Companies: RNVO   

Biopharmaceutical counter Renovo has signed a licensing deal for its Juvista scar treatment drug with the £6.8 billion Shire group.

Fully listed Renovo, which lost a more than doubled £12.4 million in the year to March, has reached an exclusive agreement for the much larger Shire to develop and commercialise Juvista, its lead drug for preventing and reducing scarring that occurs in surgery. Shire will initially pay US$125 million (£62.5 million), partly with a $75 million upfront payment and partly by paying $50 million for a 6.7 per cent stake in Renovo at 200p a share.

Juvista is presently in Phase 2 development, and Phase 3 trials with the US Food & Drugs Administration (FDA) are expected to begin in the middle of next year. On acceptance of its filing with the FDA, Renovo will receive another $25 million from Shire and then up to a further $150 million if the FDA grants approval.

On top of that, if Shire successfully commercialises Juvista, Renovo stands to receive later milestone payments of up to $525 million, making the whole deal potentially worth $825 million. And, of course, after that, Renova will receive ‘escalating royalties’ on sales of Juvista.

The agreement covers the whole world, except the European Union, where Renovo is retaining its rights to Juvista. Recommended here in December as a speculation at 150p, Renovo shares are 27p up today at 214p, valuing the company at £379 million.

Hold on.

Renovo Group	LSE	£41.7m	22.00p	-0.25p
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A more palatable pill			05/10/2007
Shire deal boosts Renovo			20/06/2007
Renovo hails drug progress			14/12/2006