(Alliance News) - Cizzle Biotechnology Holdings PLC shares jumped on Monday after it announced that it acquired an additional 5% interest in the commercialisation of the Covid-19 treatment AZD 1656.
Shares were trading 15% higher at 2.92 pence each on Monday afternoon in London.
Cizzle is a London-based diagnostics developer focused on creating a blood test for the early detection of various forms of lung cancer.
The company said that it entered an agreement with Conduit Pharmaceuticals Ltd and St George Street Capital Ltd to acquire the 5% economic interest in the Covid-19 treatment AZD 1656.
AZD 1656 is a treatment for inflammatory pulmonary and cardiovascular disease caused by Covid-19.
The total consideration for the transaction is GBP1.9 million. Cizzle said it will settle the amount with the issue of 47.0 million new ordinary shares at 4.0 pence each.
This would represent a 57% premium to the closing mid-market price of 2.55p on February 11.
The diagnostics developer will initially pay GBP1.0 million in 25.0 million shares.
Following completion of the initial payment, Conduit will hold a 9% interest in the diagnostics developer.
The remaining GBP880,000 in 22.0 million shares will be paid after shareholders approval was received, or at the first anniversary of the deal completion.
St George Street recently reported the "successful" completion of its clinical trial, which showed a "strong trend" towards reduced mortality in patients receiving AZD 1656, Cizzle noted.
Both St George Street Capital and Conduit Pharmaceuticals are currently in discussions with multiple pharmaceutical companies about licensing opportunities for AZD 1656 for Covid-19 and potentially for further indications.
The agreement is in addition to Cizzle's existing interest in AZD 1656. In September, the company was granted future royalty payments from the commercialisation of the treatment.
It was reported that payments could reach GBP5 million, back then.
"The agreement announced today represents an important extension to our close relationship with SGSC and Conduit. On September 20 we announced we had acquired a stake in SGSC's AZD 1656 asset, providing the opportunity for the company to receive royalty payments of up to GBP5 million and shortly after SGSC contracted the company to develop an associated companion diagnostic test for which we will receive fees of up to GBP1 million," Chair Allan Syms said.
He added: "We are now pleased to have the opportunity to increase our stake by an additional 5% in AZD 1656, but significantly the economic interest will be uncapped. This new agreement supports the company's ambitions to expand its target customer base in the pharmaceutical industry and through a strategy of building a portfolio of early cancer detection tests, companion diagnostics and royalty-bearing stakes in significant drug assets significantly increase shareholder value."
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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Cizzle Biotech (CIZ)