ValiRx PLC shares surged 36% to 0.75 pence following the announcement that Ambrose Healthcare Ltd has exercised its option to license the company's VAL401 cancer therapy asset for up to £16 million plus royalties. The Essex-based life sciences company, which focuses on early-stage cancer therapeutics and women's health, secured the deal through its joint venture ValiSeek Ltd.
Drug Repurposing Strategy Shows Promise
VAL401 represents an innovative drug repurposing approach, utilizing a reformulation of risperidone, an established anti-psychotic medication that has demonstrated anti-cancer effects. The asset is being developed through ValiSeek, a joint venture between ValiRx (54% ownership) and Tangent Reprofiling Ltd, specifically formed to advance this repurposed therapy.
The licensing agreement, executed under pre-agreed terms from December 2023, positions Ambrose Healthcare to take full responsibility for VAL401's development and commercialization. As part of the deal structure, ValiRx will receive 576,000 shares in Ambrose, with clinical and commercial milestone payments totaling up to £16 million plus ongoing royalties.
Financial Structure and Development Commitment
The milestone payment structure includes an initial £6 million in milestones, which can be paid either in cash or equivalent value in new Ambrose shares. Beyond the milestone payments, Ambrose has committed to covering all future patent costs and completing the full development and commercialization program for VAL401.
"We are pleased to be able to complete this technology license for VAL401 with Ambrose and we have been working to identify multiple funding partners to progress VAL401 through the various clinical stages with several options under discussion," said ValiRx Chief Executive Officer Mark Eccleston.
Preclinical Validation Platform
ValiRx is exploring additional opportunities to support preclinical validation of VAL401 through its wholly owned subsidiary, Inaphaea Biolabs Ltd. The subsidiary maintains 19 pancreatic patient-derived cell models that can be applied in 3D systems, representing new approach methods that are receiving growing support from the US Food & Drug Administration for investigational new drug submissions.
This preclinical platform could provide valuable validation data to support VAL401's clinical development program, particularly given the FDA's increasing acceptance of alternative testing methods that reduce reliance on traditional animal models.
Market Impact and Strategic Positioning
The licensing deal represents a significant validation of ValiRx's drug repurposing strategy and provides the company with both immediate financial benefits and long-term royalty potential. The partnership with Ambrose Healthcare, a private UK specialist pharmaceutical company, ensures that VAL401 will have dedicated resources for its clinical development and eventual commercialization.
The transaction demonstrates the growing interest in drug repurposing as a cost-effective approach to cancer drug development, leveraging existing safety profiles of established medications while exploring new therapeutic applications.
