First Wave BioPharma Announces Licensing Agreement with Sanofi

Shares of First Wave BioPharma Inc. (FWBI, +8.61%) skyrocketed by an impressive 71.7% during active premarket trading on Thursday. The biopharmaceutical company revealed an exciting agreement with Sanofi (SNY, -0.73%) to license their product, Capeserod, for repurposing and development in gastrointestinal indications.

Impressively, trading volume swelled to 6.5 million shares, surpassing the full-day average of approximately 2.6 million shares. This surge in activity placed First Wave as the third-most actively traded stock during Thursday's premarket session.

First Wave disclosed that the licensing agreement includes a "modest" upfront payment, milestone payments, and "single-digit" percentage royalties on sales. However, specific details regarding these amounts were not provided.

First Wave's CEO, James Sapirstein, expressed his enthusiasm for the exclusive worldwide license obtained from Sanofi for Capeserod. He stated, "Securing an exclusive, worldwide license from Sanofi for Capeserod is potentially a transformative event for First Wave that adds a drug with a well-documented safety profile to our GI-focused development pipeline."

Despite the recent improvement, First Wave's stock has experienced a downturn, closing below $1 every day since July 13. Year to date, the stock has slumped by a significant 92.9%. In comparison, the iShares Biotechnology ETF (IBB, -0.30%) has seen a comparatively mild decline of 3.2%, while the S&P 500 (SPX, +0.12%) has achieved a solid gain of 16.4%.