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On tap on Thursday's news Zalicus (ZLCS) shareholders read:

"On April 24, 2012, Novartis and Zalicus entered into an Amendment to the Collaboration Agreement (the "Amendment"), to extend the funded research program under the Collaboration Agreement for an additional year until May 1, 2013 and to modify the basis for up to $3.0 million in funded research payments under the Collaboration Agreement from the funding of Zalicus full-time equivalents to payments based on Zalicus combination screening
deliverables."

This was good news for Zalicus investors as this was one 2012 variable that otherwise loomed as a risk. Now that risk is over for another year. Zalicus shareholders learned that Novartis (NYSE:NVS) has extended its combination high through-put [cHTS] for another year. This is one of the most bullish signs I've seen coming out of Zalicus since shareholders learned about the success of Z160 in phase 1 clinical trials.

However, while I don't own shares here, I can't help but express sheer joy for Zalicus shareholders. By Novartis extending the cHTS contract for a second extended year is a HUGE VOTE OF CONFIDENCE. Enough so, I'd overlook my angst with Haydu and Hunter being nominated for re-election and last year's $20M loan that I thought was the wrong move.

Meanwhile, the bullied stock seems to be getting kicked around for no reason. With Synavive marching through phase 2B clinical trials and Prednisporin being the champion ocular medicament in Sanofi's (NYSE:SNY) pipeline, I have long championed the potential value of the oncology research highlighted by the Zalicus-Novartis partnership. I alone have often noted the Novartis patents that hint to the long-term value for Zalicus.

So when the stock rose to $1.09 on Thursday and then closed at $1.08, I cheered for the Zalicus faithful. Of course some have tried to portray the company as less than desirable, but the biotech space at these levels is likened to sandlot baseball. Scruffy players with a long-term eye see the potential in Zalicus even if the beaten down stock is struggling to stay above $1. That of course is the biggest risk here.

But risk aside, Zalicus shareholders are waiting for news on Z944. In my estimation, that is the next big catalyst. If Z944 successfully completes phase 1 clinical trials, Zalicus will be the envy of those biotechs stock investors wished they got into early. I will kick myself if I do not own shares on that day!

In 2H 2012, the news story will be Synavive's phase 2B results. I am not quite there yet as I want to know where the ion channel program is heading. Synavive's failure would definitely hurt the share price, but the real upside for cHTS believers would be Synavive entering phase 3 clinical studies.

But back to the Novartis-Zalicus partnership. With multiple patents in place, particularly for multiple myeloma, it appears Zalicus is a scruffy sandlot baseball biotech team. Even the short recalcitrant news release on Thursday caught my eye -- straight to the point -- no fluff, no spilling glasses of water or knocking over the bully microphone. In rare form, Zalicus is signaling to the street that it is back and it is not going away.

I genuinely look forward to Z944 news. If it's positive, then a 25-50% pop is very likely and well-deserved. I am hoping that SA author Stephen Simpson may someday cover this stock because he is the #1 Healthcare writer for SA and has a way of drawing market attention.

Congratulations Zalicans!

Source: Bullish Sign: Zalicus Shareholders Receive Good News

Additional disclosure: Investors buy and/or sell at their risk. As a private investor, I reserve my right to buy and/or sell at any time. I submit articles to SA as a freelance writer. My articles represent my opinion which is subject to change.