EMV Capital (AIM:EMVC) has agreed to buy the key drug assets of Destiny Pharma, the former AIM-listed biotech that went into liquidation last month, in a deal worth up to £2.475 million.
The purchase, made through EMV’s subsidiary Moirai Acquisitions (Bidco), centres on Destiny’s XF platform, an antibiotic technology designed to kill bacteria more rapidly than traditional drugs and reduce the risk of resistance developing.
The main compound, XF-73, has already completed a phase IIb trial as a nasal gel to prevent post-surgical infections, with phase III trials planned before Destiny’s demise.
Under the agreement, Bidco will pay £475,000 upfront with up to £2 million more linked to future milestones.
These include starting a phase III clinical trial in the US, securing regulatory approval there, and receiving a potential one-off payment from a licensing deal with a Hong Kong-based pharmaceutical group.
The initial payment was covered by a three-year loan arranged by EMV Capital’s in-house corporate finance arm, with attached warrants giving lenders potential upside if Bidco’s value grows.
EMV has also led an equity raise of up to £725,000 to fund working capital, expected to complete this month once the new vehicle has been structured to qualify for the government’s Enterprise Investment Scheme tax relief.
If that fundraising is completed in full, EMV expects about £1.86 million to be added to its assets under management, including its direct stake in Bidco, which was valued at around £560,000 despite an initial outlay of only £100.
Dr Ilian Iliev, chief executive of EMV Capital, said: “This transaction represents another example of our capital efficient investment approach, whereby EMV Capital Partners is able to deploy its multi-disciplinary team to structure and execute complex venture building investment opportunities.
"Our investment is in the extremely important area of antimicrobial resistance, one of the top global public health threats, and specifically in preventing hospital infections and in particular post-surgical infections.”
Destiny Pharma, once valued at more than £100 million, saw its shares suspended in August 2024 before administrators were appointed. The company was formally placed into liquidation on August 1 this year.
It was best known for targeting hospital infections caused by Staphylococcus aureus, including methicillin-resistant Staphylococcus aureus (MRSA).
The XF compounds work differently to existing antibiotics: they can kill bacteria in any growth phase, are active against biofilms (clusters of bacteria that are notoriously hard to treat), and have so far not shown signs of resistance emerging.