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CytomX Therapeutics (CTMX) Stock Jumps 50% on Moderna Deal

Investor Place · 01/06/2023 14:45
a number of test tubes and capsules are pictured under a cool blue light representing biotech stocks
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According to a Reuters  report, the $35 million agreement represents an upfront payment to CytomX. Of this tally, $5 million will be allocated toward “prepaid research funding.” Further, according to a joint statement made by the two parties, CytomX will be eligible for up to approximately $1.2 billion in future milestone payments.

Under the deal, CytomX will also receive access to Moderna's mRNA technology. This innovation served as the backbone of the company’s Covid-19 vaccine. Up to Dec. 14, 2022, medical professionals administered more than 247 million doses of Moderna's Covid-19 vaccine, which is now marketed as Spikevax. In turn, Moderna will gain "access to CytomX’s Probody platform, used in the development of cancer therapies targeting diseased tissues."

Finally, Reuters reports that Moderna will also "pay tiered royalties to CytomX on global sales of any products which enter the market under the deal.” The company will also have “the option to participate in a future equity financing by CytomX” as part of the agreement.

This deal announcement arrives at an opportune time for both enterprises. On a trailing-year basis, CTMX stock has dropped by around 40%. Meanwhile, MRNA stock has shed nearly 17% over the same period, a considerable fall although comparatively better.

CTMX Stock May Benefit From mRNA Tech

Fundamentally, the forwarding of the mRNA-undergirded Covid-19 vaccine bodes very well for CTMX stock. While mRNA technology has long been researched, the tech didn’t reach mainstream awareness until the pandemic. Back in November 2018 — well before Covid-19 entered the lexicon — QYResearch Group called mRNA “a rather versatile technology” with numerous advantages, including a “favorable safety profile.”

According to CytomX's website, its Probody  therapeutic is "designed to outsmart cancer by exploiting the unique conditions of the tumor microenvironment by localizing treatment in the tumor and limiting activity in healthy tissue." Thus, Moderna's mRNA tech will likely offer significant pertinence, leading to the big jump in CTMX stock.

Economically speaking, the mRNA subsegment also represents a sizable market. Data from Grand View Research indicates that, in 2021, the global mRNA therapeutics market reached a value of $39.9 billion. By 2030, experts project a sector revenue tally of $37.76 billion.

Presently, CTMX stock commands a market capitalization of just under $170 million. Therefore, the licensing deal with Moderna may accelerate the underlying company’s therapeutic ambitions.

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On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com  Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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