Prana Biotechnology Ltd. (PRAN) -- a biotech company working on therapies for debilitating neurological disease -- saw its shares shoot up some up 50% to $1.92 on Wednesday, Jan. 2, after getting a promised $31.4 million investment.
Boston-based Life Biosciences, a private biopharmaceutical company, is seeking the stake in Prana, and will also lend at least two new big-name board members to the Australia-based drug developer. In total, Life Biosciences could own up to 60% of Prana when the deal is completed.
Prana is seen as attractive because of its work on a treatment for atypical Parkinsonian disease, a degenerative disease similar to Parkinson's that often fails to respond to traditional treatments.
Under the deal, Life Biosciences will first invest $7.5 million, and then, after Prana raises an additional $2 million from other investors, will make an additional investment of up to $31 million with other investors. All of the transactions will be in Australian currency, which is currently equal to a total of about A$44.5 million.
Calling the investment in Prana an "important endorsement" in the biotech's research around neurodegenerative disease, Prana CEO Geoffrey Kempler said in a statement that the financing would help speed up potential development of new drugs.
Life Biosciences' co-founders, Tristan Edwards and David Sinclair -- a tenured professor Harvard Medical School's Department of Genetics -- will also join Prana's board.
"We are very pleased to support the advancement of Prana's neurodegenerative treatments for atypical Parkinsonian diseases," said Sinclair in a statement.