XBiotech (NASDAQ:XBIT) surged higher recently after the company announced a massive out-licensing deal worth $1.35 billion based on its antibody drug Bermekimab. Xbiotech had made a deal with Johnson & Johnson (JNJ) to outlicense its product Bermekimab, which is being developed to treat atopic dermatitis and hidradenitis suppurativa. XBiotech will use its own True Human Antibody platform for indications outside of dermatology. This will allow J&J to have a monoclonal antibody that inhibits IL-1 alpha for dermatology products. The True Human antibody platform has a lot of promise and is likely why it garnered so much attention from J&J.
Massive Deal On The Basis Of A Highly Promising Type Of Technology
This is a very good deal for XBiotech, because it offloads its monoclonal antibody to J&J for two dermatology products noted above. Atopic Dermatitis is a large opportunity for J&J to go after. It is expected that the market for Atopic Dermatitis could potentially reach $18.3 billion globally by 2027. This disease is also referred to as eczema and is known to cause red and itchy skin. The other skin disease, hidradenitis suppurativa, is characterized as painful lumps under the armpits or groin. The market opportunity for this indication is expected to reach $1.81 billion globally by 2028. XBiotech has a solid technology platform in place, therefore, it wasn't that hard for it to find such a nice deal. Monoclonal antibodies are ideal for targeting inflammatory disorders, but there is something far more promising about XBiotech's True Human Antibody platform. True Human antibodies are as the name suggests 100% derived from humans. The company has a proprietary method of screening patients who have natural immunity to diseases. Why would J&J want to acquire Bermekimab based on this platform? With the antibodies being derived from humans, the immune system doesn't view them as being foreign. Therefore, safety and efficacy can theoretically
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