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Stocks of Regen Biopharma (OTCMKTS:RGBP), a California-based biotech company, zoomed as high as 800 per cent on Thursday, April 8, and closed the session with a massive 571 per cent surge. Investors were not exactly surprised by this rise because this biopharma penny stock has already returned 14,000 per cent in the past one year.
But what is causing this eye-popping rally? Seems like it’s Regen’s licensing deal with cancer treatment provider Oncology Pharma (OTCMKTS:ONPH) that is behind this stock price surge.
What Does This Deal Have For Regen Biopharma?
The deal will see Regen give Oncology Pharma access to its patented mRNA research to develop a therapy to cure pancreatic cancer. The oncology firm will pay Regen a license fee of US$ 55,000 (non-refundable) by Tuesday, April 20, 2021.
Once the agreement comes into effect, Regen will get royalties of up to five per cent of the partner company’s quarterly net sale raised from the given licensed drugs.
The Californian company will also receive 10 per cent of all consideration shares at a fair market price that Oncology Pharma collects from the sublicensees.
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Regen stock has recorded a significant increase on the back of this deal. It has also been mentioned in a speculative discussion on penny stocks among Redditors.
Let us delve into this biotech stock’s price performance.
Regen Biopharma (OTCMKTS: RGBP)
The US-based biotech company focuses on the research and development of regenerative medical apps in the stem cell segment. It has a close share price of US$ 0.0141 and a macro market cap of US$ 41.40 million.
The healthcare stock has swelled as much as 1,310 per cent this year, up almost 14 times against the S&P 500 index that has returned 93.33 per cent relatively. Its recent surge has taken its return on equity to a 51.09 per cent high.
Regen Biopharma's One-Year Stock Performance Chart. (Source: EODHD/Others /Thomson Reuters)
Interestingly, the medical research firm stock exploded by over 1,409,900 per cent compared with its 52-week low of US$ 0.000001 per common share (May 12, 2020). It also registered a new 52-week high of US$ 0.021 per piece on Thursday.
Its all-time high closing price remains US$ 0.090 per share, which was recorded on November 17, 2017.
Currently, it is down by 84.44 per cent from its record high. Hence, it has a very tempting margin, but it is always risky to invest in penny stocks.
Disclaimer: The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.
