Ovoca Gold goes the biopharmaceutical route with reverse takeover of IVIX

London-listed group Ovoca Gold has conditionally agreed to acquire up to 59.9% of Russian firm IVIX for a cash consideration of roughly $6.2m.

Ovoca's board believes the acquisition of IVIX, to be satisfied from the group's existing cash resources, presents an "attractive opportunity" for the company.

The acquisition of IVIX, which is developing a "promising drug candidate" in its novel synthetic peptide Libicore, was an opportunity that Ovoca felt had the potential to generate significant returns for shareholders and help the enlarged group in its goal to become a leader in the development and commercialisation of novel product candidates for the treatment of female sexual dysfunctions.

The transaction constitutes a reverse takeover under AIM rules and shareholder approval will be sought at the group's EGM on 27 July.

As a result of the acquisition, the nature of Ovoca's business will be transformed, leading the firm to change its name to Ovoca Bio.

Following admission, Ovoca will seek to dispose of its remaining mining assets in "an orderly fashion".

Kirill Golovanov, Ovoca's chief executive, said, "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."

As of 1115 BST, Ovoca shares had shot up 10.95% to 11.65p.