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TESARO Inc (NASDAQ:TSRO) has announced that it has reached an agreement with Janssen Pharmaceutical, a subsidiary of Johnson & Johnson. As per the agreement, the two companies would collaborate on the development and commercialization of niraparib, worldwide. The drug is targeted at patients suffering from prostate cancer. The drug is also undergoing phase-3 trials for ovarian and breast cancer.

The CEO of TESARO, Lonnie Moulder, expressed excitement at working with Janssen, claiming that the later was a leader in the field of prostate cancer. Moulder also stated that with this agreement, the two companies can accelerate efforts to provide sufferers with treatment options. The CEO also hinted at possibly expanding the franchise, to increase its value. It should be noted here that Janssen would still not be allowed to commercialize the drug in Japan.

As per the details of the agreement, Janssen would pay $35 million, to TESARO as upfront, with another $415 million to be paid in several milestones. Moreover, Janssen would also be liable to pay royalties on sales of the drug. Furthermore, the company would also be responsible to pay for all future development and commercialization activities related to the drug, in prostate cancer. Even with Janssen doing all the heavy lifting, Johnson & Johnson has also decided to separately invest in TESARO. This would be done through an equity investment, worth $50 million, at a share price of $44.24.

The main reason for Johnson & Johnson taking a special interest in the drug is mainly the fact that the company’s own drug for prostate cancer, Zytiga, is losing significant market share. This is due to the growing competitiveness in the market and the rising popularity of Medivation Inc’s Xtandi. Zytiga was responsible for generating revenues of $2.23 billion, making it the company’s third best-selling drug.

TESARO Inc (NASDAQ:TSRO) closed trading at a share price of $47.59, after gaining 11.19% in terms of its share value, during the April 6 trading session.

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Steve Kanaval: Portfolio Manager/Writer/ Market Analyst Steve began his career in the Trading Pits in Chicago making markets at the Chicago Mercantile Exchange (NYSE:CME) the Chicago Board of Trade and the CBOE in the early 80’s. He ran the Morgan Stanley Derivative Prop Trading for the firm specializing in Index Arbitrage. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90’s managing large portfolios. Steve is known as an expert in MicroCap Technology Stocks and the emerging Digital Currency markets as a Portfolio Manager for his Family Office. Steve has managed portfolio’s in volatile asset classes for 3 decades as a commodity trader, hedge fund manager and digital currency trader and miner. Steve publishes his views on the asset classes in a public forum and has published more than 10,000 articles simplifying these complex and volatile assets for readers. His work is published on multiple sites including Bloomberg, Equities.com, Hacked.com, CryptoCurrencyNews as a paid contributor. His work includes research, journalism and archived video on important market volatility related to stocks, digital currency and other volatile misunderstood asset classes. He offers a humorous, unique insight and the related back stories and drivers for readers interested in volatility and emerging market assets. Full disclosure Steve is long 25 digital currencies and sits on the board of multiple public companies involved in digital currencies, and owns shares in these companies from time to time.

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