Sareum Holdings Plc (LON:SAR) is a specialist small molecule drug discovery and development company with programs in oncology and inflammatory disorders. Sareum is virtual, using collaborators and contract research organisations to progress its programs and then out-licensing them in return for up-front payments, future milestones and long-term sales royalties. Sareum, together with its partner CRT Pioneer Fund, has announced the exclusive licence and worldwide rights for its Chk1 pre-clinical cancer candidate CCT245737 (renamed PNT737) to ProNAi Therapeutics Inc, for $7m upfront, plus a total of $321.5m potential milestones, and sales royalties.
► Licensing agreement: Sareum and its co-investment partner, the CRT Pioneer Fund, has entered into an agreement with ProNAi Therapeutics Inc (NASDAQ:DNAI) for a potential of $328.5m (plus sales royalties) for the exclusive licence and worldwide rights for Sareum’s Chk1 inhibitor CCT245737 (renamed PNT737).
► Chk1 inhibitor: Chk1 inhibitors carry considerable potential to sensitise cancer cells to therapies targeted to damaging DNA and potentiate the action of the anti-metabolite drugs and DNA alkylating agents from the cisplatin family. They also have the potential to treat certain cancer types as a single agent therapy.
► ProNAi Therapeutics Inc: ProNAi is a NASDAQ listed clinical stage drug development company advancing small molecule in oncology. ProNAi is focussing in building up a broad and diverse pipeline by acquiring assets in pre-clinical development with the ultimate aim to be first-in-class or best-in-class.
► Risks: Clearly not without financial risk: a clinical pipeline with traditionally high attrition rates and funding needs The Company operates in a market dominated by larger competitors, but there is clear precedent that pharma/biotech are willing to pay high prices for the right preclinical/clinical assets.
► Investment summary: The deal changes the outlook of Sareum Holdings Plc. Not only it does remove the ongoing cost of the clinical trial (£300k to be returned) but also generates an upfront income of $1.9m/£1.4m and the potential for future milestones and royalties. The company will use this new resource to enhance its remaining pipeline.
