Why Prime Medicine Stock Soared Nearly 12% Higher on Monday

Next-generation healthcare company Prime Medicine (NASDAQ: PRME) was exactly what the doctor ordered for ailing portfolios on the first trading day of the week. On a company update and news of collaboration with a top healthcare business, investors piled into the gene-editing specialist and sent its share price almost 12% higher today. That compared very favorably with the 0.4% gain in the bellwether S&P 500 index.

A new development deal

Arguably the more significant of the two pieces of news was that partnership deal.

Prime Medicine announced that it had signed a strategic research collaboration and license agreement with global pharmaceutical company Bristol Myers Squibb. The partnership will concentrate on the development of reagents (substances added to compounds to produce a chemical reaction) for use in T-cell therapies. Prime Medicine is to use its Prime Editor gene-editing platform to develop these reagents for its partner.

In its press release trumpeting the deal, Prime Medicine quoted CEO Keith Gottesdiener as saying, "Through this effort, we will apply our Prime Editing technology beyond the rare genetic diseases in our internal pipeline, potentially unlocking opportunities in areas of high unmet needs in immunological diseases and cancer."

A new focus

The other encouraging news was the business update. Prime Medicine pledged to focus its development efforts on a group of high-value programs. Each of these is to target an affliction with, as the company put it, "well-understood biology and a clearly defined clinical development and regulatory path." The company will also prioritize programs that could potentially expand their scope into other opportunities for business.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb. The Motley Fool has a disclosure policy.