Shares in Roquefort Therapeutics PLC (LSE:ROQ) jumped 8% to 1.84p after the biotech unveiled a deal that hands it worldwide rights to an experimental oncology drug, marking a sizeable shift towards treatments already in human trials.
Roquefort has agreed an exclusive licence for AO-252, a first-in-class candidate designed to block a protein called TACC3. This protein is found at elevated levels in several cancers and is linked to tumour growth and the spread of cancer cells.
The drug is now in a Phase I trial in the United States for advanced solid tumours, with early signs of tumour shrinkage and limited side effects, according to the company.
The agreement gives Roquefort immediate access to a clinical-stage asset, something the group has been targeting as it moves away from early discovery work.
Coiled Therapeutics USA will receive £25.5 million in shares if certain conditions are met, including a planned fundraising of at least £10.5 million and a shift from the Main Market to AIM. A2A Pharmaceuticals and investors it brings in are expected to contribute £3 million of that sum.
Because the share issuance is large relative to Roquefort’s current size, the deal is structured as a reverse takeover. If approved, the business will be renamed Coiled Therapeutics plc.
Further payments could follow if Roquefort’s market value climbs to set thresholds, while milestone payments of up to US$12 million and royalties of as much as 4% are built into the licence.
The board will also be reshaped, with senior figures from A2A Pharma and Coiled USA set to join. Chairman Stephen West said the transaction “realises our revised strategy to pivot towards targeting clinical stage assets.”