Shares in Silence Therapeutics (LON:SLN) rose 20 per cent as the market continued to digest the news the group could earn as much as $65 million from a collaboration deal with Swiss giant Novartis (VTX:NOVN).
The focus of the study will be QPI-1002, an experimental kidney drug discovered by Silence, but licensed to American firm Quark.
The treatment is now being taken into phase II clinical trials.
The $65 million is Silence’s slice of a potential $680 million windfall of potential milestone payments and royalties negotiated by Quark.
Quark will receive $10 million up front. However it is not known how much of this sum will trickle down to Silence.
An injection of funds would go a long way to filling a potential funding shortfall predicted in the second quarter of next year.
Silence gets the name because its expertise is 'gene silencing', also known as siRNA technology.
This is a way of controlling or shutting down some of the 40,000 genes in the human body. It copies the body's own method of fighting a virus.
In theory the process could be used to tackle cancers and other diseases that traditional chemistry and biotechnology have failed to eradicate.
However there are just a couple of hurdles that need to be overcome with this cutting edge science.
First, the ‘siRNAs’ have a nasty habit of creating flu like side effects and second, they require a delivery technology to get them to the parts of the body where they are needed.
On both counts Silence is well ahead of the competition so far as the intellectual property, the delivery and the side effects profile are concerned.
Silence chief executive Phil Hayworth said of the Novartis collaboration: ‘We are delighted that Novartis has chosen to take this development option for QPI-1002.
‘This serves as further validation of Silence's leading AtuRNAi technology and we look forward to receiving the significant milestones as the development of QPI-1002 continues.’
At 1:00pm, Silence was up 1.2p or 20 per cent at 7.2p. The rise in the share price builds on yesterday’s momentum and comes amid reports that an overhang of 10 million shares has been cleared.
http://www.proactiveinvestors.co.uk/companies/news/20282/golden-silence-prospers-as-investors-digest-novartis-deal--20282.html
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