Midatech Pharma PLC (LON:MTPH) shares shot up on Thursday as it received a €2.6mln grant from the European Union (EU) to develop its MTX110 treatment for a rare form of childhood brain cancer.

The AIM-listed biotech said the funds, provided by the European Innovation Council (EIC), will be used to conduct a clinical study which it hopes will demonstrate the efficacy of MTX110 as a treatment for Diffuse Intrinsic Pontine Glioma (DIPG), an aggressive and fatal form of childhood brain cancer with a survival rate of only 7 to 9 months on average. Currently, there are no approved treatments for the disease.

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The study, known as GlioKIDS, will be the first clinical trial to use an implantable Convection Enhanced Delivery (CED) catheter system, a treatment method that Midatech says will produce concentrations of MTX110 that are more than 100,000 times more effective at treating DIPG tumours than existing methods.

The grant itself will cover 70% of the study’s costs, with the company funding the remaining 30%.

“Being selected by the EIC is a major validation of the innovation and value of our MTX110 proposition”, said Midatech chief executive Craig Cook.

“We look forward to continuing our development of MTX110 as an effective therapy with the potential to make a substantial difference for patients based on its efficacy potential, demonstrated safety, and the ability to exploit novel and alternative routes of administration that provide a ‘direct to tumour’ platform for the broader application of MTX110, for childhood and adult brain cancers”, he added.

The news sent the shares surging 14.2% to 3p in mid-afternoon.