Omega Therapeutics Shares Sink 18%, Giving Back Some of Meteoric Gains

Omega shares almost doubled Thursday after the company said its flagship’s Pioneering Medicines initiative, and Novo Nordisk will jointly advance an obesity management program through preclinical development and conduct foundational activities. After that Novo Nordisk could further advance the program including through human proof-of-concept studies.

Under the terms of the agreement, Novo Nordisk will reimburse the research and development costs and has the right to select one target to advance for clinical development. Omega and Pioneering Medicines are eligible to receive as much as $532 million in upfront, development and commercial milestone payments, as well as tiered royalties on annual net sales of a licensed product.

Omega shares traded at $4.38 around noon, with Friday's slump trimming the gains in the first four trading days of the year to 45%.