Irish-listed Ovoca Gold moves into pharma with female sexual dysfunction drug
Irish-listed Ovoca Gold has agreed a transformative acquisition that will see it move into the pharma sector.
It has agreed to take a stake in a company trying to commercialise a product designed to increase women's libido.
The company is called Ivix and Ovoca has agreed to buy as much as 59.9pc for up to $6.2m (€5.3m). The deal is conditional on Ovoca shareholder approval and an egm has been called in this regard. It will be funded from the company's existing cash resources.
"The board believes that the proposed acquisition of Ivix represents an exciting opportunity to utilise Ovoca's balance- sheet strength to accelerate the next stage of development of Ivix's product candidate, Libicore, and to potentially generate substantial future returns for our shareholders through the commercialisation of the product in what is an attractive market segment," said Ovoca CEO Kirill Golovanov.
The deal will constitute a reverse takeover under stock market rules and Ovoca Gold will now be renamed Ovoca Bio.
The Libicore product is administered as a nasal spray. Ovoca said "clinical studies completed to date have demonstrated statistically significant efficacy in treatment of major forms of female sexual dysfunction".
It has gone through phase two of clinical approval for the Russia market and the company now intends to bring it forward for phase three trials.
It said it hoped to have results of these trials by the second quarter of next year, "following which it will seek approval for the marketing of Libicore in the Russian market."
Ovoca said it has also begun discussions with the US Food and Drug Administration about looking to get the product approved in the United States.
"The enlarged group's goal is to become a leader in the development and commercialisation of novel product candidates for the treatment of female sexual dysfunctions," Ovoca said.
The transaction is structured in a way that will see Ovoca acquire just over 50pc of Ivix, with an option to increase its holding to 59.9pc.
Ovoca shares soared on the back of the announcement and were up 30pc in afternoon trading in Dublin yesterday.
The company will now look to dispose of its mining assets. It will hold on to a stake in miner Polymetal which is worth more than £9m as of yesterday's share price.
In 2014 it suspended mining work at its flagship project in Russia on foot of market volatility. Since then it has been looking for the right opportunity to deploy cash.
Mr Golovanov, who will remain as CEO after the new deal, told the company's last agm that a gap between the company's market capitalisation and asset values had emerged partly because the company held assets in Russia.
But Mr Golovanov said this was not a fair reflection as the cash was held in foreign banks and the Polymetal shares could be traded on the London Stock Exchange.