Disposal

RNS Number : 1564T

ValiRx PLC

23 September 2010

 



For release at 0700 on 23 September 2010

ValiRx Plc

("ValiRx" or "the Company")

ValiRx enters into an agreement for the sale of its Belgian Subsidiary, ValiBIO SA to Volition,

a Singapore-based cancer diagnostics specialist

ValiRx Plc (AIM: VAL), a life science company with a focus on cancer diagnostics and therapeutics for personalised medicine, is pleased to announce that it has entered into an agreement for the sale of its Belgian subsidiary diagnostic development business, ValiBIO SA ("ValiBIO"), to Singapore Volition Pte. Limited ("Volition"), a Singapore-based cancer diagnostics specialist, for a total consideration of $1.0 million.  The Board of ValiRx is pleased to report furthermore that as part of the transaction, ValiRx will continue to retain a significant share in the future upside value and revenues of ValiBIO and its embedded primary diagnostic technologies.  The agreement is conditional upon the receipt of the first instalment of the cash consideration and is expected to be completed on or before 30 September 2010 ("Completion").

The sale will ensure that ValiRx can concentrate the Group's focus on its core therapeutic, targeted and personalised cancer therapeutic and companion products, whilst benefitting from and realising the value and revenue generation inherent in ValiBIO's more peripheral R&D activities.  The sale will also ensure that ValiRx will see a commensurate reduction in its on-going cost base.

Under the terms of the agreement, ValiRx will receive $400,000 in cash, and shares to the value of $600,000 in Volition (the "Share Consideration").  The cash proceeds are receivable in four equal instalments of $100,000 each between Completion and 270 days after Completion. The Share Consideration is expected to be issued to the Company within 270 days of Completion.  In addition, ValiRx will receive all eligible expenses owed to the Company under the Wallonia regional funding agreement previously announced on 28 December 2009. The Company is also entering into a consultancy and services agreement with Volition, under which ValiRx will receive revenues from Intellectual Property management functions and other technical functions.  ValiRx will retain a significant share in the value and revenue upside, while management will benefit from a reduction in the time spent and cost associated with the necessity of supporting future ValiBIO non-core R&D activities.

In the financial year ended 31 December 2009, ValiBIO recorded a loss before taxation of €384,856 on turnover of €23,983.  Its net liabilities as at that date were €805,482.

The Company intends to use the cash proceeds for working capital purposes and to finance its development programme. The Company intends to retain the Share Consideration as an investment.  

ValiRx retains the rights over technologies and products currently under development including the HPV test in clinical validation. This means that ValiRx has full rights to use the technologies for use in diagnostic and prognostic companion products to its GeneICE programme, and other therapeutic products currently under development and this will apply to all future GeneICE applications.

On Completion, Dr George Morris will step down as Chief Operating Officer of ValiRx so as to be appointed Chief Executive of Volition. He will, however, ensure continuity by staying on the ValiRx board as a non executive director .  As part of the consequential reorganisation Dr Jake Micallef, former CEO of ValiBIO, will, at the same time, step down from the ValiRx board, but will remain with ValiRx as a technical officer.

Dr Satu Vainikka, CEO of ValiRx, commented:

"This transaction allows ValiRx to concentrate on its core value creating activities while retaining an interest in and benefit from the success of technology, which has been extensively developed during the time ValiBIO has been within the ValiRx group, but which is now developing a momentum of its own. With a substantially reduced cost base, but with the retention of a long term interest in the success of the technologies being sold to Volition, the Board of ValiRx looks forward to accelerating the roll-out of its GeneICE programme, along with other therapeutic products currently under development."

Laith Reynolds of Volition, said:

"We are delighted to have concluded this transaction and are very excited by the potential offered by ValiBIO's technologies under development.  With our successful track record and experience in diagnostics and commercialization, we look forward to bringing ValiBIO's technologies closer to commercial fruition in concert with ValiRx as a valued partner and shareholder."

Enquiries:

ValiRx plc
Dr. Satu Vainikka	Tel: [phone]
	www.ValiRx.com
WH Ireland Limited - Nominated Adviser
Robin Gwyn	Tel: [phone]
Hybridan LLP - Broker
Claire Noyce	Tel: [phone]
Peckwater PR
Tarquin Edwards	Tel: [phone]
	[e-mail]

Notes for Editors

ValiRx Plc

ValiRx Plc is a biopharmaceutical company developing novel technologies and products in oncology therapeutics and diagnostics. The product focus is in the epigenomic analysis and treatment of cancer, but the technologies can be applied to other fields as well, such as neurology and inflammatory diseases. 

The Company listed on AIM in October 2006 and is creating a portfolio of innovative products through investment in specific development projects.  It actively manages projects within this portfolio as a trading company and is not an investment vehicle.  The ValiRx business model spreads the risks of life science technology developments by minimising financial exposure and running a set of projects to defined commercial endpoints.  This maximises returns to shareholders by adding value at the earlier stages where value increases per investment unit are the greatest. 

The Company operates through the following divisional companies:

·      ValiMedix is the sales and distribution division of ValiRx

·      ValiBio is the diagnostic research and development division of ValiRx

·      ValiPharma is the therapeutics division with two embedded technologies primarily directed at the treatment of cancers. Of particular note is GeneICE, ValiRx's technology for controlling rebellious genes, which was awarded a Eurostars grant to the value of €1.2 million to fund the development of the GeneICE products through preclinical stages in cancer treatments.

Volition

Singapore Volition Pte. Limited ("Volition"), is a Singapore-based cancer diagnostics specialist , which has licensed IP, including a granted patent, from two highly respected research entities.  The company is managed by a well respected team with extensive experience in diagnostics and commercialization.

 

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