Valirx the next pharma takeover?

Tuesday, 30th June 2015 09:28 - by alanloki

Valirx a small cap AIM market cancer drug bio research company with a market cap  of just over £16mil could well be the next  cancer drug research company takeover target.

Presently priced on 25th June at .53p from a daily drop from .58p after a very decent RNS today with the long awaited  efficacy update on Val201 the company's headline prostrate cancer drug in phase 2/3,despite results today with low side effects the share impact was underwhelming to say the least.

 Increased cohorts are now already in place in UCLH for a higher dosage phase to see what side effects might show  and also effective data to see what results materialise from elevated Val 201 drug increase to eliminate tumours and their growth and the further potential for marketability .

This is Valirx she flatters but the sp does not generally  increase on good news,although after the consolidation of shares at 125 to 1 share last month in the new consolidated % Val has advanced in real terms from 33p to 53p, all in all not a shabby 1 month rise. But many of the holders of over 2 years are still under water, unless they averaged down.

So what has Val got in her chest of drugs apart from Val 201 (the present jewel in the crown), she is certainly not a 1 trick pony, Dr Satu Vainikka the CEO  and her team have an interesting and extremely  promising stable to present to the market now and in the coming years.

TRAC (transcript analysis  with the aid of affinity capture)

Enables the screening for a wide range of candidates for genetic safety and efficacy  markers. They are imperative for personalised medicine treatments.

GenICE technology

Which in layman's  terms can identify cancer cells and tumours,lock them up to inhibit growth and preventing migration to other parts of the body.

is able to screen a large number of drug candidates for a wide range of  generic and efficacy markers. Biomaterial are imperative for personalised medicine and add value to the company as it has been generating revenue since 2012 and with more client contracts  in the pipeline.

Valiseek (Val 401)

Is a joint venture with  Tangent Ltd to develop Val 401 primarily  with lung cancer and potentially  other indicator treatment .

Vali pharma

The therapeutic  division of Valirx with two embodied cancer treatment technologies.

Valifinn

The biomaterial and diagnostic  development  division.

Valirx  has patents in Europe, Japan,USA and Australia and various non disclosure agreements with various companies and last year signed a development agreement with DKFZ the largest biomedical  research institute  in Germany,  they are fully funded by the Federal Ministry  and the State of Baden-Wurttenburg.

Valirx  recently attended the prestigious Bio international convention in Philadelgphia on 14th to 18th June and it is anticipated  that a possible  joint venture may materialise. Valirx were Co funded  for this exhibition by The London Mayors export programme and the European  Regional Development Fund. According to Campbell Alliance Deal Makers intentions report (2013) most successful  deals in biopharma  industries  are a result of partnership events.

Why is the  MCAP of Val so low? It may well be that it is still under the radar and not fully recognised as to its potential or it is priced in to fail or maybe a rumoured fundraising in the near future, although the company state it is fully funded for the year. The company are vastly undervalued by their peers who are at a inferior stage process in the drug cancer stages of efficacy. Thecompany have also stated that they can't understand the very low MCAP valuations and expect it to greatly improve in 2015 and beyond.

The price has stalled over the last week and today pulled back on the very decent RNS.

Did investors expect a joint venture or take over today?

Did the company underestimate the milestone that was reached today?

Did short term holders cut and run hoping for a short term multi bagger?

Who can estimate all the possible vagaries  of the AIM market, far wiser men than me have tried  to unravel that conundrum and failed.

Myself, well I have great faith in one of the  drugs coming to the market in due course and today's  announced RNS puts Val 201 in the driving seat but watch out for Val 401 on anticipated  good news soon.

That will make today's  MCAP seem absurd and bb talk varies from a conservative £100 mil Mcap to £500 mil a far cry from today's values.

The question is do you  feel lucky for the joyride, and remember if the company is successful then think of a higher  level on how many cancer suffering  people will ultimately find the salvation of longer life benefits  and less suffering.

I feel lucky for them in the future. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.