In a double dose of good news, Physiomics plc (LON:PYC) announced that the human Virtual Tumour ("VT") project being conducted with leading science and technology company, Merck, first announced in March 2015, has been successfully completed.
Further, Physiomics said that it had today entered into a master services agreement with Merck.
This is a significant milestone for the company as it will generate long-term revenues with management expecting income of £500,000 to be realised in the first 12 months.
The company’s shares surged 270% on the back of this news to hit an intraday high of 365p, matching its 12 month high.
Interestingly, it is just over five years since Physiomic's shares spiked as news of a tie-up with a top-five pharma company was announced.
Relationship with Merck strengthened
Not only is this development financially beneficial for Physiomics, it strengthens the group's relationship with a large multinational player and is an endorsement of the value that has been added over five years of working with Merck.
During this period, Physiomics has completed twelve projects involving pre-clinical, and more recently clinical predictions, with other projects in progress.
Management is of the view that the agreement represents a significant external validation of its Virtual Tumour technology, acknowledging its ability to successfully model the combination affects of treatments having different mechanisms of action at the cellular level, and its ability to scale this up to allow meaningful predictions of overall tumour growth.
Putting these developments into perspective, Dr Jim Millen, CEO Physiomics said: "We are very proud to be working with Merck, one of the world's top pharmaceutical companies, in an area as important and rapidly growing as oncology, and we believe this agreement marks the beginning of a new, longer-term relationship with this important client."