On December 30, 2019 XBiotech Inc. (NASDAQ: XBIT) reported that closing of the sale of the Company’s True Human antibody Bermekimab to Janssen Biotech, Inc. (Janssen), a Janssen Pharmaceutical Company of Johnson & Johnson (Press release, XBiotech, DEC 30, 2019, View Source [SID1234552629]). Upon closing, Janssen paid XBiotech $750 million, with $75 million held in escrow for 18 months. Should Janssen pursue bermekimab indications outside of dermatology, XBiotech could also receive up to $600 million in additional payments upon completion of certain commercialization authorizations. In addition to the bermekimab acquisition, Janssen and XBiotech entered into manufacturing supply and clinical services agreements. Revenue from these agreements are expected to generate positive cash flow for XBiotech over the next two years.
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While Janssen acquired all rights to bermekimab, XBiotech remains free to use its True Human Antibody discovery program to develop new antibody therapeutics targeting IL-1⍺ (the same target as bermekimab) and to commercialize these therapeutics for all non-dermatological diseases. XBiotech plans to re-enter clinical development expeditiously with next generation anti-IL-1⍺ therapeutics.
The Company plans to use proceeds from the sale and the services agreements to fund discovery and development of its next generation True Human anti-IL-1⍺ antibody program and to advance other antibody therapeutics in the Company’s pipeline, including its infectious disease program. The Company will also have sufficient cash to support a significant capital transaction, such as a stock repurchase, subject to final board review and approval.
John Simard, XBiotech’s President & CEO, commented, "We are pleased to have Janssen acquire bermekimab and look forward to seeing superior efficacy and safety of this True Human Antibody in ongoing dermatological clinical trials and beyond. The transaction is an important validation of our True Human platform and the cutting-edge science behind targeting IL-1⍺ and enables us to continue to exploit the vast potential for next generation True Human anti-IL-1⍺ therapeutics outside of dermatology. With the close of the transaction, we are in a stronger position to create extraordinary value for shareholders."