Sareum Provides Update on Licensing Agreement Regarding SRA737, a Chk1 inhibitor in Clinical Development Targeting Solid Cancers

Sareum Provides Update on Licensing Agreement Regarding SRA737, a Chk1 inhibitor in Clinical Development Targeting Solid Cancers

Amended agreement expected to clear path to advancing clinical development of SRA737

Cambridge, UK, 12 November 2020 – Sareum Holdings plc (AIM: SAR), the specialist drug development company delivering targeted small molecule therapeutics to improve the treatment of cancer and autoimmune diseases, announces that amended terms (the “Amendment”) to the 2016 licensing agreement between Sierra Oncology, Inc. (“Sierra”) and CRT Pioneer Fund LP (“CPF”) for the Chk1 inhibitor SRA737 (the “CRT License Agreement”) have been agreed between the two parties.

Details of the Amendment have been published in Sierra’s Form 8-K, filed with the US Securities and Exchange Commission (SEC) today, and are set out below.

Overview of SRA737

SRA737 is a clinical-stage oral, selective Checkpoint kinase 1 (Chk1) inhibitor that targets cancer cell replication and DNA damage repair mechanisms. Preliminary Phase 2 and comprehensive preclinical data suggest SRA737 may have broad application in combination with other oncology and immune-oncology drugs in genetically defined patients. 

SRA737 was discovered and initially developed by scientists at The Institute of Cancer Research in collaboration with Sareum, and with funding from Sareum and Cancer Research UK.

SRA737 was licensed by CPF to Sierra in September 2016 for up to $328.5 million in developmental, regulatory and commercial milestones, plus royalties on the net sales of any product successfully developed. Sareum was eligible to receive 27.5% of the economics equating to up to $88 million in milestone payments, plus sales royalties, as SRA737 advances.

Details of the CRT License Agreement and the Amendment

Pursuant to the CRT License Agreement, Sierra made a one-time upfront payment of $7.0 million to CPF in October 2016 and paid $2.0 million to CPF in January 2017 for the successful transfer of two ongoing Phase 1 clinical trials. Sareum received a total of approximately $2.5 million from these payments. 

Under the terms of the original CRT License Agreement, additional milestone payments of up to an aggregate of $319.5 million were payable to CPF upon the achievement of certain developmental, regulatory and commercial milestones, including a milestone payment of $7.5 million upon the dosing of the first patient in the first Phase 1 trial of SRA737 in the United States, and a payment of $12.0 million upon the dosing of the first patient of a randomised Phase 2 trial of SRA737.

Pursuant to the terms of the Amendment, Sierra and CPF have agreed to a decrease in the additional milestone payments of up to an aggregate of $290.0 million that may be payable to CPF upon the achievement of certain developmental, regulatory and commercial milestones, including a milestone payment of $2.0 million upon the dosing of the first patient of the first trial of SRA737 following the Amendment.

In the event that the milestone payment for a milestone event, as defined in the CRT License Agreement, becomes due, but no milestone payment for an earlier milestone event has been paid, then the milestone payment attached to the earlier milestone event will automatically become due and payable contemporaneously with the payment for the later milestone event. Sierra will accrue for any future milestones payments once they are considered probable of occurring.

In addition, Sierra remains required to pay CPF, on a product-by-product and country-by-country basis, tiered high single-digit to low double-digit royalties on the net sales of any product successfully developed.

Sareum continues to be eligible for 27.5% of the economics of the CRT License Agreement, as amended.

Sareum’s CEO, Dr Tim Mitchell, commented:

“We believe this revised agreement between Sierra and CPF clears the way for the further clinical development of SRA737, either internally or through a partner, giving Sareum the potential to benefit from downstream milestone payments.

“While the aggregate level of these milestone payments is reduced, we are confident that this amendment will expedite the advancement of the SRA737 programme in a timely manner. We look forward to further updates on the clinical development of SRA737, a molecule that has shown great promise in clinical trials and preclinical studies, particularly in combination with other types of cancer therapy.

“In parallel, we continue to invest our own cash resources to progress our exciting wholly owned TYK2/JAK1 inhibitor programmes towards the clinic as planned.” 

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

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