Manx oil and gas investor 3 Legs Resources (LON:3LEG) is raise £1.95mln and relaunch as a junior cancer drug company.
Having failed to build a successful Polish shale business and with oil prices at their lowest for a generation, the company will undergo a complete change.
A reverse takeover and recapitalisation will also bring in a new management team and a portfolio of potential immunotherapy treatments for cancer.
SalvaRX Ltd is being acquired for a price of £8.8mln, paid in new shares. The acquired business owns a 60.49% stake in a company called iOX, which is developing under licence a series of compounds for cancer immunotherapy.
iOX has a sponsorship agreement with Oxford University which sees the British institution funding (or arranging funding for) the first Phase I/II in-human trial.
Ian Walters, SalvaRx chief executive, said: "Joining AIM is a major step forward for SalvaRx and allows us to fund the iOx business through to its first in human trials sponsored by Oxford University.
“The listing will also raise our profile as we seek to build our immunotherapy business via further acquisitions and investment opportunities.”
He added: “We believe the compounds being developed by iOx could represent a major development in cancer treatment, especially when combined with existing immuno-oncology agents, with the hope of improving the care for many different types of cancer patients."
It is proposed that small cap deal maker and existing SalvaRx director Jim Mellon will replace 3Leg’s current non-executive chairman Richard Armstrong, though Armstrong will remain with the group as non-executive director.
Walters will be chief executive of the new company, and its chief scientific officer will be Robert Kramer.
There are a number of steps in the relaunch of the company.
3Legs existing share capital is to be reorganised, with a 100:1 consolidation. Subsequently, new shares will be issued at a price of 35.5p to satisfy the £8.8mln acquisition price for SalvaRx.
A £1.95mln share placing will then take place, also at a price of 35.5p.
3Legs will be renamed SalvaRx Group Plc, and as the new AIM shares are admitted to AIM the stock market symbol will be changed to SALV.