Biotechnology hopeful Oncimmune (ONC:AIM) hopes to make a 'significant impact' in tackling cancer in China. The disease is the biggest cause of death among the world's largest populated nation, with lung cancer the biggest killer, with more than 700,000 diagnoses every year.
Oncimmune has developed an early cancer detection technology, called EarlyCDT that uses a blood sample. Today's breakthrough licensing agreement, with Hong Kong-based biotech Genostics, will see the Far Eastern licencee develop, market and sell the EarlyCDT platform in China.
The deal is for an initial 36-month period and is subject to approval by the Chinese drug regulatory authority.
SAVING LIVES
‘Early diagnosis [of cancer cases] has the potential to make a significant impact as mortality increases sharply with advanced disease,’ Oncimmune's announcement states.
The AIM-listed company claims that its EarlyCDT platform is capable of detecting cancer up to four years earlier than other diagnostic methods.
Statistics suggest that cancer kills an estimated 7,500 people in China every day, or in excess of 2.7m annually.
VALUABLE REVENUES
This licensing agreement will bring in much-needed revenues for Oncimmune. The company is at an early stage in its development but in its last reported full year, to 31 May 2017, modest revenues of £0.22m were reported.
That revenue run rate will be bolstered substantially following today's announcement. Oncimmune will earn an 8% royalty on Genostics' gross EarlyCDT sales over a six-year period. Genostics has also agreed to guarantee a minimum royalty to Oncimmune of £15.7m during that multi-year period.
Genostics will also invest £10m in the UK company by subscribing for 6.4m new shares at 156p strike price. This represents a 49% premium to the Oncimmune 105p share price on 29 December. The stock has rallied more than 15% today to 121.5p.
