NEW YORK (TheStreet) -- Shares of NewLink Genetics Corp. (NLNK) - Get Report are up 19.93% to $35.20 after the company said it entered into an agreement with Roche Holding (RHHBY) to develop NewLink's cancer immunotherapy, making the Ebola vaccine developer eligible to receive over $1 billion in milestone payments, according to Reuters.
Immunotherapies are a class of drugs designed to help the body's own immune system fend off disease.
Iowa-based NewLink, which holds the commercial license for an Ebola vaccine developed by the Canadian government, will receive an upfront payment of $150 million under the worldwide licensing deal from Genentech, a unit of Switzerland's Roche, Reuters said.
Under the agreement, the companies will develop a NewLink inhibitor, NLG919, that is designed to disrupt the mechanism by which tumors evade the patients immune system.
TheStreet Ratings team rates NEWLINK GENETICS CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NEWLINK GENETICS CORP (NLNK) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NEWLINK GENETICS CORP's earnings per share declined by 17.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, NEWLINK GENETICS CORP reported poor results of -$1.24 versus -$1.12 in the prior year. For the next year, the market is expecting a contraction of 15.3% in earnings (-$1.43 versus -$1.24).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 29.5% when compared to the same quarter one year ago, falling from -$7.08 million to -$9.16 million.
- Net operating cash flow has decreased to -$7.04 million or 44.95% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Biotechnology industry and the overall market, NEWLINK GENETICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The revenue fell significantly faster than the industry average of 43.4%. Since the same quarter one year prior, revenues slightly dropped by 8.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: NLNK Ratings Report