The Starpharma Holdings Limited (ASX: SPL) share price is bucking the market downtrend today after the biotech announced a new partnership deal.
The news isn’t quite as exciting as Mesoblast limited’s (ASX: MSB) FDA announcement, but shareholders will still be happy to see Starpharma rally 1.9% to $1.05 in late afternoon trade.
In contrast, the S&P/ASX 200 Index (Index:^AXJO) slumped 0.6% as ASX bank stocks dragged the market lower.
Why the Starpharma share price is outperforming
But the pessimism isn’t infecting Starpharma. Management said it signed a research partnership to develop several DEP nanoparticle formulations for an anti-infective drug.
DEP is Starpharma’s drug delivery technology and the partnership is with Tianjin Chase Sun Pharmaceutical Co., Ltd.
Chinese partner with deep pockets
Shanghai Stock Exchange-listed Chase Sun will foot the bill for the development program. Starpharma will initially develop its nanoparticle technology for an anti-infective product for the Chinese partner with the view of enhancing its performance and expanding its therapeutic utility beyond anti-infectives.
If Chase Sun wanted to use the technology in any commercial application, it will need to strike a license agreement with the ASX biotech.
The Chinese partner should have deep pockets as it reported annual sales of over $1 billion in 2019 and its current market capitalisation stands at around $3 billion.
Will the Starpharma share price play catchup?
“We are delighted to sign this new DEP partnership with Chase Sun. Chase Sun are a rapidly growing and innovative company in an important global market,” said Starpharma’s chief executive Jackie Fairley.
“This agreement illustrates the broad applicability of the DEP platform and will further develop the commercial potential of DEP in the anti-infective space, a therapeutic area of growing interest and need.”
Investors will be hoping that the news marks a turnaround in Starpharma’s share price. It fell 13% since the start of 2020.
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Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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