ValiRx Plc (LON:VAL) is a clinical-stage biopharmaceutical company focused on the development of therapeutics for the treatment of cancer. The company has two leading assets: VAL201 (Phase I/II) – a peptide for advanced prostate cancer and potential to treat other hormone-induced indications; and VAL401 (completed Phase II) – a novel reformulation of risperidone, for advanced lung cancer. Both drugs are targeted at multi-billion-dollar markets that are inadequately served by current drugs. VAL is in a joint venture with the SEEK group for the VAL401 programme, with ValiSeek having agreed Letters of Intent with two partners to progress VAL401 further into the clinic.
Strategy: VAL operates as a virtual business, outsourcing most of its activities. The core strategy is to develop its therapeutic assets through the early clinical pathway, and then seek a partner/licensing deal to complete the development programme and regulatory submissions to commercialise the products.
VAL401: VAL401 is a proprietary formulation of risperidone for use in latestage lung cancer patients. The completed open-label Phase II trial with VAL401 confirmed the palliative effect of the drug, showing improved survival times, together with an improvement in the quality of life of the patients treated.
Partnership deals: On the back of the Phase II trial results, ValiSeek, the VAL joint venture company for the VAL401 programme, has been seeking partners to progress the drug into late-stage development and has agreed Letters of Intent with two international partners (from the US and from Europe) to co-finance it.
Risks: New and/or first-in-class drugs carry the risk that they might fail in clinical trials. However, the substantial safety history of the active ingredient in VAL401 mitigates these risks. ValiSeek is looking for external financing with its new partners to fund a late-stage trial.
Investment summary: ValiRx appears to be under-appreciated by the market. Reasons for this include the lack of institutional shareholders and a continuing need for more capital to advance its clinical programmes, thereby building value. On the back of clinical progress, the company is attracting potential commercial partners to help pay for the costs of late-stage development. This should be the catalyst needed to attract institutional investors into the company.