Shares of PreMD Inc. (AMEX: PME) steadily rose in Monday’s trading, settling at $1.90, up 82 cents or 76 percent, at the market’s close. The move follows PreMD’s news it struck a deal with AstraZeneca Pharmaceuticals (NYSE: AZN) to market and distribute a noninvasive skin cholesterol test, for now named PREVU.Symptoms of coronary heart disease are normally only noted in advanced stages of the disease – most individuals afflicted show no evidence until they are stricken with a “sudden” heart attack, the most common cause of death in men and women over 20 years of age. The PREVU skin test may help asses an individual’s risk of coronary heart disease, reducing the risk of complications.
“This collaboration will support the use of innovative, cost-effective technology to improve cardiovascular health by helping to identify patients at increased risk of having cardiovascular diseases such as heart attack or stroke,” Adele Gulfo, vice president of Healthcare Innovation and Corporate Strategy at AstraZeneca, in a statement. “Identifying patients before they have an event is one of the most important challenges in American healthcare today.”
According to the press release, though the companies are waiting for U.S. Food and Drug Administration (FDA) response to a recent application for an expanded regulatory label, they are evaluating marketing options. AstraZeneca’s distribution rights allow it to market and distribute the test to the healthcare community, including hospitals and retail chains. The company also has a three month right to negotiate a global contract with PreMD.
Per the agreement, PreMD will receive $500,000 upfront, will be eligible for milestone payments of up to $6 million, and will receive a 20 percent royalty rate on net sales for the first $30 million generated through AstraZeneca.