Biotechnology company Novacea and drug developer Schering-Plough said they signed a licensing agreement for prostate cancer treatment candidate Asentar. Novacea shares jumped as much as $9.19 or 114% to $17.25 before giving back some of the gains .
South San Francisco, Calif.-based Novacea, which is conducting late-stage studies on the drug candidate, will receive an upfront payment of $60 million, including a $35 million reimbursement for past research and development expenses. It will also receive a license fee of $25 million and a commitment from Schering-Plough to buy $12 million in Novacea common stock.
Novacea has the potential to receive pre-commercial milestone payments of up to $380 million and future royalties, the company said.
Schering-Plough will be responsible for all "forward development" costs and will fund commercialization of the drug.