On Thursday, Evotec SE ( EVO ) entered a technology development partnership with Novo Nordisk A/S ( NVO ) in cell therapy.

Evotec and Novo Nordisk ( NVO ) have significant expertise and a strategic focus on supporting stem cell-based therapies.

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To provide next-generation off-the-shelf cell therapy products for clinical development and possible commercialization, the companies will collaborate on developing advanced technologies in support thereof.

Under the collaboration agreement, Novo Nordisk ( NVO ) will fund technology development activities at Evotec's R&D site in Göttingen, Germany and at Evotec's certified cell therapy manufacturing facility in Modena, Italy.

Novo Nordisk ( NVO ) has the option to obtain exclusive rights to utilize the results of the collaboration for a pre-defined therapeutic area.

Evotec receives R&D funding, an undisclosed upfront, and possible milestone and royalty payments.

Cord Dohrmann, Chief Scientific Officer of Evotec, said: "Cell therapies have already proven to be highly effective and have the potential to become functional cures in many disease areas. Stem cell-based cell therapy is a promising approach to modulate and scale cell therapies to ultimately provide tailor-made, off-the-shelf cell therapies at reasonable costs."

Citing Sydbank analysts, Reuters noted that Novo Nordisk's ( NVO ) stem cell-based therapies for diabetes and cardiovascular diseases are still in the exploratory phase, and the collaboration with Evotec aims to unlock this potential further.

Reuters also highlighted Warburg Research analyst who suggested the partnership could be tied to Evotec's beta-cell implant program QR-Beta, with the initial upfront payment likely covering capacity, manpower, and a cost margin.

Price Action: EVO stock is up 4.80% at $3.49 at last check Thursday.

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Image via Evotec