ValiRx is a drug development company with 4 therapeutic drugs in development. All have the potential to meet currently unmet medical needs & are targeting multi-billion dollar markets that are inadequately served by current drugs. The business model is focussed on progressing the clinical data of its therapeutic candidates & then concluding a partnering or an out-licensing deal.

• VAL201 leads clinical developments

  VAL201 is being developed for the treatment of androgen independent prostate cancer and hormone refractory prostate cancer. Now nearing the end of Phase I/II trials the compound has demonstrated consistent high safety and tolerability and signs of efficacy throughout its clinical study.

• VAL401 on the cusp of Phase III trials

  VAL401 has recently finished a Phase II trial as an oral treatment for late stage non-small cell lung cancer. Results showed the treatment had a statistically significant improvement in “Overall Survival” for patients with NSCLC compared to those receiving no treatment. Detailed discussions are ongoing over a Phase III trial, with first dosing anticipated next year.

• Further long-term upside from pre-clinical candidates VAL101 & VAL301

  VAL101 is a novel chemical entity, based on the company’s proprietary GeneICE gene silencing platform, which has been in the selection and drug optimisation phase to block/silence the expression of a gene expressing Bcl-2 protein & which has been implicated and associated with various cancers. VAL301 is currently in late-stage pre-clinical development, initially as a non-invasive, effective treatment for the non-cancerous gynaecological condition endometriosis.

• Risk weighted DCF valuation suggests potential upside of c.520%

  Our total probability of success weighted NPV for VAL201 and VAL401 is £54.64 million, more than six times the current market cap. This equates to a target price of 10.28p. Assuming successful approval for both drugs, the unrisked NPV rises to £115.16 million, suggesting c.13 times upside. We initiate coverage of ValiRx with a stance of Conviction Buy.

• RISK WARNING & DISCLAIMER

  ValiRx is a research client of Align Research. Align Research and a director of Align Research own shares in ValiRx. For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.

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