Avenue stock surges ~15% on cash/stock licensing deal for neuromuscular disorder drug AJ201

Avenue Therapeutics (NASDAQ:ATXI) signed an exclusive license agreement with AnnJi Pharmaceutical to develop and sell AJ201 for treating spinal and bulbar muscular atrophy (SBMA)

Under the agreement, AnnJi will get $3M upfront and is entitled to future development, regulatory and commercialization milestone payments, plus royalties on net sales.

Avenue will also issue ~831.62K of its common shares to AnnJi with the initial closing of the transaction and up to an additional ~276.65K shares upon achieving a clinical milestone. This total would not be more than 19.99% of the Avenue's current outstanding shares.

The agreement includes the U.S., Canada, EU, Great Britain and Israel as exclusively licensed territories, according to the companies.

"With AJ201 leading the way, we are confident in the potential of our diversified portfolio of three assets to deliver value for investors in the near term and patients in the longer term," said Avenue CEO Alexandra MacLean.

AJ201 completed a phase 1 study in 2021, which showed the safety of the molecule. the drug is currently being studied in a phase 1b/2a study in the U.S..

SBMA, also known as Kennedy's Disease, is a genetic neuromuscular disorder disorder in which loss of motor neurons — nerve cells in the spinal cord — affects an area of the nervous system which controls voluntary muscle movement.

Miami-based Avenue was founded by Fortress Biotech (FBIO).

ATXI +14.29% to $1.28 premarket March 2