US deal hands Sareum share of potential $328m windfall
Sareum, the Cambridge cancer drug discovery company, saw its share price rise more than 144 per cent in the UK after carving out a slice of a potential $328.5 million.
The surge was fuelled by a potentially lucrative licensing agreement clinched by Sareum’s partner the CRT Pioneer Fund with Nasdaq-quoted ProNAi Therapeutics Inc.
The fund has licensed exclusive and worldwide rights for the Chk1 inhibitor cancer drug candidate CCT245737 (to be renamed PNT737) to ProNAi.
The deal secures an immediate upfront payment of $7m for the co-investment partners and an additional fee of up to $2m will be payable on the successful transfer of two ongoing Phase 1 clinical trials to ProNAi.
Additional payments aggregating up to $319.5m could become payable on achievement of certain development, regulatory and commercial milestones. ProNAi will also owe high single to low double digit royalties on the net sales of any product successfully developed.
Under Sareum’s agreements with Cancer Research Technology and the CRT Pioneer Fund, Sareum is entitled to 27.5% of these payments – around $90.4m.
Also, an unspent balance, estimated at c£300,000, of the financial commitment to the trial funding of £797,500 made by Sareum last December will be returned to the business.
ProNAi is a well-funded clinical stage drug development company advancing targeted therapeutics for the treatment of patients with cancer.
The company has a highly respected management team with a proven track record of success in oncology drug development.
PNT737 was originally developed in a research collaboration between the Institute of Cancer Research, London (ICR), Sareum Limited and Cancer Research Technology Ltd (CRT).
The programme was licensed to the CRT Pioneer Fund in September 2013 and a co-investment partnership with Sareum was formed to progress the candidate drug through clinical trials.
Dr Tim Mitchell, CEO of Sareum said: “This is a major achievement for our lead candidate as well as for Sareum. Starting with the initial discovery, we have contributed financially and scientifically to the ongoing development of the programme into clinical trials.
“The returns from this research investment will be realised in this licence agreement, validating our strategy and business model. ProNAi is in a strong position to further the development of PNT737 and plans to expand its development into the United States and with broader clinical studies.”