Cypress Bioscience Inks Deal - Analyst Blog

Recently, Cypress Bioscience, Inc. (CYPB) announced that it has inked a deal with Marina Biotech, Inc. (MRNA). The deal, which allows Cypress to acquire Marina’s patent rights and technology for autism candidate, carbetocin, is expected to boost the central nervous system pipeline (CNS) at Cypress.

The asset purchase agreement will see Cypress making an upfront payment of $750,000 to Marina. However, the value of the deal can increase to $27 million subject to the attainment of certain late-stage clinical and regulatory milestones, including the approval of the candidate by the US Food and Drug Administration (FDA). Moreover, Cypress will be responsible for financing all continuing development activities and will pay single-digit royalties to Marina on sales of the drug, if it hits the market.

Carbetocin, an intranasal therapy, is a long-acting analog of oxytocin. Oxytocin refers to hormone produced naturally that may benefit patients suffering from autism. The candidate has completed early-stage studies.

Apart from the asset purchase agreement, Cypress also announced another deal whereby Alexza Pharmaceuticals, Inc. (ALXA) licensed its Staccato nicotine technology to Cypress. The technology refers to a novel electronic multidose delivery system, which is designed to help people quit smoking.

Neutral on Cypress Bioscience

We currently have a Neutral recommendation on Cypress Bioscience, which is supported by a Zacks #3 Rank (short-term 'Hold' rating). While we remain optimistic about its marketed drug Savella’s sales potential, we are concerned about the company’s early-stage pipeline. We believe that the recently signed deals are in line with Cypress’ strategy to grow through acquisitions and in-licensing opportunities.
 
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