Key points:
- Valirx shares plunged 20.8% on delays in sub-licensing its VAL201 drug.
- The licensing company TheoremRx is yet to secure funding for the project.
- Investors were not pleased with the news, hence, the selloff in VAL shares.
The ValiRx Plc (LON: VAL) share price plunged 20.8% after announcing that the sub-licensing of its VAL201 drug candidate to TheoremRx had hit some delays in securing funding from investors due to the current global challenges.
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ValiRx said it had re-executed the Letter of Intent signed on 2 November 2021 with a new exclusivity period of up to the end of June 2022. Therefore, TheoremRX should have secured the necessary funding to continue developing the drug by that time.
On its part, TheoremRx pointed to the current uncertain global geopolitical and economic environment as the main reason behind the delay in securing funding for the VAL201 drug candidate.
However, the firm is currently negotiating with investors to secure the funding. It is confident that it will secure the funding despite investors taking much longer to make decisions as they do thorough due diligence compared to the past.
ValiRx said it has been working closely with TheoremRx’s Chief Scientific Officer to identify potential partners that would conduct the subsequent VAL201 clinical trial in the United Kingdom.
Investors were unhappy that the letter of intent (LOI) signed in November 2021 remained unbinding. As a result, there are no guarantees that the license agreement will eventually be executed or generate any revenues for Valirx.
The markets generally eschew uncertainty, and all Valir did today was say that it was not sure if the deal would proceed. There is a significant chance that the deal will fall through if TheoremRx cannot secure funding by the June 2022 deadline.
Dr Suzy Dilly, ValiRx CEO, commented: “Although the sub-license of VAL201 to TheoremRx has taken longer to complete than initially anticipated, during the course of the past four months, ValiRx has been continuing to conduct due diligence on TheoremRx and its scientific plans and remains confident that it is well placed to conduct the ongoing development of the VAL201 programme. Our due diligence procedures are now complete, and during this final extension of exclusivity, we will continue to provide scientific support to TheoremRx’s trial start-up processes to ensure no further delays are encountered.”
Dr Patrick Frankham, TheoremRx’s CEO, added: “Working with the ValiRx team over the past few months has enabled us to commence building a relationship which will ensure that VAL201 is progressed efficiently once the sub-license is fully executed, but also ensured that the team we are building covers all the required expertise and has a shared vision for the future of TheoremRx. I am excited to be building the VAL201 project into our new pipeline of oncology assets.”
Valirx shares have fallen 37.24% in 2022, and the latest announcement does not inspire confidence among investors. However, the shares seem to have recently bottomed like many other UK shares.
*This is not investment advice. Always do your due diligence before making investment decisions.
Valirx share price.
Valirx shares plunged 20.83% to trade at 20.98p, falling from Tuesday’s closing price of 26.50p.