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Small AIM-listed specialist drug developer Sareum Holdings [LON:SAR] has received conditional approval for a UK government grant to explore the potential of one of its drugs to treat Covid, causing shares to drop nearly 20%, as the funding was lower than expected.

Before Covid, the Cambridge-based pharma developer mainly focused on small molecule treatments for cancer and autoimmune diseases and, among other projects, it has a patent pending for one of its kinase inhibitor programmes in the US.


Covid meant that the company also started looking at how another of its small molecule inhibitors could be used in severe cases of the coronavirus. The UK government has now conditionally approved a grant of £174,000 to further investigate the use of its small molecule kinase inhibitor SDC-1801 in the treatment of Covid 19.

Sareum has already submitted additional paperwork and is undergoing a standard financial review before a formal grant offer. Once the agreement is formalised Sareum plans on contributing an additional £64,000 in cash to the project, which could take six months to complete.

How to global COVID drug solutions stack up?

Globally, there are more than 150 different drugs being researched which aim to either prevent Covid-19 or treat it. They fall broadly into three different categories: they are either chemicals that can help the body develop antibodies, i.e. vaccines; antiviral, aimed at the virus’s ability to spread inside the body, or drugs that calm the immune system. The latter are particularly helpful in severe cases of Covid when the overreaction of the body’s immune system ends up ravaging the lungs, heart and brain.

“There is a pressing need for new therapies to treat this potentially life-threatening disease, and there is evidence to show that TYK2/JAK1 signalling may play an important role in the inflammatory cascade that leads to the cytokine storm observed in some patients,” said Dr. John Reader, the company’s CSO. SDC-1801 is a selective, small molecule TYK2/JAK1 kinase inhibitor.

Earlier this month the US Patent and Trademark Office issued a Notice of Allowance for a patent related to the SDC-1802 TYK2/JAK1 kinase inhibitor programme which targets cancer and cancer immunotherapy and is in preclinical development.

Sareum shares are down 0.43p at 1.80p.

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Vanya Dragomanovic

Vanya Dragomanovic

Vanya is an award-winning financial journalist who has worked in both television and newswires. She spent over 10 years at Dow Jones covering commodity markets, including metals, coffee, cocoa and oil. She also reported from the floor of the London Metals Exchange, and appeared on CNBC to discuss international metals markets. Since then she has written for several leading financial publications, including serving as commodities editor for FTSE Global Markets.

Vanya continues to cover international commodities markets globally, specialising in particular on metals and alternative energy. She is also the author of a book on CFD trading.

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