NewLink Genetics Corp. (NASDAQ: NLNK) shares jumped on Tuesday after the company announced that it entered into an exclusive worldwide license agreement with Ellipses Pharma.

The agreement is for the development of and rights to commercialize NLG207 for the treatment of ovarian cancer.

Under the terms of the agreement, Ellipses purchased NewLink’s inventory of NLG207 related materials, and NewLink will have the potential to receive future royalty payments or a share of any future economics related to NLG207.

As part of the license agreement, Ellipses also gained the rights to develop and commercialize CRLX-301, a nanoparticle formulation of docetaxel that has completed a Phase 1a study.

Dr. Rajan Jethwa, CEO and founder of Ellipses, commented:

We are excited to have reached an agreement with NewLink on a worldwide license for NLG207. Our Scientific Affairs Group confirmed that this compound has shown some encouraging signs in Phase 2 trials and has the potential to improve the standard of care for patients with ovarian cancer that recurs after initial treatment. Our dedicated clinical trials team is eager to rapidly progress the development of this compound for patients suffering from a devastating disease and who currently have relatively few treatment options.

Shares of NewLink traded up about 15% at $2.25 early Tuesday, in a 52-week range of $1.13 to $2.37. The consensus price target is $4.00.

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