Amneal Pharmaceuticals Inc. (NYSE: AMRX) shares hit a post-IPO high in Monday’s session after the company announced a new licensing and supply agreement. The agreement will be effective March 22, 2019. Further terms of the agreement were not disclosed.

Essentially, this is a 10-year license and supply agreement for levothyroxine sodium tablets with Jerome Stevens Pharmaceuticals (JSP). The agreement includes an upfront milestone payment upon commercialization and a profit share on future sales of levothyroxine.

For some quick background: levothyroxine sodium tablets are used in the therapeutic areas of hypothyroidism and pituitary thyroid stimulating hormone suppression. The U.S. brand and generic market for levothyroxine sodium tablets is estimated to be roughly $2.6 billion in annual sales and 122 million annual prescriptions, according to IQVIA, for the 12 months ending June 30, 2018.

Rob Stewart, president and CEO of Amneal, commented:

Levothyroxine is one of the most compelling generic product markets in the United States today. With more than 120 million prescriptions per year, Levothyroxine is the most prescribed drug in the United States, and we see exciting opportunities to grow market share, given the evolving market dynamics in the space and the manufacturing and validation challenges associated with this product. Moreover, this agreement strengthens our long-term relationship with JSP, which has consistently manufactured Levothyroxine to a high-quality specification for more than 25 years.

Shares of Amneal were last seen up about 12% at $24.19, with a consensus analyst price target of $23.07 and a post-IPO range of $13.47 to $24.38.

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