Cerulean inks collaboration with Novartis and nabs $20M equity investment at $1.25; shares up 78% premarket

|By:, SA News Editor

Nano cap Cerulean (NASDAQ:CERU) rockets 78% premarket on the heels of two positive developments.

First, it has entered into a $20M stock purchase agreement with Aspire Capital Fund, LLC under which Aspire bought 800K shares of common stock at $1.25, up almost 84% from yesterday's close of $0.6808. Cerulean has the right to sell up to the remaining $19M to Aspire over a 24-month period based on a formula linked to then-current market prices. It has also issued 700K commitment shares to Aspire. No warrants are involved.

Second, Cerulean has entered into a strategic collaboration with Novartis (NYSE:NVS) to develop nanoparticle-drug conjugate (NDC) product candidates for up to five targets. Cerulean will leverage its proprietary Dynamic Tumor Targeting technology with Novartis' proprietary compounds. It will be responsible for creating the NDC candidates while Novartis will be responsible for further development and commercialization.

Under the terms of the agreement, Cerulean will receive an upfront payment of $5M plus funding for five full-time equivalents (e.g., five full-time employees or 10 employees working half time). It will also be eligible for milestones and single-digit-to-low-double-digit royalties on net sales.