Shares of Precision BioSciences (NASDAQ: DTIL) are moving higher premarket on Friday after the company announced a research collaboration and exclusive license agreement with Eli Lilly (NYSE: LLY).
The agreement will see the two companies utilise Precision's proprietary ARCUS genome editing platform for the “research and development of potential in vivo therapies for genetic disorders.” In the announcement, the two companies said their initial focus will be on Duchenne muscular dystrophy and two other undisclosed gene targets.
Genome editing technology enables the precise editing of the DNA in a living organism.
The agreement will see Precision receive an upfront cash payment of $100 million and an equity investment by Lilly of $35 million in Precisions common stock.
Depending on the development and commercialisation success of the product, Precision could receive approximately $420 million as well as tiered royalties.
“We look forward to working with Lilly to leverage our deep understanding of in vivo gene editing and experience with ARCUS to develop new therapies, including a potentially transformative treatment for Duchenne muscular dystrophy,” said Precision co-founder, Derek Jantz.
The announcement has resulted in Precisions share price rallying 38% premarket. However, it has fallen slightly and is now trading at $11.87 per share, up 22.62%. Eli Lilly shares are unmoved since Thursday's close at $143.41.