(Alliance News) - Sareum Holdings PLC shares surged on Tuesday, after it said its co-development partner CRT Pioneer Fund entered into a development and commercialisation licence for SRA737 with an unnamed US biopharmaceutical company.
Shares in the Cambridge, England-based pharmaceutical company were up 27% to 75.39 pence each in London on Tuesday morning.
SRA737 is a clinical-stage oral, selective checkpoint kinase 1 inhibitor that targets cancer cell replication and DNA damage repair mechanisms
Sareum said an immediate upfront payment of USD500,000 is due to CRT Pioneer Fund.
Sareum said an additional fee made up of up to USD1.0 million cash and 500,000 shares in the licensee company may be payable upon the sooner 12 months following the signing of the licencing agreement, or if the licensee company achieves certain commercial and material financing objectives.
It said a further announcement regarding any future income, including any shares which may be issued, will be made "at the appropriate time".
Sareum added that additional payments of up to an aggregate USD289 million may be payable to CRT Pioneer Fund, subject to certain development, regulatory and commercial milestones which may or may not be achieved.
The licensee company will also pay tiered high-single-digit royalties to CRT Pioneer Fund on the net sales of any product successfully developed and commercialised, Sareum said.
Under the terms of Sareum's co-development agreements with CRT Pioneer Fund and Cancer Research Technology Ltd, Sareum is entitled to receive 28% of any income arising from this licencing of the SRA737 programme.
As a result, Sareum is entitled to receive USD137,500 from the upfront fee payable under the licencing agreement, as well as 28% of any future payments payable by the licensee company, including any shares received.
"SRA737 has shown considerable promise in earlier clinical studies, demonstrating a robust safety profile and preliminary efficacy, in particular in combination with low dose chemotherapy. With CRT Pioneer Fund, we are very pleased a partner has been identified to advance this exciting molecule into further development and believe this licensing agreement offers the best path forward for SRA737," said Sareum Chief Executive Officer Tim Mitchell.
"Sareum is entitled to a share of income from potential development and sales milestones from this agreement for SRA737 which have the potential to support Sareum's TYK2/JAK1 development pipeline. The team at Sareum is now focused on our lead programme, SDC-1801, which is progressing in clinical studies in Australia, and more broadly on TYK2/JAK1 inhibitors, a class which we believe has significant potential in autoimmune diseases and cancer."
By Greg Rosenvinge, Alliance News senior reporter
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