Sareum Holdings — New fund-raise and licence signal active 2025

Sareum Holdings (AIM: SAR)

Last close As at 13/03/2025

GBP0.17

0.00 (0.00%)

Market capitalisation

GBP21m

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Research: Healthcare

Sareum Holdings — New fund-raise and licence signal active 2025

Sareum Holdings has announced the acquisition of the licence for SRA737, a checkpoint kinase 1 (CHK1) inhibitor, in which the company had previously held a 27.5% economic interest. Following this acquisition, Sareum will be eligible for 63.5% of all future returns from the programme. SRA737 is a clinical-stage asset, having completed two Phase I/II trials with encouraging headline data, and we believe that this deal will provide Sareum with greater control over its development pathway and future plans. The company has also announced an equity raise for gross proceeds of £1.07m, against an issue of 8.56m shares, to an institutional investor. We expect this to provide greater flexibility to Sareum as it advances its pipeline, in particular lead asset SDC-1801, which is approaching Phase II studies, in autoimmune disorders.

Jyoti Prakash

Written by

Jyoti Prakash, CFA

Director, healthcare

Healthcare

Spotlight — flash

14 March 2025

Price 14.00p
Market cap £17m
Price Performance
Share details
Code SAR
Listing AIM

Shares in issue (excluding 8.56m shares related to the March 2025 private placement, to enter circulation on 18 March)

124.9m

Pro-forma gross cash
(including £3.4m and £1.1m from the October 2024 and March 2025 equity raises)

£6.0m

Business description

Sareum Holdings is a UK-based drug development company, specialising in small molecule kinase inhibitors. Its lead programmes are TYK2/JAK1 inhibitors, SDC-1801 for autoimmune diseases and SDC-1802 for cancer. Sareum initiated clinical trials for SDC-1801 in Australia in May 2023 (Phase Ia), reporting positive top-line data in June 2024. Other programmes include the CHK1 inhibitor SRA737, for which Sareum acquired the licence in March 2025, vs a previously held 27.5% economic interest.


Analysts

Jyoti Prakash, CFA
+44 (0)20 3077 5700
Arron Aatkar, PhD
+44 (0)20 3077 5700

Sareum Holdings is a research client of Edison Investment Research Limited

The £1.07m funding was executed through an issue of 8.56m shares (6.85% of existing share capital) at a subscription price of 12.5p/share (c 24% discount to the last trading price of 16.5p). This subscription does not entail the issue of attached warrants, although we note that it will have an impact on the exercise price of the warrants issued as part of the last raise in October 2024 (which will now be adjusted to 12.6p per warrant vs 20p previously). The company plans to use these additional funds to support development of the expanded portfolio (including SRA737 and lead programme SDC-1801) and for working capital purposes.

We believe the addition of another clinical-stage asset should bolster Sareum’s pipeline and help manage risks related to binary events, such as trial results. SRA737 is a clinical-stage CHK1 inhibitor targeting the DNA damage response network for the treatment of solid tumours. Developed in collaboration with the Institute of Cancer Research and the CRT Pioneer Fund (CPF), SRA737 was first out-licensed by the CPF to Sierra Oncology in 2016, under which it completed two Phase I/II trials, as a monotherapy and as an adjunct to low-dose gemcitabine, with encouraging headline data. Following GSK’s acquisition of Sierra in 2022, the rights to SRA737 were acquired by a privately held US biopharma in December 2023 before being returned to the CPF in December 2024.

Given Sareum’s previous 27.5% economic stake in the asset, it had limited decision-making rights, but we expect this to change with the licence acquisition. We believe Sareum will seek to out-license the asset to a strategic buyer, leveraging existing clinical data. Note that CHK1 inhibitors, being key regulators of DNA damage, find broad applicability across solid tumours, although clinical progress with first-generation inhibitors has been hindered by off-target toxicities and insufficient efficacy as a monotherapy. SRA737 has shown a favourable safety profile and preliminary efficacy with low-dose chemotherapy in early clinical trials, and therefore we see greater potential in pursuing the candidate as a combination treatment.

Source: Company documents.

Historical financials

Year end Revenue (£m) PBT (£m) EPS (p) P/E (x)
6/21 0.0 (1.7) (2.30) N/A
6/22 0.0 (2.6) (3.20) N/A
6/23 0.0 (4.0) (4.70) N/A
6/24 0.0 (4.6) (4.20) N/A

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