Astra Zeneca payment lifts C4XD just as it hits rock bottom
Drugs giant Astra Zeneca has paid Manchester-based pharma research business C4X Discovery US$11 million triggered by preclinical progress of C4XD’s treatment programme for inflammatory and respiratory diseases.
Under the terms of the licensing agreement announced in November 2022, AIM listed C4XD received an initial $2 million upfront payment and is potentially entitled to receive up to $400 million in preclinical, clinical development and commercial milestones, and to tiered mid-single digit royalties on future sales.
AstraZeneca is developing C4XD’s former NRF2 Activator programme to deliver an oral therapy for the treatment of inflammatory and respiratory diseases, with a lead focus on chronic respiratory disease.
Dr Clive Dix
Clive Dix, chief executive of C4X Discovery, said: “This significant preclinical milestone payment marks the progress AstraZeneca has made in driving the NRF2 Activator programme forward. NRF2 is a challenging target and this achievement provides further validation of our ability to generate differentiated, quality molecules in immuno-inflammation.
“We believe that our unique approach can deliver transformative oral therapies for patients suffering from immuno-inflammatory diseases. This is a great start to our year and we are confident of seeing further progress across our entire portfolio in 2024.”
The payment appears to vindicate an optimistic statement in December 2023 when Dix announced a drop in annual revenues and a deepening in pre-tax losses for the year to July 31, 2023, with just £1.71m coming in, causing losses of £13.416m.
Analysts at Panmure Gordon – also their nominated advisers – also issued a BUY note on the company as shares languished at an all time low of 8p, citing “ongoing income likely from its out-licensed programmes”.
UPDATE: Dr Julie Simmonds at Panmure Gordon commented: “C4XD has received an $11m milestone payment from AstraZeneca. We update our estimates. The payment, in addition to the divestment of the Orexin programme in July which generated £16m, means we expect the company to end the year (July) with Net Cash of £22m, the current market capitalization. C4XD is very good value with a strong drug development engine; there are few companies which have successfully developed and out-licensed three differentiated products. We reiterate our BUY recommendation.”
