Nuformix NFX ) has announced a new contract win and published a comprehensive trading and business update in response to the COVID-19 pandemic.
Contract Win
Collaboration with VistaGen Therapeutics, Inc
Nuformix has entered into an initial collaboration with VistaGen (NASDAQ: VTGN), a US clinical-stage biopharmaceutical company developing new generation medicines for anxiety, depression and other central nervous system "CNS" diseases and disorders with a high unmet need.
Under the terms of the agreement, Nuformix and VistaGen will initially apply Nuformix's proprietary technology platform to develop patentable new crystalline forms of AV-101 that may offer superior delivery, an enhanced therapeutic profile and additional intellectual property protection.
If successful, Nuformix and VistaGen will consider opportunities to extend the collaboration to other CNS therapeutic candidates with a view to unlocking additional therapeutic and commercial opportunities.
Under the agreement, Nuformix will receive upfront and ongoing milestone payments. Furthermore, if the initial programme is successful, VistaGen and Nuformix will look to extend the collaboration across further programmes.
H. Ralph Snodgrass, PhD, VistaGen’s President and Chief Scientific Officer, said: “Nuformix has a successful track record of using cocrystal technology to re-engineer the crystalline form of small molecule drugs for their own development and for select partners. Their team is not only highly experienced, but also scientifically creative. We look forward to a productive collaboration.”
Trading Update
Importantly for investors, the Company has successfully implemented action plans to allow the team to continue to work, in-line with Government guidelines, throughout the COVID-19 lockdown.
Clearly, the business model is well-suited to the current operating environment with revenues continuing to flow from collaborations, such as the Ebers cannabinoid collaboration, which when coupled with low operating costs, preserves a strong balance sheet following the successful placing to raise £1.25m in November 2019 providing sufficient cash runway through the COVID-19 pandemic.
However, the lockdown in China has clearly exacerbated the already strained negotiations between Nuformix and Newsummit Biopharma “NSB”, and its new parent company Zheiiang Yatai Pharmaceutical and it now appears unlikely the Company will receive any of the £2.5m due in milestone payments.
To mitigate this impact, the Company has established a broader range of revenue sources and is currently in negotiations to out-licence all pan-Asian rights to the Company’s NXP002 programme.
Outlook
The Company has moved into 2020 focused primarily on securing an out-licensing agreement for its NXP002 programme, progressing early-stage R&D within its NXP004 programme and securing further revenue delivering collaboration agreements.
Whilst COVID-19 has impacted the timelines for concluding both commercial and research activities, the Directors strongly believe that a pan-Asia out-licensing agreement for its NXP002 programme remains highly likely to reach completion and the business has sufficient working capital to achieve this event.
The Company continues to make progress within its new and existing collaborative programmes, generating revenue and creating additional upside from further milestone events.
Shares in Nuformix have improved considerably off lows of 3.7p seen at the height of the COVID-19 crisis to 4.45p in early morning trading.
Dr Dan Gooding, Chief Executive Officer Nuformix, said:
“We are pleased to announce this collaboration with VistaGen and our first collaboration in CNS therapeutics. VistaGen and Nuformix have shared objectives in the development of new therapies and we look forward to making an important contribution to VistaGen’s comprehensive AV-101 programme and developing the relationship further.
"Following our recent equity fundraise of £1.25m before expenses and given that our operating costs are very low, our business model means that we’ve been well-placed to ride out the current worldwide issues. We’ve focussed expenditure on activities that deliver immediate benefit and maintain cashflow. In spite of some delays, our negotiations with prospective partners in Asia for NXP002 are in good order and we are in an excellent position to conclude discussions as the present COVID-19 situation improves, which will be transformative for the Company. Progressing our NXP002 and NXP004 programmes remains our priority and to create value for shareholders. Whilst we are optimistic, we remain conservative and focused on delivery across the board in both our in-house and collaborative development programmes.”