Strategic alliance in China

Cizzle Biotechnology (Cizzle), focused on cancer diagnostics, was spun out of the University of York to exploit the biomarker, variant CIZ1b, for early detection of different forms of lung cancer. There is high medical need for a simple blood test, to be used alongside a positive chest scan, that allows early detection of lung cancer. This should result in a significant reduction in the number of false positives, reduce the number of scans and improve patient outcomes. Cizzle has converted a memorandum of understanding (MoU) with partners in China into a full strategic alliance for the development and commercialisation of its lung cancer test in China.

• Strategy: Cizzle is a diagnostic company that is progressing a biomarker diagnostic assay, which aims to deliver a simple blood test for lung cancer that can pick up the disease earlier to improve the chances of survival, and to greatly reduce the need for unnecessary follow-up tests and tissue biopsies.
• MoU: In November 2021, Cizzle announced an MoU with the International Co-Innovation Centre for Advanced Medical Technology (iCCAMT) and Shenzhen Intelliphecy Life Technologies Co., Ltd. (Intelliphecy) for the development and commercialisation of its CIZ1b-based early lung cancer biomarker test in China.
• Full agreement: Cizzle has converted this MoU into a full commercial deal. The partners will be responsible for all development, manufacturing, regulatory and commercial activities in China. Cizzle will be paid for the supply of antibodies and reagents used in the test, and will receive a royalty of 10% on net sales.
• Risks: Cizzle is a small company with a single asset and limited resources. Portfolio expansion through partnerships and royalty agreements has expanded its income opportunities and reduced risk, but future success is dependent on additional partnerships and out-licensing deals being signed.
• Investment summary: Since listing, Cizzle has delivered a reasonable stream of news, particularly with collaborations and strategic partnerships that accelerate the number and magnitude of potential income streams. Despite this, the shares have underperformed, leaving the company trading on an EV of just £6.3m. Key to changing investor sentiment will be delivery of the monoclonal antibodies needed for the commercial test, which will also trigger the development in China.