Shares of San Diego based La Jolla Pharmaceutical (NASDAQ: LJPC) are flying on Tuesday after the company revealed it has entered into an exclusive licensing agreement with PAION AG for GIAPREZA and XERAVA in the European Economic Area, the United Kingdom and Switzerland.
The terms of the deal dictate that La Jolla will be entitled to receive an upfront payment of $22.5 million along with potential milestone payments of up to $109.5 million and double-digit tiered royalty payments based on net sales of GIAPREZA and XERAVA. PAION, in exchange, will have an exclusive license agreement in the territories mentioned.
Both drugs are approved by the European Commission.
“We are excited to have PAION as a partner and expect its commercialization expertise will be invaluable in maximizing the value of GIAPREZA and XERAVA in Europe,” said Larry Edwards, President and CEO of La Jolla.
La Jolla shares rose to highs of $6.16 immediately after the US opening bell. They are currently trading at $5.54, up 41%.