(CYTK - Get Report)
soared after its partner
(AMGN - Get Report)
set plans to work on a new heart failure treatment.
Amgen will pay Cytokinetics an upfront payment of $42 million for licensing and access to its technology. It will purchase 3.5 million Cytokinetics shares at $9.47 a share.
Cytokinetics stock were gaining 14.2% to $8.54, while Amgen's shares rose 1.6% to $69.37.
The collaboration, which is worldwide outside of Japan, involves the discovery, development and marketing of a new treatment intended to activate heart muscle contractions. During the first two years of the plan, Cytokinetics will fund its own research. If the drug's development meets predefined criteria and certain other conditions are satisfied, Amgen will exercise an option to take over development and pay Cytokinetics a $50 million exercise fee.
Cytokinetics may also be eligible to receive payments of up to $600 million related to its lead drug, called CK-1827452, and other treatments developed as a result of the research. It may also receive royalties on sales of the drugs, and increase royalty gains if it helps fund late-stage human trials.
In that case, Cytokinetics could co-promote its drugs in North America at Amgen's expense. If Amgen chooses not to exercise its option, the collaboration agreement would end and Cytokinetics may choose to independently develop the drug.