforts,” said Christopher D.T. Guiffre, President and Chief Executive Officer of Cerulean.
Cerulean Pharma Inc (NASDAQ:CERU)’s share purchase agreement
In a simultaneous development, Cerulean announced that Aspire Capital Fund, LLC had purchased 800,000 shares of common stock of the company for $1.25 per share following the execution of a $20 million common stock purchase agreement and a registration rights agreement with the latter.
Cerulean has the right to sell the remaining $19 million of its common stock to Aspire in amounts and timings as convenient, at prices according to formula linked to current market prices at the time of the sale.
“Controlling the timing and amount of common stock being sold is key, as we can use this facility to opportunistically strengthen our balance sheet without unnecessary dilution as we advance our CRLX101 and CRLX301 programs,” said Guiffre. “Aspire has been a longtime shareholder, and we appreciate their continued support.”
Cerulean Pharma Inc (NASDAQ:CERU): CRLX101
However, investors will recall that in August Cerulean said CRLX101 disappointed from a phase 2 study for the treatment of patients with advanced renal cell carcinoma. Shares plunged 56.2% on that day to $1.20 with a huge downside opening gap.
That gap is yet to be closed.
Following the debacle, Cerulean cut its workforce by half.
It is interesting that none of all that has deterred either Novartis or Aspire Capital Fund.