Cizzle Biotechnology Holdings Plc announced that it has signed a non-binding Memorandum of Understanding (MoU) for a strategic and exclusive licensing agreement to develop and offer its proprietary test for the CIZ1B biomarker which is highly associated with early-stage lung cancer, throughout the USA and Canada (North America). The new partnership is intended to incorporate the company's existing relationship with Corepath Laboratories as announced on 6 May 2022, through a dedicated, recently incorporated, Cizzle Bio Inc. (BIO). As set out below, and subject to binding documentation, the proposed royalty arrangements with CorePath will be restructured to enable the company to gain significant cash flows from new royalty payments and significant cost savings.

All planned expenditure related to clinical trials and the commercialization of diagnostic tests for theCIZ1B biomarker in the USA are expected to be funded directly by BIO. In addition, the Company will benefit from the free issue of shares in BIO. BIO is paying a non-refundable upfront fee of USD 100,000 within 30 days of signing the MoU for a 120-day exclusivity period to complete the formal legally binding agreement.

Key Highlights: The MoU envisages Cizzle providing an exclusive licence to BIO to develop and market clinical diagnostic assays based on the CIZ1B biomarker to facilitate the early detection of lung cancer in North America; Cizzle will receive an up-front payment of USD 100,000 within 30 days as a non-refundable fee to grant BIO an exclusive negotiating period of 120 days; Subject to entering binding documentation, Cizzle will receive minimum advance royalty payments of USD 2.3 million over a period of 30 months, payable as to USD 0.3 million on signing the binding agreement and a further USD 1.0 million on each of the fifteenth and thirtieth month anniversaries of signing as part of annual royalty fees of 10% of net sales; bio intends to fully fund all expenditure on development, clinical trials, accreditation and marketing of diagnostic tests for the ciz1b biomarker in North America which would represent a significant saving on current planned expenditure by the company; Cizzle will participate in the ownership of BIO through a grant of a 10% equity stake in BIO for no cash consideration; Cizzle will benefit from inventions and improvements to CIZ1B technology for sale in the rest of the world.