The market may have dropped lower on Monday, but that hasn't stopped the Starpharma Holdings Limited (ASX: SPL) share price from climbing higher.
In morning trade the dendrimer products developer's shares climbed 5% higher to $1.37.
Why did Starpharma's shares shoot higher?
This morning Starpharma announced that it has signed a Development and Option Agreement with UK-based pharmaceutical giant AstraZeneca to progress the development of a dendrimer enhanced product (DEP) version of an undisclosed AstraZeneca major marketed oncology medicine.
This is the second DEP commercial agreement Starpharma has signed with AstraZeneca. The first was an agreement for a multi-product licence which covers novel oncology drug candidates such as AZD0466.
According to the release, the agreement will see Starpharma conduct pre-clinical testing of the DEP version of the AstraZeneca oncology product.
Furthermore, at any time from the signing of this agreement and for a defined period after the completion of this testing, AstraZeneca may exercise its option and licence the DEP drug candidate for clinical and commercial development.
The release explains that if AstraZeneca exercises the option, an option exercise fee of US$5 million is payable to Starpharma, as well as industry standard development and commercialisation milestones and escalating royalties on sales.
Further details regarding the major oncology medicine involved, drug candidates, and terms of the agreement remain confidential at this time for competitive reasons.
Management also advised that if AstraZeneca does not exercise its option to licence the DEP drug candidate within the defined period, Starpharma has the option to license the rights to develop and commercialise it either itself or through a sub-licensee with milestones and royalties paid to AstraZeneca upon commercialisation.
Starpharma's chief executive officer, Dr Jackie Fairley, revealed that she was delighted with the agreement and sees a lot of potential from it.
She said: "We are delighted to sign a new commercial DEP agreement at ASCO with our long-standing partner, AstraZeneca. This agreement follows a successful research program under which we identified a promising DEP candidate with a number of potential benefits."
Adding: "This agreement represents the culmination of that work and this DEP product has the potential to provide significantly enhanced patient benefit. Unlike our first DEP agreement with AstraZeneca, which applies DEP to novel oncology drug candidates, this agreement is for an existing major AstraZeneca oncology medicine and provides further validation of the value of the DEP platform and its broad application to both new chemical entities and existing products."
This isn't the only announcement in the sector today. The Clinuvel Pharmaceuticals Limited (ASX: CUV) share price has tumbled lower after the U.S. FDA delayed a review of its SCENESSE product and the Medical Developments International Ltd (ASX: MVP) share price has pushed higher after signing a licensing agreement for its Penthrox pain management product with Mundipharma in Australia.
