Sareum Holdings

LN: SAR

Market Cap£125m

Last Close 3.65p

Sareum is a UK-based drug development company, specialising in small molecule kinase inhibitors. Its flagship programmes are its pre-clinical TYK2/JAK1 inhibitors, SDC-1801 for autoimmune diseases and SDC-1802 for cancer. SDC-1801 is undergoing advanced dose finding and toxicology studies with a target to file a CTA in mid-2021. Other programmes include the CHK1 inhibitor SRA737, out licensed to Sierra Oncology (Sareum holds a 27.5% stake of the economics of the licence agreement) and the de-prioritised FLT3+Aurora kinase.

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Investment summary

GlaxoSmithKline (GSK) has announced the acquisition of Sierra Oncology, Sareum’s licensing partner for its CHK1 asset SRA737 (held in partnership with CRT Pioneer Fund) targeting solid tumours. The deal values Sierra at $55/share (a 39% premium to the closing price on 12 April) for a total consideration of $1.9bn. As a reminder, SRA737 was in-licensed by Sierra in 2016 and Sareum holds a 27.5% stake in the proceeds of the licence agreement. Development work on SRA737 had been deprioritised (due to funding constraints) until recently, when Sierra indicated a revival in development work on a potential combination therapy. Sareum’s share price has responded favourably following news on the acquisition, suggesting that the market is expecting progress on the asset to accelerate given the significantly heftier resources at GSK’s disposal. We note that first patient dosing in any studies involving SRA737 will trigger a milestone payment of $2m (translating to $0.55m to Sareum).

Content on Sareum Holdings
Sareum Holdings – GSK’s Sierra acquisition, read-across for Sareum
Healthcare | research Flash note | 14 April 2022
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Sareum Holdings – Approaching the clinic
Healthcare | research Update | 9 March 2022
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Sareum Holdings: Edison Open House Healthcare 2022
Healthcare | Edison TV | 9 February 2022
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Share price graph
Price performance
%
1m
3m
12m
Actual (8.8) (36.0) 111.6
Relative* (9.4) (36.0) 92.4
52-week high/low 9.2p/1.5p
*% relative to local index
Key management
Tim Mitchell CEO
John Reader CSO
Stephen Parker Non-executive chairman