ValiRx PLC (AIM:VAL), a life science company focusing on early-stage cancer therapeutics and women's health, announced a service agreement with the newly incorporated US oncology company TheoremRx Inc.
It also said the intended sub-licence agreement with TheoremRx for the oncology candidate VAL201 is expected to be completed by the end of the first quarter this year.
Under the service agreement, ValiRx will work as a consultant to TheoremRx to engage with Clinical Research Organisations (CROs) and supporting vendors for the next clinical trial of VAL201.
VAliRx said it will receive a market rate, fair value consultancy fee for its services.
The service agreement follows a letter of intent between the two companies, announced on 2 November 2021, where they stated their intention to enter into a sub-licence that would enable TheoremRx to develop VAL201 in the field of oncology.
In the 2 November statement, ValiRx said the proposed sub-licence agreement would give TheoremRx a worldwide licence to ValiRx’s VAL201 intellectual property for a novel peptide targeting SRC kinase targeting oncology indications, while ValiRx would retain the rights to develop the VAL201 peptide for non-oncology indications, including VAL301 for endometriosis.
The potential value of the deal was estimated at over US$61mln plus royalties for the first cancer indication, with US$37.5mln for each later indication. ValiRx said it would receive payments on signature of the licence agreement plus fees and near-term milestones totalling US$2.2mln before the end of 2023, milestones on further clinical and commercial development events, and royalties.
It had expected the first payments by the end of 2021.
In today’s statement, ValiRx said the sub-licence completion, which is subject to a successful fundraise by TheoremRx, is expected by the end of the first quarter of 2022.
The letter of intent and proposed sub-licence therefore remain non-binding and ValiRx noted that there is no guarantee that the sub-license will be executed or that it will generate material revenues within the expected timeframe or at all.
ValiRx CEO Dr Suzy Dilly said: "The work we have done with TheoremRx since signing the Letter of Intent in November 2021 has involved both the negotiation and finalisation of documents between TheoremRx, ValiRx and CRT [Cancer Research Technology], but has also started the process of vendor selection for the next VAL201 clinical trial.
“This next trial will be sponsored and financed by TheoremRx, but ValiRx will continue to play a supporting role, providing project management and scientific expertise to ensure the trial runs smoothly in exchange for regular payments from TheoremRx.
“The signature of this agreement formalises the work that we have been doing and demonstrates the confidence that we have in the sub-license being fully executed in due course."
ValiRx shares fell 9.21% to 34.5p in late morning trade. The stock gained almost 20% in the last two weeks of December.