What happened
Shares of Arcturus Therapeutics Holdings(NASDAQ: ARCT) are skyrocketing today, up by 26.5% as of 11:15 a.m. ET. The huge gain came after Arcturus announced yesterday that it has entered into a strategic collaboration with CSL Seqirus, a unit of CSL Limited(OTC: CSLL.Y). The two companies plan to work together to develop and market messenger RNA (mRNA) vaccines targeting COVID-19, flu, pandemic preparedness, and three other respiratory infectious diseases.
So what
Like many vaccine stocks, Arcturus hasn't had a great year so far. Its shares had plunged more than 50% year to date before the collaboration news.
But investors rightfully applauded the deal with CSL. Arcturus will receive an up-front payment of $200 million. This will significantly improve the company's financial position. Arcturus remains unprofitable and had a cash balance of $283.5 million as of June 30, 2022.
Arcturus will share 40% of any profits on COVID-19 vaccines resulting from the collaboration. The company also stands to receive double-digit royalties on potential sales of other vaccines that it develops with CSL.
The match seems to be a good one. CSL is a global distributor of flu and pandemic vaccines. Arcturus brings its promising self-amplifying mRNA vaccine and lipid nanoparticle delivery technology to the table.
Now what
Arcturus hopes to have more good news in the near future. The company expects to receive Emergency Use Authorization in Vietnam within the next couple of months for COVID-19 vaccine ARCT-154. It also plans to soon begin a registrational study evaluating the vaccine as a booster.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CSL Ltd. The Motley Fool has a disclosure policy.
