ValiRx (LON:VAL) said this morning it is acquiring the biomarkers arm of Finnish firm Pharmatest in a deal that values the business at £137,000.
The AIM-listed drug developer is paying around £62,000 in cash (€75,000) and will issue Pharmatest with 15 million shares worth just over £75,000 at today’s prices. Pharmatest may also be entitled to royalty payments.
Strategically, the acquisition will enhance the group's research and development capability, ValiRx said.
Chief executive Satu Vainikka added: "Biomarkers are crucial for detecting cancer at an early stage and they are also key in optimising therapeutic strategy and monitoring therapeutic success.
“It is a market that is rapidly growing in size with the potential benefit for patients being significant, in addition to potential cost savings derived from across the pharmaceutical industry.”
ValiRx is two companies in one. It has a successful and growing diagnostics business and an R&D operation which is developing two potential cancer treatments, called VAL101 and VAL201.
The former is based on something called GeneICE, which is a tool for silencing rebellious genes.
In that respect it is similar to the cutting-edge siRNA technologies being used to target cancers.
However GeneICE has the potential to be more specific, longer-acting and carries with it fewer side-effects.
Developed by Imperial College, GeneICE is a platform technology, which means it has the potential to spawn a whole series of treatments for neurological and inflammatory diseases, although ValiRx is assessing its potential in hard-to-treat cancers.
Candidate 201, by contrast, has being developed to hit one target - refractory prostate cancer where there is huge unmet medical need.
ValiRx acquired VAL201 from an Italian research group in a deal brokered by Cancer Research UK, though much of the additional preclinical work is being carried out by academics at Oxford University.