Vectus Offloads Renal Compound, Faces Shift in Strategic Focus
Vectus Biosystems has agreed to sell its VB4-P5 renal fibrosis compound to Canadian biotech XORTX Therapeutics for US$3 million in shares and warrants, gaining a strategic equity position while refocusing on its cardiovascular and fibrosis pipeline.
- Sale of VB4-P5 renal fibrosis compound to XORTX for US$3 million
- Consideration paid via shares and pre-funded warrants in XORTX
- Vectus gains direct equity stake in Nasdaq- and TSXV-listed XORTX
- Transaction subject to closing conditions and possible ASX approval
- Vectus to focus on lead cardiovascular and other fibrosis drug candidates
Strategic Asset Sale Aligns with Vectus’s Focus
Vectus Biosystems Limited (ASX – VBS) has taken a decisive step to streamline its drug development portfolio by signing a binding Term Sheet to sell its VB4-P5 renal fibrosis small molecule compound to Canadian biotech firm XORTX Therapeutics Inc. The deal, valued at US$3 million (approximately A$4.5 million), will be settled through the issuance of shares and pre-funded warrants in XORTX, effectively giving Vectus a direct equity stake in the Nasdaq- and TSXV-listed company.
This transaction fits neatly within Vectus’s broader strategy of advancing drug candidates through early validation stages until they become commercially attractive to pharmaceutical partners. By divesting the VB4-P5 asset, Vectus can concentrate resources on its lead cardiovascular candidate, VB0004, as well as emerging fibrosis programs targeting liver and lung diseases.
Details and Conditions of the Deal
The agreement transfers intellectual property rights and all data related to VB4-P5 to XORTX, which specializes in renal drug development. The consideration is structured to be paid at closing through securities issued by XORTX at a price determined by a formula outlined in the Term Sheet. While the exact closing date is subject to customary conditions and regulatory approvals, it is expected within 90 days of signing.
Vectus has also agreed to a voluntary lockup on portions of the XORTX securities for periods ranging from 45 to 180 days post-closing, underscoring a commitment to a stable transition. The deal may require shareholder approval under ASX Listing Rule 11.2, pending ASX determination, but Vectus emphasizes that this is not a disposal of its main undertaking.
Implications for Vectus and XORTX
For Vectus, the transaction means no further financial obligations toward the development of VB4-P5, allowing the company to focus on advancing its cardiovascular and other fibrosis drug candidates. Meanwhile, the equity stake in XORTX provides ongoing exposure to the renal fibrosis program’s future upside as well as XORTX’s broader pipeline, which includes treatments for gout, polycystic kidney disease, and acute organ injuries.
XORTX, with a market capitalization of approximately US$4.4 million on Nasdaq and CA$6.4 million on TSXV, gains valuable intellectual property and data to bolster its renal-focused portfolio. This acquisition complements its existing clinical programs and preclinical assets targeting metabolic and inflammatory pathways relevant to kidney diseases.
Looking Ahead
Vectus continues to actively pursue commercialisation and licensing opportunities for its remaining drug candidates, supported by external consultants. The company’s focus remains on delivering value through its cardiovascular lead and fibrosis pipeline, while maintaining a foothold in renal drug development via its stake in XORTX.
Bottom Line?
Vectus’s sale of VB4-P5 marks a strategic pivot, balancing risk reduction with ongoing exposure to renal drug innovation through equity in XORTX.
Questions in the middle?
- How will XORTX’s development of VB4-P5 progress without Vectus’s direct involvement?
- What impact will the transaction have on Vectus’s financial position and share price?
- Will ASX shareholders approve the deal, and how might this influence future asset sales?
