ValiRx Shares Rallied 14% on New Entity to Develop Cancer Drugs

Key points:
ValiRx shares rallied 14.2% after forming a new entity to develop a new drug.
The company partnered with King’s College to develop CLX001, a cancer drug.
Investors cheered the partnership, as evidenced by today’s rally in VAL shares.

The ValiRx Plc (LON: VAL) share price rallied 14.2% after announcing the formation of a new subsidiary known as Cytolytix Limited (Cytolytix), in which it owns a controlling 60% stake. In addition, the new company has signed an IP License Agreement with King’s College London (KCL).

According to ValiRx, the IP contract is for developing CLX001, a triple-negative breast cancer project, through the preclinical stages up to the frig’s commercialisation. ValiRx owns 60% of the new entity, with Kings College holding 20% and the remaining 20% being split among the drug molecule’s inventors, Charles Chen and Martin Ulmschneider.

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CLX001 was initially developed to treat triple-negative breast cancer. Still, the peptide, formulated as a nanoparticle, can also be used to treat other solid tumour cancers that are hard to treat. The drug molecule is designed to destroy cancer cells precisely while avoiding excessive side effects.

Investors cheered the announcement that could unlock a new revenue stream for ValiRx if the drug is commercialised over the long term. ValiRx will fund the development of CLX001 through the preclinical stages and beyond as the majority shareholder in the new company.

The IP contract also includes milestone and royalty payments between the involved parties in case CLX001 is sub-licensed. While ValiRx will lead the drug’s development, oversight of the project will be provided by the Cytolytix Board, which includes representatives from KCL, ValiRx and the Inventors.

Dr Suzy Dilly, the ValiRx CEO, commented: “I am really pleased to announce the launch of Cytolytix today. This project is the first output of the strategy we launched in 2020 to bring new academic projects into our pipeline and is an excellent example of the innovative science being carried out in university departments…”

So, would I buy ValiRx shares? Yes, I would if the price stays above the 14.20p support zone. My profit target would be set at 20p, where I would take particle profits and wait for a rally to the 30p resistance level.

*This is not investment advice.

ValiRx share price.

The ValiRx share price rose 14.18% to trade at 16.27p, rising from Friday’s closing price of 14.25p.