Sierra Oncology surges 50%, here is the catalyst

Sierra Oncology Inc. (NASDAQ: SRRA) shares are up 50% after the company announced a term loan deal with Oxford Finance LLC and the release of positive topline results from the vital Phase III MOMENTUM study.

The MOMENTUM study, a global double-blind, randomized trial, evaluated momelotinib in treating patients with myelofibrosis that are anemic and symptomatic that had previously received JAK inhibitor treatment. Interestingly, the study achieved both its primary and secondary objectives.

MOMENTUM Study achieves primary and secondary objectives

Sierra CEO and President Stephen Dilly stated:

The primary objective of the Total Symptom Score was met at more than 50%, while secondary endpoints of Transfusion independence and Splenic Response Rate were more than  31% and 23%, respectively. Co-principal study investigator Ruben Mesa commented:

Sierra to use a term loan to support momelotinib commercialization and launch

In the deal with Oxford Finance, a term loan will support commercial preparation and the possible launch of momelotinib. As of December 31, 2021, the company had cash and equivalents of $104.7 million. Dilly stated:

Sierra withdrew a first $5M term loan upon closing under the loan agreement terms with Oxford Finance, LLC. The company can access a further $120M in a number of tranches, with $70 million contingent on some pre-determined benchmarks, such as regulatory approval in the US and funding, with $50M available at the insurer's discretion. Furthermore, the Sierra's Series B Warrants mature in 75 days and, when completely exercised, would give the company approximately $33.3 million in cash.